Archive for April, 2010

The overwhelming growth of information has not been matched by our ability to assimilate it. So, how do we allocate our limited reading time? Here are three tips to optimize the value gained from reading. »

It happens. Reporters, because they cannot be financial experts in all fields, take a press release and misinterpret the data. However, the problem this time is serious because: House prices are an important, sensitive indicator to investors The data misuse gives an exact opposite conclusion to what is actually happening There is no excuse... »

Congress’ derivative legislation work is stumbling about as the “big banks” press to avoid constraints on their money machine. $20 billion annual revenues is certainly worth fighting for, but it raises an important question: What are they doing with derivatives that is worth $20 billion? »

The economy is humming? It certainly looks like it. And that activity is spreading elsewhere. Here are five recent articles with selected quotes that underline what is happening and show that the US stock market hasn’t run ahead of the fundamentals. »

Last Friday, I commented about the turn up in homebuilders’ land purchases amid home price stability and improvement (“Homebuilders Buying Land Again – House Price Patterns Support the New Activity”).  The current government stimulus program is scheduled to end on April 30. Will the indicators turn down again, or will we see a good... »

In The Wall Street Journal, there was a surprise article describing homebuilders beginning to compete for property: “Land Prices Jump as Home Builders Move In” (By Dawn Wotapka, April 21, page A-5). We have been seeing improvements in many areas of the housing markets (I have covered these indicators in Housing and Homebuilding articles). ... »

Many investors question whether forecast earnings are a worthwhile measure of stock market valuation. Doubts surrounding anticipated earnings include ignored economic problems and Wall Street analyst optimism. McKinsey & Company has just provided another approach to getting a measure of where the economy and corporations are headed – a survey of ‘insider’ information. »

Last month, I wrote, “Closed-End Funds – Structure and Price Discount Add to Potential Returns” (March 12), in which I described the benefit of the closed-end structure for portfolio managers and investors. Today, I want to explain why funds selling at a discount represent more than an opportunity to make an added gain if... »

Following the SEC fraud charge, Goldman Sachs (GS) put out a rebuttal press release. Here is an  item that raises questions instead of providing answers . »

Goldman Sachs (GS) is attempting to overcome the SEC’s fraud charge, claiming it acted legally. Well, it may have. But what about ethically? That is the measure that most people apply when deciding whether someone has acted correctly – especially with regards to money. So, Goldman may prevail in court, yet lose its clients’... »

The bears’ endeavors to predict the end of this rising market keep getting squelched. They want to believe there is some wrong-headed reason for stocks going up. Unfortunately, for them, the cause of this stock market’s gains is improving fundamentals: The economy (economists now are changing their tune and upping growth forecasts) and corporate... »

Be wary of Wall Street’s new products. They could be geared more to the emotions in your head than the opportunities in the markets. Wall Street is great at producing new products that many investors want. However, there are potential problems with buying whatever Wall Street is selling. »

Riding through a small town last weekend, I spotted a ramshackle trailer with a sign reading, “Income Tax Services.” Seems as though everyone wants to be a financial expert. And nowhere is this growth as visible as in today’s investment advisory business. This is the age-old approach of having an investment expert provide guidance... »

To play and win at the Wall Street game requires strong defensive moves. Wall Street firms are adept at selling (both advice and products), and we must avoid being drawn into inappropriate investments. »

Here comes the flood – of books roasting Wall Street, that is. Roger Lowenstein’s new book title, The End of Wall Street, is tame compared to those being released later this year. Wall Street – Those words can conjure up negative visions for many investors. They feel Wall Street’s guiding principle is anything goes,... »