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
The rout last week reminds me of the market tremors in August and September that caused the Federal Reserve to blink. Markets thought that the Federal Reserve would raise interest rates in the September meeting and were surprised when the Fed cited market turbulence when they kept the rates unchanged. In September, markets were worried about global growth and the sharp selloff in Chinese stocks, which had fallen 40 percent in a… 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
It’s been almost five years since the ‘flash crash,’ when markets fell by about nine percent in less than 40 minutes in the middle of a trading day. Some well-established companies like Procter & Gamble fell by 40 percent within one minute while others like Sam Adams traded for just one penny per share even though it was selling for around $60 per share minutes earlier. I remember it vividly… Read More
The Bureau of Labor Statistics (BLS) offered some good news regarding the employment situation on Friday. The economy added 295,000 new jobs in February, far better than the consensus expectations of 240,000 and the unemployment rate fell from 5.7 to 5.5 percent, a new low since the 2008 financial crisis and the peak unemployment rate since then of 10 percent in 2009. Part of the reason for the decline in… Read More
A correction is defined as a 10 percent peak-to-trough decline and a bear market is defined as a 20 percent peak-to-trough decline. With those definitions in mind, it’s worth noting that the utilities sector entered correction territory yesterday after falling 10 percent from their highs at the end of January. Energy stocks are down more than 20 percent since their high last summer, and have been in bear market territory… Read More
If you were watching CNBC or Bloomberg television yesterday, you saw that the ‘big news’ of the day was that the NASDAQ market crossed 5,000 for the first time since the peak of the tech bubble. Although the financial news media loves to celebrate when indexes cross round numbers (think 2,000 for the S&P 500 or 18,000 for the Dow Jones Industrial Average), they don’t do a whole lot for… Read More
Which sector returns were better last year, healthcare stocks or utilities? There’s no question that both had great years, up 25.26 and 28.94 percent respectively, compared to 13.66 percent for the S&P 500. The question, though, asks which is better, and I think the answer depends a little on what you care about. If the answer is straight performance, then clearly, utilities won by 3.68 percentage points. The following chart… Read More
The talking heads on CNBC have been talking a lot about how the first few days of trading this January are a lot like the first few days of last year: the polar vortex, nervousness about the economy and sharply falling stock prices. In fact, that’s all true, but I’m hard pressed to draw any implication from the similarities. First of all, we’re talking about five data points – almost nothing… Read More
