Yesterday I posted some of the questions and answers from the Barron’s annual ‘Test Your Wall Street Skills’ quiz. Here’s a link to my article from yesterday and here is the link to the article in Barron’s (a subscription may be required). Most of the ‘big’ questions have already been answered, but there are still some fun ones: 1. Which ‘FANG’ stocks will fare worst in 2016 – Facebook, Amazon,… Read More
Over the weekend, Barron’s put out their annual quiz for readers to predict market related events in the coming year (you can find the quiz here, but a subscription may be required). I thought it would be fun to share some of my answers – but keep in mind the quote from Warren Buffet, who said that ‘the only value of stock forecasters is to make fortune-tellers look good.’ I… Read More
One of my favorite long-timer readers asked me today to follow up on the chart from yesterday to include the performance of energy stocks (click here to see yesterday’s chart). The best quality sector data from S&P only dates back to 1989, so this data set isn’t quite as long as what I showed yesterday, but the story is basically the same and I have to admit that I was surprised… Read More
Although oil ultimately finished higher yesterday, West Texas Intermediate (WTI) crude touched on a 2004 low during the day. I know I am repeating myself, but I continue to be surprised by how far oil has dropped in the last 18 months. As you know, I think a chart is worth 1,000 words, so I’ve plotted the spot price for WTI as far back as my Bloomberg data would take… Read More
Well, today’s the day that we will in all likelihood get news that after seven years, interest rates will come off of the floor. The Zero Interest Rate Policy (ZIRP) that the Fed has engaged in will finally be over. Although I have the feeling that what the Fed will do next will still dominate the conversation (when will they raise again, by how much, etc.), it will be nice… Read More
Last September, I wrote that we avoid junk bonds because they are too sensitive to stocks, which means that a portfolio of stocks and junk bonds isn’t as diversified as a portfolio that has stocks and investment grade bonds (click here to see the original article). Over the last year, the S&P 500 has earned just 1.68 percent and suffered a 10 percent correction in the autumn. Junk bonds, as… Read More
Last Thursday, Mario Draghi, the President of the European Central Bank (ECB) disappointed markets by not increasing their current bond buying program. It was a shock to markets, although you wouldn’t really know it from looking at the stock market. The S&P 500 lost -1.44 percent, and while that’s a fair amount, it definitely falls in the normal category and not in the shocking category. The real action was in the… Read More
Back in 2012, Draghi famously said that the ECB was ready to do ‘whatever it takes’ to preserve the euro. Although he was talking about keeping peripheral countries within the euro during their sovereign debt crisis, the ECB has developed a reputation over the past few years for exceeding investor expectations with their economic stimulus programs. That ended yesterday when the ECB failed to deliver the stimulus that markets were… Read More
One of the interesting stories yesterday was that Yahoo might sell its core business, which got me wondering: what is Yahoo’s core business? Interestingly, the market is puts a negative value on Yahoo’s core business, whatever it is. Let’s take a look at some of their assets: a 15 percent stake in Alibaba worth $32 billion, a 35 percent stake in the separate publicly traded Yahoo Japan that is worth… Read More
