Archive for May, 2010

Given Wall Street’s disruptive game playing described in Parts 1 and 2, what’s an investor to do? Today, I address “III. How we can invest and protect ourselves.” »

This write-up continues yesterday’s discussion of an investment approach that seeks to frighten investors into selling at abnormally low prices. Under “II. Why is it allowed to exist,” we covered the removal of short-selling controls (uptick and “naked”) and weak enforcement of false rumors. Today, we will review two other important, negative forces in... »

Yesterday, I described two professional investment management approaches. When opportunities arise in emotional times, buy Sell short (and incite); then buy The first is not only sound investing, it provides the means for generating liquidity in tough times, a key element to the long-term health of our public ownership system. The second is the... »

Yesterday I discussed how to use currency exchange rates for understanding global economic and financial conditions. Today, let’s look at how the rates can provide a window into emotional investment moves, particularly panic selling, and how we can use the information to our advantage. »

Last year, when rising cocoa prices were hot news, I described the problem with using only US dollar values to make an evaluation of a global product (see “Cocoa Prices and Currency Measurement” – October 23, 2009). Today, with Europe, the Euro and “contagion” in the news, it’s time to revisit the need to... »

In Thursday morning’s write-up, I said I would next discuss stock valuations. However, with Thursday’s sizable market drop, I decided to spend the time analyzing portfolios and holdings. As a result, I did a bit of client buying on Friday. So, instead of valuations, I thought this article should be about dealing with periods... »

Over the past year, corporate earnings for larger companies have benefited primarily from three factors: Strategic company moves to cut costs and increase productivity An economic turnaround from negative to positive conditions Financial improvements, including shored up markets, support for troubled companies (especially financials) and access to low-cost funds for untroubled firms These items... »

In late March, just before the first quarter earnings reports came in, there was worry that companies and analysts had become overly optimistic. The symptom cited was less trimming of estimated earnings before the actual reports. »

Risk one-upmanship is upon us. The possible dire consequences from the European Union’s (EU’s) Greek troubles now have moved from widespread contagion, itself a stretch, to forecasts of the EU’s dissolution and the Euro’s abandonment. Goldman Sachs calls this outlook, “ridiculous,” saying the Euro’s decline actually may be at or near the bottom (“O’Neill... »

Investment adviser write-ups can give us valuable insights, particularly in times like these. Remembering that honesty and humility are key characteristics of top advisers, we can use their newsletters, articles and blogs to judge those qualities. »

Ever been in a situation where one misbehaving peer (at home, in school or at work) ends up causing pain for everyone else? Rather than sending the naughty person to the corner, the principal or the HR department, the parent/teacher/boss uses the behavior as an excuse to add new rules that apply to everyone.... »

Last Thursday’s 1,000-point air pocket provided an excellent testing environment for various trading strategies. Here are the ones to avoid and the ones to use. »

Wall Street and the SEC have identified two culprits: High-speed, computerized trading – done by someone, somewhere. They’re not sure who or when or why, but they know it was the main cause New York Stock Exchange (NYSE) – “What? But weren’t they the only ones trying to bring order to the markets?” The... »

Actually, the title should read, “Two 1967 Trading Lessons Confirmed.” Thursday’s stock market gyrations reminded me of those still-valuable lessons learned 43 years ago as a result of one trade… »

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... »