If you are still scratching your head as to how a near bankrupt movie theater company (AMC) and video game store (GameStop) can still be trading at levels that are many multiples of their true value or how a handful of technology stocks can be priced as if they can perpetually grow at 20% per year or how investors could push the valuation of the stock market to within a whisker of its dotcom high, despite witnessing the subsequent collapse, MagnifyMoney may have the answer. According to a MagnifyMoney survey, 32% of investors admit to trading drunk and 59% of Gen Z investors admit to buying … [Read more...]
Foroohar: “Technology Has Made Markets Faster, but Not Better”
Has technology helped or hurt markets? That's the question Rana Foroohar examines in The Financial Times. She writes: First, consider the asymmetry of power. We have no idea of the true value of the personal data that is sold by platform giants like Facebook or YouTube to advertisers as the hidden charge for the supposedly “free” services we enjoy online. In the same way, the users of Robinhood have no idea that the reason that they and their fellow retail bros can trade “free” online is that their order flows are being shared with bigger, richer fish. They are, meanwhile, being induced to … [Read more...]
Is the Market Repeating 2000?
James Mackintosh makes the case in the Wall Street Journal that today's market looks awfully similar to that of 1999-2000. He writes: Is the dot-com bust happening again right under our noses? It might seem an odd claim, but there is a remarkable resemblance between the speculative boom-to-bust of late 1999 and the first half of 2000 and what’s happened over the past nine months in the fashionable areas of clean energy, electric cars, cannabis stocks and SPACs. If the parallel continues it bodes ill for investors who joined the excess late. The trendy stocks—led by Tesla—are already down a … [Read more...]
Can Robinhood and SoFi Bring IPOs to the Masses?
For most of history, initial public offerings have been a walled garden for many investors, who were unable to gain access to their benefits. That may start to change if Robinhood and SoFi Technologies get their way. Telis Demos reports for The Wall Street Journal: Small investors seem more influential than ever these days. So as the initial public offering market heats up, efforts to get those investors a bigger seat at the table is a hot idea. It’s also not a new one. Upstart brokerages Robinhood Markets and SoFi Technologies recently said they would give their customers access to IPOs. … [Read more...]
125 Years of the Dow Jones Industrial Average
The Dow Jones Industrial Average has reached 125 years old. The index was created in 1896, and has evolved through Great Depressions, recessions, and booms to take on its current form. Karen Langley and Peter Santilli report in The Wall Street Journal: One hundred twenty-five years ago, the Dow Jones Industrial Average made its debut. The index of 12 smokestack companies closed that first trading day, May 26, 1896, at 40.94. It included General Electric Co. as well as long-forgotten names like American Cotton Oil and Distilling & Cattle Feeding. Since then, the Dow has evolved with … [Read more...]
Legendary Silicon Valley Investor: ‘SPAC Fad Indicative of Later Stages of Cycle’
Gary Silverman interviews legendary Silicon Valley investor Sand Roberston for the FT. Silverman writes of the interview: Sandy Robertson is worried about what’s happening in the markets these days, and that matters. Few people in the financial world have seen more than he has. Robertson is best known as a pioneering dealmaker in Silicon Valley, where he helped start two of the “Four Horsemen” investment banks that dominated technology underwriting in the 1990s — Robertson Stephens and Montgomery Securities. But his career dates to the 1960s, when as a Smith Barney broker covering Nebraska … [Read more...]
Stocks: S&P 500 Hit 25 Records this Year
You may have noticed the food and beverage industry needs workers. Like, right now. You can expand that out to most businesses in the service industry. Your Survival Guy will place the blame on big government unemployment checks and on the lockdowns freaking people out. Case in point, we escaped to the city this weekend to meet friends, and when the sun went down, it turned into a ghost town. No taxis, no Uber, which is basically operating with on-and-off strikes. Why? Because the governor isn’t allowing them to charge higher prices when demand surges. According to him, the city’s still in a … [Read more...]
Analyst: Current S&P Valuations Point to Zero Return for 10 Years
Karen Ward, a chief market strategist for JPMorgan Asset Management has taken to the Financial Times to warn investors that current S&P 500 valuations suggest returns of zero-percent for the next ten years. She writes: How worried should we be about stock market valuations? In my day-to-day conversations with clients, it seems that investors are unsure. On the one hand, they can see the US economy is bouncing back quickly, vaccines are being rolled out more rapidly in continental Europe and both governments and central banks are in no rush to rein in stimulus. For the global economy, … [Read more...]
AT&T Prides Itself on Stability of Growth
Recently AT&T released its first-quarter earnings report in which it notched more cellphone users, more fiber-optic customers, and more HBO subscribers. The company lauded its "stability" compacted to competitors. Drew FitzGerald reports for The Wall Street Journal: The Dallas company reported 44.2 million domestic HBO and HBO Max subscribers, up from 41.5 million three months earlier, as its media division sought to gain on rivals like Netflix Inc. NFLX -1.10% and Walt Disney Co. That figure included viewers who signed up for the company’s new online streaming video service as well as … [Read more...]
Where Are We With This Stock Market? Well…
When legendary Dow Theorist Richard Russell was still alive, he wrote about the three phases of a bull stock market. He’d write to his valued readers that you know you’re in the third phase when everyone’s talking about stocks (or dogecoin, or bitcoin, etc.). The third phase of a bull market is full of FOMOs—buyers with a “fear of missing out” on the next best thing, like lemmings jumping off a cliff. The third phase is crazy, fueled by emotion, with a narrative that goes something like this: It’s different this time. Well, yes, every day is different. And there are plenty of stories telling … [Read more...]
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