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Homebuilders’ Bonus: Weak Competition From ‘Newer’ Homes

Thursday, May 22, 2014
Homebuilders’ Bonus: Weak Competition From ‘Newer’ Homes

New home sales get reported tomorrow (Friday, 5/23), but the monthly, seasonally adjusted number is not the key determinant of the homebuilding outlook. Yes, we will see how things are going now, but more importantly are the underlying drivers that put new homes in a favorable competitive position.

Especially important is the shrunken supply of “newer” homes. This competitive picture places homebuilders in the driver’s seat.

This article is published on Forbes.com


Stock Market Stability – The Calm Before… Sunny Days

Monday, May 19, 2014
By John S. Tobey
Stock Market Stability – The Calm Before… Sunny Days

The “it’s quiet – too quiet” crowd warns that the market’s calmness is a setup for unwary investors. We’re told that, with too-high values (they’re not) and biotech/tech bubbles bursting (they’re neither bubbles nor bursting), it’s only a matter of time before the stock market cracks. The fundamental outlook that supports this view? Non-existent. Rather, it’s just worrying that when stocks go up, they necessarily must go down. History disproves this notion, and today is no exception.

This article is published on Forbes.com


 

Fed Refuses To Remove Its 100% Tax On Savers

Friday, May 9, 2014
By John S. Tobey
Fed Refuses To Remove Its 100% Tax On Savers

The 5-year Fed wealth redistribution gambit has made savers poorer. It’s time to rectify this abnormal and unfair scheme.

Under new management, the Federal Reserve nevertheless continues its non-reality show.  Only now they’re inventing reasons not to let savers have their due. Fed head Yellen just cited the old, now non-existent, “problems” of low inflation, housing doldrums and too-high unemployment.

How the Fed’s medicine is adversely affecting the U.S. financial system…

This article is published on Forbes.com


Apple Has Dazzling Sideshow, But Main Event Is Boring

Saturday, April 26, 2014
By John S. Tobey
Apple Has Dazzling Sideshow, But Main Event Is Boring

Imagine. Steve Jobs comes onstage, firing up his iPad to project beautiful tables and charts of money. From the stage sofa, he announces Apple’s stock split (“Now the little investor can buy 70 shares instead of only ten”). He then tells about the big dividend money being distributed to shareholders (“We trust you to put it to better use than we can”). Next, he explains the large increase in share buybacks (“We have it in our control to grow our earnings-per-share through share attrition.”) Then, with pride, he announces that this largesse can be done without recalling taxable overseas cash deposits by simply borrowing the money.

Here are the problems with depending on a financial strategy to produce growth…

This article is published on Forbes.com

Exploit This Goldilocks U.S. Stock Market

Tuesday, April 22, 2014
By John S. Tobey
Exploit This Goldilocks U.S. Stock Market

According to what we read and hear, the economy, housing and the stock market are either overheated or tepid. Even the Fed vacillates between hot inflation and cold deflation worries. The reality? That glow that we see everywhere is Goldilocks’ “just right” warmth, evidence of neither a burgeoning bonfire nor a sputtering flameout.

This article is published on Forbes.com


Homebuilders – Stocks Priced For Disappointment, So Time To Own

Monday, April 21, 2014
By John S. Tobey
Homebuilders – Stocks Priced For Disappointment, So Time To Own

With investors typically looking six months ahead, we should be seeing a good spark of interest in homebuilders stocks. But, instead, there is a collective holding of breaths. There are three key drivers for this hesitation. More importantly, the wait-and-see attitude is setting up the possibility of a “who knew?” run-up in homebuilder stocks. Now is a good time to own a full position of homebuilder stocks.

This article is published on Forbes.com


Ignore Momentum Advice — Buy Real Growth Stocks

Wednesday, April 9, 2014
By John S. Tobey
Ignore Momentum Advice — Buy Real Growth Stocks

“They” are at it again, trying to trip up our investment plans. A deluge of articles warns that “momentum” investing (i.e., investors chasing performance) created a bubble-like environment that is now popping. The conclusion? Run from growth, and focus on dividends and safety.

That great advice for April 2000 and April 2009 is terrible for April 2014. The rehabilitation and rebuilding of the broken U.S. economy and financial system is done. Likewise, stock market participation and valuations are back to normal. In this environment, “value” (i.e., low P/E or high dividend yield) stocks offer neither superior return potential nor better risk protection.

This article is published on Forbes.com


Biotech Stocks Look Ready To Rebound

Tuesday, April 8, 2014
By John S. Tobey
Biotech Stocks Look Ready To Rebound

Looking at this week’s (4/7 and 4/8) action, biotech stocks are showing signs of support. Technical patterns, investor behavior and takeover interest are indicating that current prices offer a buying opportunity. Here is what has changed.

This article is published on Forbes.com


4 Reasons Not To Buy Biotechs Yet

Sunday, April 6, 2014
By John S. Tobey
4 Reasons Not To Buy Biotechs Yet

Biotech stocks dropped again, but four reasons indicate that waiting remains the best strategy. Attitudes of investors appear not to have turned negative yet and, therefore, biotech stocks are susceptible to more selling.

The biotech sell-off, while possibly presenting trading opportunities, looks problematic for long-term investors. While an imminent collapse doesn’t look likely, biotech’s extended rise looks over for now. This trend change is being called a loss of momentum to imply the uptrend basis was more speculative than investment oriented. Perhaps. However, many fundamental improvements have occurred, so, while traders and trend followers undoubtedly jumped aboard, fundamentals were a primary catalyst for much of the rise.

So, why shouldn’t we be excited to take advantage of the current drop?  There are four reasons for waiting…

This article is published on Forbes.com


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