$50 Billion(!) Surges & Swoons — in One Stock! The big surprise about this quarter’s earnings surprises? They’re actually a surprise. And how do you know that? By the mammoth moves — both up and down — in the stocks of companies announcing those earnings immediately afterwards. If you’re not keeping score, here’s the roster...Read More
Indexing’s Looming “Free Rider” Problem “If you’ve been playing poker for a half-hour, and you don’t know who the patsy at the table is . . . it’s you.” –Warren Buffett “Index funds run by Vanguard see record inflows as savers turn to autopilot.” –“Investors Shun Stock Pickers”; The WSJ (1/5/2015) I’m a long-time fan...Read More
Updating Mark Twain “OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November.” –Mark Twain I have my own version of Twain’s observation about the stock market — as well as a prediction about next year’s stock market action. January: stocks soar. February: ...Read More
Turning Keynes Inside Out “Markets can stay irrational longer than investors can stay solvent.” –John Maynard Keynes In light of The Federal Reserve’s unprecedented, going-on-six-year campaign of monetary stimulus, perhaps the question to ask isn’t, “why are stocks trading at record levels?” Rather, it’s “why aren’t stocks even higher?” My answer: because at least some...Read More
Did the Fed “Buy Itself a Landslide?” “Dear Jack: Don’t buy a single vote more than is necessary. I’ll be damned if I’m going to pay for a landslide.” —JFK quoting a made-up telegram from his father, Joseph Kennedy, after he first won election to Congress. As far as I’m concerned — and I know a lot of...Read More
Housing Market – Stock Market Linkage Economic observers — and readers of this blog — know the dynamic well. Namely, melting stocks precipitate a flight to safety (bonds), which drives down interest rates . . . helping home sales (at least in the short run). In fact, just such a sequence played out this week,...Read More
