I was recently out to dinner with a friend who manages tens of millions of dollars in private equity. While the Dow and the S&P 500 are still within two to three percent of their recent highs, my friend is not happy. In fact, he is kind of disappointed with the current trading action in... More »Wine, Steak, and the State of the U.S. Stock Market
If there is going to be genuine economic growth in mature economies, the leadership will have to come from the U.S. economy. The convulsions taking place in the Japanese capital markets are emblematic of the monetary exuberance that both captivates investor sentiment and distorts its reality. It’s a trader’s paradise with such volatility, based not... More »Who Wins in an Artificially Monetized World?
This shouldn’t be a surprise to the readers of Profit Confidential. According to an analysis done last week by the Wall Street Journal, in the first quarter of 2013, corporate earnings growth of companies in the key stock indices like the S&P 500 wasn’t really due to companies doing better. Rather, “research tax breaks” are... More »Truth Behind 1Q 2013 Earnings and What’s Next for Stocks
China’s economy is slowing, but the rich in that country continue to get richer and are growing in number. I was reading the other day that Chinese investors are now some of the biggest purchasers of high-end real estate in the United States—Manhattan, in particular. It would not be a surprise to see a buyer... More »China: The New Breeding Grounds for Capitalism
This week marks the unofficial beginning of second-quarter earnings season as Oracle Corporation (ORCL) reports. Next week, it’s NIKE, Inc. (NKE). These two benchmark companies offer the first glimpse of business conditions for multinational corporations. What they report is material. Last quarter, NIKE surprised Wall Street with excellent relative growth in revenues and earnings, particularly... More »Wanted: Market Seeking Catalyst in 2Q13 Earnings
Volatility has been edging higher since the end of 2012, but so far, the stock market has held up pretty well. Take a look at the chart below of the CBOE Volatility Index (VIX), also known as the “Fear Factor Index,” based on the S&P 500 Index. The VIX reading is holding around 16.8—well below... More »One Simple Measure for Investing in a Volatile Market
One reaction that should not surprise long-term investors is that the market will move far quicker and further than most people expect. Even before the Federal Reserve has made any statement regarding the timing of reducing its asset purchase program, investors have already begun selling their fixed-income investments, which is causing yields to rise. This... More »Mortgage Rates on the Rise; Repeat of Lead-Up to 2008?
Over the past few months, it appears that the first-quarter economic growth spurt has begun to decelerate in America. This is troublesome, as stock market investors had anticipated that we would be seeing economic growth finally gain steam. Unfortunately, we don’t have the global economy on which to rely. Much of the world remains quite... More »Coast Isn’t Clear for America, Economic Growth Slowing
So this is what it looks like when global investors take their eyes off the Federal Reserve’s quantitative easing policy and focus on the real economy instead! As I’ve been predicting, the global sell-off of stocks looks like it’s beginning in earnest. And you can pinpoint the exact moment investors and economists around the world... More »Global Rout in Markets Gathering Momentum?
It turns out that May 22 was very critical for the key stock indices. But surprisingly enough, this wasn’t just the case for stock exchanges here in the U.S.—it was the same for the global economy, as well.Just take a look at the chart below: Chart courtesy of www.StockCharts.com At first, the chart above may... More »Soaring Key Stock Indices Headed Downward; How May 22 Changed Everything
Before analyzing a company for investment, it’s important to have a perspective on how well the business has performed. Because at the end of the day, if you are an investor, you are buying the business. The FAST Graphs™ presented with this article will focus first on the business behind the stock. The orange line... More »American Eagle Outfitters Inc: Fundamental Stock Research Analysis
All of you know how I feel about the Japanese stock market and the economy in general. Yes, I was wrong in the past when I suggested traders and investors stay away from the Japanese stock market. The benchmark Nikkei 225 has been the top performer this year; in fact, at one point on May... More »Abenomics: The Biggest Ponzi Scheme in History?
The equity market and other capital markets are gyrating on the rise in 10-year Treasury yields. There’s been a lot of unusual movement in currencies as well. Speculation regarding what the Federal Reserve is going to do about quantitative easing and the lull between earnings seasons are definitely factors. There is always equity market uncertainty... More »Action in Dow Jones Transports, Utilities Signaling Caution
Make no mistake about it. The wealth in America continues to rise as it is in other parts of the world. Fueling the creation of wealth has been the easy monetary policy, which has essentially pushed up the stock market to its record-highs. Now the economy is also on the mend; albeit, it has largely... More »Small-Cap Stocks the Place to Be—If Economic Growth Is Real
Finally, some good economic news is coming to the U.S. economy… The U.S. Census Bureau has reported that retail and food services sales for the month of May, adjusted for seasonal effects, increased 0.6% from April and 4.3% from the same period a year ago.(Source: U.S. Census Bureau, June 13, 2013.) This is the first... More »Finally Some Good News for the U.S. Economy?
Boy, were they wrong! Not so long ago, the Congressional Budget Office (CBO) said it expected the U.S. government to register a budget deficit in the current fiscal year of $642 billion. But hold on a minute… The budget deficit so far (as of May 31, 2013) has already hit $626.3 billion, and we still... More »Failed Projections or Just Another Government Lie? You Judge
About six months ago, Twitter launched a new video application called Vine. For those unfamiliar with the app, it allows users to create 6-second video clips that loop continually. Vines are really just an evolution of animated GIFs that have sound and are fully integrated with Twitter for easy broadcast and sharing. Last month, we... More »Are Banks Growing with Vine? Not Yet
Introduction “I think the market is overvalued now,” is a common refrain that I’m hearing from most of the individual investors I have recently been coming in contact with. Consequently, many of these same investors are also currently eschewing investing in common stocks because of that fear. Although I do not agree that the market... More »Searching For Value And Finding It In Today’s Market – Sector By Sector
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