Archive for the ‘Investing’ Category

What if the Greece Doomsayers are Wrong?

Posted 14 May 2012 — by Covestor
Category Economy, Greece, Investing, Market News, Trading

Greece - market

By Michael Tarsala

Conventional wisdom says that a Greek return to the drachma is inevitable, and a best-case scenario is a smooth transition from the euro.

But what if all the doomsayers are wrong? Read More

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Facebook’s (NASDAQ:FB) Pointless IPO Fear

Posted 14 May 2012 — by Covestor
Category FB, GOOG, INTU, Investing, IPOs, Market News, Social Networking, Stocks, Trading

By Barry Randall

Facebook (FB)It’s interesting to see the lengths to which Mark Zuckerberg is going to avoid taking Facebook (NASDAQ:FB) public. Never mind that Facebook has actually filed to go public with the SEC and did its road show last week. You’d think poor Mark was trying to avoid going to the dentist.

But of course the moment that Facebook accepted its first venture capital from Accel Partners in 2005, Zuckerberg implicitly agreed to eventually take the company public, even if he didn’t understand it at the time. And in becoming a public company, the shareholders will be in charge. Well, mostly. Thanks to Facebook’s dual share classes, Zuckerberg will continue to own 57% of the voting power. Read More

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Market Timing Signal: Down (Video)

Posted 14 May 2012 — by Jeff Pierce
Category Investing, Market News, Technical Analysis, Trading

By Jeff Pierce

Nasdaq Composite Index ($COMPQ) – Daily

Nasdaq Composite Index ($COMPQ) - technical analysis

Technical Analysis Video: Read More

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John Hussman: The Market’s ‘Dancing on the Edge of a Cliff’

Posted 14 May 2012 — by Covestor
Category Investing, Market News, Stocks, Technical Analysis, Trading

By Mick Weinstein

John Hussman

John Hussman

In his recent weekly commentaries, mutual fund manager John Hussman has warned that current market internals – vis-a-vis its return/risk profile – are among the worst recorded on the historical record. In this week’s commentary, Hussman finds that over the past 7 days things have become even worse, and offers a chart to illustrate (emphasis added):

The green bands in the chart below depict all of the points since 1980 in the neighborhood of present conditions – having a nearly similar prospective return/risk profile, coupled with a particularly hostile “exhaustion syndrome” that has been a hallmark of the worst market outcomes in recent decades. The blue line shows the S&P 500 Index. As I noted in Goat Rodeo, “what this combination picks up is an already fragile set of market internals that has enjoyed an ‘exhaustion rally’ that both exceeds earnings growth and is met with overbullish sentiment.” Read More

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Doug Kass Buys JPMorgan Chase (NYSE:JPM) as an Investment

Posted 14 May 2012 — by Covestor
Category Financial, Investing, JPM, Market News, Money Center Banks, Stocks, Trading

By Michael Tarsala

JPMorgan Chase & Co. (NYSE:JBM)Doug Kass over at TheStreet.com says he’s buying a small amount of JPMorgan Chase & Co. (NYSE:JBM) here as an investment.

Among his arguments:

  • JPM and the big banks already trade at low PE multiples (JPM is at less than a 7x forward P/E, more than a 40% discount to the S&P 500).
  • The cost of the $2 billion trade is fairly low to JPM, in the grand scheme of things. Read More

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Market Watch: Option Index Update

Posted 14 May 2012 — by Christoper Ebert
Category Economy, Investing, Market News, Options, Technical Analysis, Trading

By Christopher Ebert

options - marketRecent selloffs in the market were nearly enough to cause a change in the option indices. The LCMPI came very close to a level that would have strongly indicated the end of the 2012 Bull Market, but has not reached that level as of May 10th. The LSSI remains normal and the CCNPI actually returned to bullish ground last week. Although the CCNPI is positive, the weakness in the LCMPI suggests that traders who do decide to go long at this point should be extra-vigilant with stop losses or protective puts.

  • The Long Straddle/Strangle Index (LSSI) which measures the justification of fear remains well within the normal limits of -5% to +5. The index is unchanged from a week ago and is an indication that implied volatility of at-the-money options continues to be a fairly accurate predictor of performance of the S&P 500.

In a market that is functioning with normal emotions, a long straddle or strangle is generally a losing trade. Losses exceed 5% only when fear is unjustifiably high causing the combined option premiums to far exceed the actual movement of market prices. Likewise, profits exceed 5% only when the market moves in a way that takes the majority of traders by surprise. Read More

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Why We Changed the Lineup on Our ETF Models

By Charles Sizemore

Charles Sizemore

Charles Sizemore

Sizemore Capital is making a strategic allocation shift for all ETF portfolios with U.S. large cap exposure. This affects the Tactical ETF Portfolio and the Strategic Growth Allocation. To be consistent with Sizemore Capital’s focus on dividend growth, we are eliminating our long-term positions in the iShares S&P 500 Index ETF (NYSEARCA:IVV) and replacing them with the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG).

The Vanguard Dividend Appreciation ETF (VIG) tracks the performance of the Dividend Achievers Select Index, which consists of U.S. stocks that have long history of raising their dividends. Every stock in the portfolio must have raised its dividend for a minimum of 10 consecutive years.

Much of our research and investment in recent years has focused on income and income growth, and for good reason. Capital gains can be ephemeral, and the only way that investors can realize their returns is by selling shares. Rather than enjoying the milk in the form of dividends, you end up slaughtering the cow. And continuing this analogy, once the cow is gone investors are left with nothing to eat. Read More

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Latest Economic Data Indicates a Slow, Steady Move Higher

Posted 14 May 2012 — by Covestor
Category Economy, Investing, Market News, Trading

By Michael Tarsala

Covestor manager Gregg Giboney, who runs the Dividend and Growth model, is among many who say the economy continues to chug slowly ahead.

In line with that thesis, consumer sentiment reached a four-year high, based on the May data release.

University of Michigan Sentiment IndexSource: FXTimes.com

The chart above bears out what Giboney is saying — a slow, but steady move to the upside. The preliminary reading of the University of Michigan-Thomson Reuters index reached 77.8, its best mark since January 2008, a month after the recession began. Read More

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TomTom (AMS:TOM2) Now Offering Free Roadside Assistance

By Lynn Shannon

TomTom NV (AMS:TOM2)TomTom NV (AMS:TOM2) announced it will offer free roadside assistance along with its “Start” portable navigation devices (PNDs), and it will extend the offer to its VIA and GO LIVE products in the coming months.

The service provides a basic level of roadside support, including the “quick and reliable dispatches of responsible and professional service providers with a simple phone call from anywhere in the U.S,” said the company. Read More

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Super Moon Brings Down The Financial Sector

Financial Sector - Super Moon - May 6th, 2012

Super Moon on May 6th, 2012

By Karen Starich

Full Moon May 6th, 2012

The distance of the full Moon on May 6th is 356,954 km from earth, which is the minimum range. If you have an opportunity to see the Moon at night you will notice the size is larger than normal. The Moon’s gravity on the earth becomes much more intense and these lunar events are called “Super Moons”, because of the increased tidal occurrences and severe weather they can produce. I should point out that the last “Super Moon” was March 19th, 2011 at a distance of 356,580 km. Read More

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JPMorgan Chase (NYSE:JPM) Shows Why Volcker Rule Has No Teeth

By Michael Tarsala

JPMorgan Chase & Co. (NYSE:JPM)A $2 billion loss at J.P. Morgan Chase & Co. (NYSE:JPM) is arguably small; the bank earned more than $18 billion last year.

What’s the big deal then?

It’s a question of whether banks are still making outsized speculative market bets and now calling them hedges to satisfy the Volcker Rule. And whether we can expect even bigger “hedging” losses at other banks — and even more market volatility — in the future. Read More