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Avoid Mixing Political Opinions and Investing Decisions
I am seeing more investors incorrectly use political opinions to substantiate their investing actions. Political beliefs are often emotionally charged, thereby skewing reasoning. The result: Poor investment decision-making. »
2 Must-read Articles Examine Stock Market’s Flaws – Picture Is Not Good
The flaws in the US stock market that caused the May 6 “flash crash” remain. These two articles bring troubling news. »
Wall Street Hits Air Pocket – Two Must-See Videos (Part 2)
No news is bad news. The lack of a clear, informed, logical report on Thursday’s air pocket shows that trading ran amok. Like those science fiction films where the machines take over, the stock exchanges became simply arenas in which the automatons could wreak havoc. This is not to say that we should sell... »
Wall Street Hits Air Pocket – How Should Investors React? (Part 1)
Wall Street’s 1000-point air pocket produced widely divergent emotions: shock, confusion, anger, fright – and even humor. As investors, how should we react? »
Want To Buy A Sector Fund? Ignore the Label; Examine the Contents
After reading yesterday’s write-up (Homebuilder Stock Articles Raise Questions – And Exclamations), you understood why a 9% year-to-date return for homebuilder stocks was more appropriate than 21%. Still, 9% in less than two months is pretty good. So, you checked the performance of your homebuilder fund and… WHOA! What happened? The performance is so... »
Wireless Wars Coming? – Beyond Red and Blue Maps
This week, AT&T (Thursday) and Verizon (Tuesday) report their fourth quarter earnings. Even without following the stocks, we know by the plentiful G3 advertisements that the companies are engaged in a wireless battle. We expect these two biggies to be the US industry leaders, forging ahead as wireless technology continues to advance. »
Ratios – Hedge Funds’ Meat and Poison
To close out this week’s focus on ratios, let’s look at hedge funds, the most sophisticated users. Their offsetting, push-me/pull-me risk strategies often win in normal times. However, occasionally the unexpected happens… »
Beyond P/Es – Avoid Over-reliance on Ratios
Ratios provide important information everywhere in our lives, helping us to understand and compare. However, they carry dangers of building false expectations and giving incorrect investment guidance. Here’s where the problem lies: »
The Defect in Price/Earnings Ratios – Part 2
Yesterday we saw the challenge in using price/earnings ratios (P/Es) to analyze individual stocks. Today, we turn to the added difficulties in combining multiple company P/Es into a usable average P/E for portfolios and indexes… »
The Defect in Price/Earnings Ratios – Part 1
The price/earnings ratio (P/E) is a popular stock valuation measure. However, it has a flaw, which I explain below. Tomorrow, in Part 2, we will examine how the flaw affects portfolio and stock market analysis. »
Missing the Trees for the Forest – Look at Individual Stocks
I just read that stocks are overvalued. The proof? The forward price/earnings ratio (P/E) for the Standard & Poor’s 500 Stock Index (S&P 500), now about 17 times, is at the high end of its historical range. At this point in the economic and financial cycle,... »
John Tobey on Seeking Alpha
