What is popular on Wall Street? The table below lists the most followed stocks in the S&P 500. These aren't necessarily the stocks with the highest analyst ratings, they are the stocks with the most analyst coverage. According to Bloomberg, there are 61 analysts following Apple, 57 following Google, and 55 following Facebook. What possible value does the 35th analyst following Apple add, let alone the 61st, that the 34th analyst has missed? Seems like an awful waste of time and effort. Looks more like a who’s-who of speculation than a list of stocks that a long-term investor would … [Read more...]
A Furious Rally
The S&P 500 has rallied furiously from its October 15th low. Over the last 24 trading days, the index has gained 10.1%--the largest such gain in over three years. Are stocks overbought at these levels? You can be the judge of that. … [Read more...]
Where do Stocks go from Here?
As measured by the Dow Jones Industrial Average, the current bull market is over 2,000 days old—2,074 to be exact. That is the fourth longest bull market in the last century. How have stocks fared once they have reached the age of 2,074? In terms of duration, every bull market that has lasted for 2,074 days, went on to last at least another two years. And the subsequent gains for the three bull markets that lasted longer than 2,074 days were all substantial. That’s the good news. The bad news is that the performance of stocks from day 2,074 of a bull market to the subsequent stock market … [Read more...]
Stocks Down 400 Points
"I was at the post office today and overheard someone comment that the stock market was way down, something like 400 points," wrote a client to me last week. "I just wanted to let you know we'll be heading south for the winter and I need you to change my address. Glad to know you're handling my money and not me!" It's interesting how some investors live and die by the daily swings in the market. They either have too much riding on it, or enjoy watching it fall because they got out six years ago at the bottom and can't believe how they've missed the boat. Both feelings are rotten and not … [Read more...]
Luxury Goods Indicator Ringing the Alarm Bells
Young Research’s Luxury Goods Index is a modified market-cap weighted index of some of the world’s most prestigious luxury brands. You would recognize many of the names in the index. The components include Tiffany’s, Louis Vuitton, Hermes, Bulgari, and Southeby’s among others. No single stock accounts for more than 20% of the index. Our luxury goods index provides a real-time snapshot of the health of the high-end consumer. Why should you care about the health of the high-end consumer? The high-end consumer has become vital to both U.S. and global economic growth. In 2012, the top 5% of … [Read more...]
Can U.S. Stocks Decouple?
U.S. stocks are still up YTD, but the iShares MSCI All Country World Index excluding the U.S. is now down over 4% in 2014. Can U.S. stocks continue to diverge from foreign markets? With about half of the revenue of S&P 500 companies coming from foreign economies that may be a tall order. Better buckle up. … [Read more...]
Market Internals Point toward a Correction
Markets internals aren't sending a signal of optimism. My first chart below on the NYSE advance-decline line looks like it is rolling over. The advance-decline line is a measure of market breadth. A healthy uptrend in the stock market should bring along all of the troops. When the advance-decline line begins to diverge from the broader market it is a sign of a narrowing market with fewer and fewer stocks propping up the broader indices. The second chart below shows the 5-day moving average of NYSE new lows and new highs. The number of new lows is soaring while the number of new highs is … [Read more...]
Most Hated S&P 500 Stocks
The late great Sir John Templeton, who was a pioneer in global investing and the manager of the Templeton Growth fund from 1954 to 1992 once said "It is impossible to produce a superior performance unless you do something different from the majority.” Templeton was a contrarian. His contrarian investment strategy led to one of the most impressive performance records in mutual fund history. A $10,000 investment in the Templeton Growth Fund in 1954 would have turned into $3 million at Templeton’s retirement in 1992. How can you best invest like a contrarian? Here is a good place to … [Read more...]
Will the Markets Notice Russia’s Invasion of Ukraine?
Back in 2008, well before U.S. markets began spiraling out of control, Russian stocks tumbled in free fall. This was not an earlier realization of the financial crisis, it was a reaction to Russia’s invasion of its southern neighbor Georgia. You may not remember that invasion because the Olympics were on at the time and of course, it was summer. But from the time the Russians moved into Georgian territory to the time the final signature was placed on the peace treaty (this time span shaded in grey on the chart below), the RTS fell 16%. Meanwhile, U.S. markets dropped 6.7%. Mind you this all … [Read more...]
Missing Out on Stocks
The following poll tells me that the average investor is fed-up with this stock market. … [Read more...]
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