March 10, 2009
Over the past several weeks, there has been a growing chorus of negativity coming from all directions. It always concerns me when I hear everyone singing the same tune. For instance, recently investing in gold was said to be the only way to protect your portfolio from this economic calamity. Hard assets were on everyone’s minds and pundits were suggesting to buy until it hurt. Well, that was a $80 an ounce or so ago and now gold seems to have lost its shine.
So, how can you tell when we are seeing a market top or bottom? That is next to impossible, but one way is to separate emotions from rationale and consider objectively how many are calling for a top or a bottom. If you recall, the ideas of a bottom have been all but squashed in favor of a DOW 5000 or an S&P 500 at 500. But just this weekend, it was clear that the level of bearishness hit a high chord. Here is why…
February 24, 2009
Perhaps it is nothing more than wild speculation at this point, but rumors are popping up on the street that Warren Buffett may have received margin calls related to derivative/option investments. Yes, these are the same type of investment that Mr. Buffett has termed, “financial weapons of mass destruction.” As crazy as this may sound, there is obviously something going badly wrong as Berkshire Hathaway (BRK.A) is down over 20% in 2009 and many of the individual positions within the portfolio have been outright devastated.
To add insult to injury, Mr. Buffett has recently made many ill-timed investments that are wreaking havoc within his portfolio, which is down a whopping 45% over the past 12 months. If you recall, back in May 2008, Mr. Buffett was convinced that the credit crisis was coming to an end when he proclaimed to the world on Bloomberg Television, “`The worst of the crisis in Wall Street is over.” Unfortunately, he put his money where his mouth was and decided to add positions to the portfolio and several have dropped more than 50% since. That is not the only problem though.
Read the full article HERE
January 22, 2009
The earnings stampede continues. Last night, Apple’s (AAPL) news of higher than expected numbers seemed to be a temporary relief to what was gearing up to be an ugly season. Early on in today’s session, Google (GOOG) was riding on the coat tails of the initial market move higher from the overnight excitement surrounding the Apple announcement. Even with the massive downturn we are seeing today (which has erased most of yesterday’s gains), there remains a hopeful outlook for the Tech sector. With Google reporting after the close today, we will get further insight into the potential for this sector’s strength. Read more
January 20, 2009
Layoffs are affecting millions. Stores are closing, municipalities are cutting hours of the paid work week and all around there are signs of concern about the economy. Yet, even with all of that, there are stock and even sectors that will do well. Take the education stocks as a good example. Since there are too many people chasing too few jobs, many have decided to go back to school to enhance their abilities.
Embedded in China’s economic stimulus package was funds dedicated to educating the population. That is good news for companies like New Oriental Education (EDU) which is expected to report a profit of $0.06 cents per share for this quarter’s earnings. Although market conditions have been extremely tough, we are seeing a great opportunity for owning post-secondary and continuing education companies. Here is why… Read more
January 16, 2009
Citigroup’s (C) earnings have been downright awful over the past year and today’s release will be prove to be no exception. Estimates for this quarter are expected to show a -$1.19 per share loss. If the earnings from Marshall & Ilsley’s (MI) report is any indication of the banking sector’s problems for this quarter, then Citigroup’s investors are in for a big disappointment.
Marshall & Ilsley reported a loss -$1.55 vs. on expectations Read more