Here's one take on the world's top brands. It's worth noting how many either don't pay a dividend or are not worthy of your investment. … [Read more...]
Fed Warns of Dangerous Markets
In a study that could only be sanctioned by the independent (read unaccountable) Federal Reserve, the astute researchers at the Fed Bank of Chicago have come to the profound conclusion that faster and less transparent markets (aka high-frequency trading) pose dangers that aren’t properly appreciated. The investing public recognized the dubious role of high frequency trading about 2 hours after the 2010 flash crash. Leave it to the Fed to slam the barn door long after the horse has bolted. Bloomberg reports: Faster and less transparent markets pose risks that require more study, according … [Read more...]
How to Trump the Average Trader
After a mini-correction to begin the year, the stock market has staged an impressive rally. The Dow has risen 5.6% in only two weeks and it is now within a couple of percentage points of moving into the green for the year. The much more speculative NASDAQ index has already achieved that feat. The NASDAQ index is up 1.6% so far in 2014 after rising 38% last year. Compare that to the 26% gain in the blue-chip Dow for 2013. The NASDAQ outperformed in 2013 and it is doings so again YTD. What does the continued outperformance of the NASDAQ say about the stock market? This is a speculators … [Read more...]
Starting Over
You can bet investors will be phoning their brokers in a week or two when they get their January statements. The phone never rings when the market’s up. And it never ceases to amaze me how quickly investors forget—2008 wasn’t that long ago. It’s never a good idea to expect the markets to do something for you. Go back to 1965 and the top Billboard single was “Wooly Bully” by Sam the Sham and the Pharoahs. The Dow Jones Industrial Average was trading at 969. Woolly Bully Fast forward sixteen years, a good chunk of a retirement for many, to 1981 and “Bette Davis Eyes” by Kim Carnes … [Read more...]
Yesterday’s Winners: Best Buy Edition
We all know the adage, “yesterday’s winner is today’s loser,” or some variation thereof. That’s why it’s no surprise to see Best Buy tanking on the back of a sales report that showed its holiday revenue results coming up short. Investors punished Best Buy shares after the report was released, driving them down over 28.5% at last look. This is probably hard to believe for some because Best Buy was one of the S&P 500’s top performing components in 2013. But those who think back just a little further will remember that Best Buy seemed on the verge of bankruptcy in 2012. The moral of … [Read more...]
Who Will Buy Your Stocks?
Zero Hedge highlighted a striking statistic on its website last Wednesday. A chart with data from Investors Intelligence showed that survey reporting bullish sentiment over 60%, and bearish sentiment in the tank. There are four times as many bulls as bears—a high that goes back almost three decades and covers two of the largest asset bubbles in history. Investors are more euphoric than they were at the height of the dotcom and real estate bubbles. With so many bulls already all-in on the stock market, who are the buyers that are going to drive prices up from today’s already lofty levels? … [Read more...]
Calling the Crash of ‘29
If you look at a enough charts it’s not hard to draw historical comparisons to fit your frame of mind. After reading an article comparing this market to 1928-29 I was reminded of Roger Babson, founder of my alma mater Babson College who correctly called the crash of ’29. His “ten commandments” ring true even today. Babson authored more than forty books on economic and social problems, the most widely read being Business Barometers (eight editions) and Business Barometers for Profits, Security, Income (ten editions). Babson also wrote hundreds of magazine articles and newspaper columns. He was … [Read more...]
The Truth about Warren Buffett’s Investment in Exxon Mobil
Most stories on Buffett’s purchase of Exxon Mobil shares are missing the most important point. If you don’t already know, Buffett’s Berkshire Hathaway recently made public its $3.7 billion stake in Exxon Mobil Corp. The revelation pushed Exxon’s price up, but perhaps markets shouldn’t care so much about what Warren Buffett is buying these days. You see, Buffett’s investment in Exxon, like his recent investment in IBM, is more a sign of his lack of options than a vote of confidence in these big blue chips. That’s the paradox of investment success, once you’ve been successful for as long … [Read more...]
How Profitable is Twitter? Infographic
Utilities Investing: A Compelling Long-Term Opportunity
In our view, investing in utilities offers a compelling opportunity to long-term investors. Utilities are regulated monopolies that sell some of modern life’s most basic necessities—electricity and water. Utilities’ monopoly status gives them the opportunity to earn guaranteed returns that are set by local regulators. As a result, utilities are one of the most stable and enduring businesses in America. And they offer some of the market’s highest dividend yields to boot. Interesting Facts For Utilities Investing In 2011 there were 144.5 million electrical customers in the United States. — … [Read more...]
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