I’ve had a few conversations recently with people about the stock market and its ability to continue this climb higher. A lot of people look at the economy and ask questions like “How is the stock market making all-time highs with unemployment as high as it is?” It can be pretty confusing at times and…
Q1 Update
Now that the first quarter of 2013 has come to a close, let’s take a look at capital flows. The first chart below shows stocks (S&P 500) against bonds (10 year Treasury). Typically, money moves back and forth between stocks and bonds as investors are either comfortable with taking risk or feel risk adverse. Since…
Mr. Bernanke & The Fed
Let’s take a look at the stock market since the Fed ended Operation Twist at the end of 2012 (where they were alternating short-dated bond sales and long-dated bond purchases every few days), and transitioned solely to purchases of bonds (in the amount of $85 billion per month). S&P 500 ETF (SPY ) – 9…
Stock Valuations & Perception
I would classify my approach to investing (and managing other’s investments) as a value investor. I’m always looking to cycle out of overvalued investments and into undervalued ones, in terms of my expectations of the economy and markets moving forward. If I can’t find decent value, contrary to most professionals in the financial industry, I…
Market Update & Healthcare
There’s a lot of momentum behind stocks right now. Companies continue to beat on earnings but it’s all from operating leverage and this can’t last forever. New sectors, like Transportation, Materials, and Energy, have kicked in and taken the lead. This should carry us higher for a few weeks in the form of a slow…
Apple
Apple is off 10% this morning after disappointing quarterly earnings and revenue guidance (so the “experts” say). Personally, I didn’t think the quarter was that bad. It appears that the fundamentals have been thrown out the window at this point and the stock is getting hammered until all weak-handed investors cough up their shares. Here…
Time to go shopping
A lot of good growth companies are getting hit right now off quarterly earnings “misses,” including Apple, Starbucks and Dunkin’ Donuts, just to name a few that I’m sure you’re familiar with. I’ve been putting cash to use in quite a few names as they come down for long-term investments. When Cheerios are on sale,…
Stocks vs. Bonds – who will be right?
An interesting divergence has been building between stocks and Treasury bonds lately. Typically, stocks and Treasury bond yields move together as money moves back and forth between stocks and “safe” bonds. Lately however, they have not. Money is actually going into both stocks AND bonds, and unfortunately the bond market is usually correct, indicating stocks…