Posted on 11/23/2014 12:48:39 PM PST by expat_panama
Investment & Finance Thread November Rally Progress Report
Great time for investing! Gold & silver have been recovering for a couple weeks now and a stock index rally is already in it's sixth week. What's next --can it last? Pundits (as usual) are covering all sides, so anyone wanting to indulge their confirmation bias need only pick their favorite flavor op-ed:
Downside |
Upside |
not de-sided |
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| Falling inflation a worry for Europe but also the world Cramer Remix: Warning about Friday's rally Global Economy Weekahead - Falling inflation a worry for Europe but also the world (h/t Chgogal) Hotcakes Actually Aren't Selling That Well - Kyle Stock, Bloomberg BW Why Wall Street Breeds Bad Apples - Suzanne McGee, The Fiscal Times Bankers Lie. So Does Everyone Else - Leonid Bershidsky, Bloomberg |
Giving thanks for big stock gains Investors: Damn Ubergate and Full Speed Ahead With Mega-Funding Europe not at risk of full-blown deflation: ECB's Constancio Loading Up on Stocks--After You Retire - Robert Powell, MarketWatch Venmo: Cash Is for Losers! - Felix Gillette, Bloomberg BusinessWeek Why the Bears Are Wrong About 'Unhealthy' Market - Jeremy Hill, Forbes |
Is a market top setting up? A Giant Paradox In the Markets & Economy - Neil Irwin, NY Times
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Looking at the new stock highs we want to know two things: first is the surge normal, and second is the increase out of proportion to company earnings and dividends. 
So lots of folks check out the ratio gotten by dividing stock prices by their earnings (Price/Earnings Ratios) or by dividing stock dividends by stock prices to get a dividend yield percentages. Forget the pundits, they get it wrong. In fact, here's Obama saying PE's were bullish (he miss pronounced it as 'profit earnings ratio') at the very time they were spiking to an all time bearish.
These days anyone can get stats going back over a century --here's a link to Bob Shiller's site at Yale w/ S&P valuations from 1871. A plot of the index plus PE and div yield looks like the graph on the right (click to enlarge), and going back over all the data kind of shows the idea that when stocks are cheap the PE goes down and the dividends look big. OK, some of the time they show that.
However, nobody here is managing his life savings over a 143-year time frame so lets zoom in on the past 14 years:
Doesn't matter what the pundits say, the numbers are not telling us stocks are over priced. Valuation prices are right where they were at the beginning of 2008. Bad example. They're right where they were in the beginning of 2004.
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Bottom line here is that our upcoming Thanksgiving Day we can add this rally to our long list of things we're grateful for. Since the whole idea of flavoring wine w/ toast (hence "toasting") began around the time of the first Thanksgiving Day, my extended family celebration will most probably begin the meal with a shared toast "...to all that has come to pass!"
Happy Thanksgiving all!
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This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our--
Open invitation continues always for idea-input for the thread, this being a joint effort works well. Keywords: financial, WallStreet, stockmarket, economy. |
Happy TurkeyDay week ping!
When everything is not real and money is printed...debt balloon, I just look for bargains and such.
Compass Minerals intrigues me as cold winters needing ice melt...also SWHC is on sale guilt by association...
RGR (Sturm Ruger) has dropped from $80+ to $38. It appears to have hit bottom.
RGR —ah, a blast from the past. Sold that one in the beginning of Dec ‘13 and it hasn’t come up on my radar since. IBD’s now rating it at a decrepit ‘14’ these days.
SWHC used to look really good to me but its current quarter earnings is -60% for the year and sales last qtr is -23%. Lot of negatives there lately, tho as you say ‘by association’ the sector is currently dismal.
Gold is becoming very interesting.
Russia has been trading its falling rubles for gold, which has been rising in the past few weeks. So Russia’s been coming out ahead.
And so can everyone else, if they, too, convert their ever-decreasing currencies — as the world’s printing presses remain in overdrive — into precious metals.
If China decides to join in, happy days will be here again for gold bugs.
There’s a low-priced gold stock called Gold Resource Corporation (GORO) which pays a 3.20% dividend, which is suitable even for gold skeptics who want to earn a greater return on their money than they can get from a bank.
Top Gold Producing Countries
1. China – 355,000 kilograms
2. Australia – 270,000 kilograms
3. United States – 237,000 kilograms
4. Russia – 200,000 kilograms
Same to you. Thanks for your work/posts on FR. Best wishes to all informed FReeper investors.
A very good Monday morning to you! While pre-bell markets are slightly off, futures traders have been putting stock indexes up 0.22% and metal at -0.37%. No major econ stats today, but lots to read while waiting:
Global stocks grind higher after central bank stimulus signals World stock markets ground their way higher on Monday after a frenetic round of activity at central banks in Asia and Europe showed they are willing to do more to support economic growth and higher inflation. ...
Santa's Coming? Truth About Year-End Rallies - Alex Rosenberg, CNBC
US Stocks 2nd Most Overbought In History - Dana Lyons, Yahoo
Does Stock Market Trading Volume Still Matter? Nov 17 by Chad Karnes
One is that it's awfully easy to get the impression that the blogger was lurking on this site the day before he wrote the blog. The other is that the 1871-2014 time frame is the only thing that makes today's stocks seem overpriced. I agree with him though. Anyone who thinks we are now in an investing environment that involves the Austrian empire invading Bosnia while the the Tsar rules Warsaw --that's an investor that needs to sell everything as soon as possible and take up knitting.
This is his 140 year time frame, and I like these choices better.
"Stocks kicked off a short trading week higher Monday, with the main indexes starting and closing strongly. Helped by biotechs and software stocks, the Nasdaq rallied 0.9% to a fresh 14 1/2-year high. The S&P 500 rose 0.3%, which was good enough for a record closing high." (from here). Gold'n'silver were flat.
Today everyone will be having a great day because most are off on vacation but those few traders still at it are seeing metals up 0.59% and stocks up 0.12% --and we expect to have even more fun with:.
GDP - Second Estimate
GDP Deflator - Second Estimate
Case-Shiller 20-city Index
FHFA Housing Price Index
Consumer Confidence
and these:
Here's Why I'm Not Selling My Stocks - Henry Blodget, Business Insider
What Could Stop This Unstoppable Rally - A. Mirhaydari, Fiscal Times
Pressures On the Economy Just Increased - Lance Roberts, Zero Hedge
Behind China's Monetary-Policy Surprise - Stephen Roach, Project Syn
What the Heck Is Happening to the Global Economy? - Quartz
The Fed Has Boxed the U.S. Into a Corner - Satyajit Das, MarketWatch
I have a hypothetical for you. Say you had a Uncle that died and left you $50,000 in stock. Your choice between AAPL,AMZN, FB, GOOG, MSFT, or TSLA. The one stipulation is that you have to leave it alone for ten years. Which would you pick? Feel free to add to that list if you think there is a better long term prospect.
Dang -one heck of a question. There’ve been sooo many names that everyone thought were eternal and invulnerable -—General Motors, Pan Am, Woolworth, Atari, Lehman Brothers, they all went bankrupt leaving shareholders w/ nothing even while a decade earlier they were all favored darlings.
Last night the wife and I were watching the episode of “Downton Abby” where the Earl of Downton finds out what a mistake he’d made ten years before when he put the entire family fortune into one stock —it was a sure thing that failed while he was ignoring all the warning signs.
imho investments need to be checked regularly because the future’s never certain.
imho investments need to be checked regularly because the future’s never certain.
A wise investor will look at the performance of his assets quarterly, and "re-balance" when necessary.
Then again, if you are Hillary Clinton, and make an extremely risky bet on cattle futures, have 100x the ROI, I'd listen to her "advisors."
Spit.
5.56mm
I agree about keeping an eye on them. I was wondering about which ones you thought most likely to grow by leaps and bounds. I debated about putting Microsoft on there but they seem to have a little fire in their belly after Balmer. Apple is hard to argue against. Amazon is an enigma. If they ever focus on making a profit it should soar. Google and Facebook seem to be branching into some pretty future orientated areas. Tesla is too if they can make it work.
Good morning all on this busy week of anticipation/preparation --for the markets that is. Stock indexes and precious metals all inched up in tight trade and NASDAQ even punched in another 14-year high before settling back. After yesterdays solid production news we'll be flooded w/ a huge morning report stack:
| MBA Mortgage Index Initial Claims Continuing Claims Durable Orders Durable Goods -ex transportation Personal Income Personal Spending PCE Prices - Core Chicago PMI Michigan Sentiment - Final New Home Sales Pending Home Sales Crude Inventories Natural Gas Inventories |
That can work, the idea that what's being rebalanced is between broad based diversified portfolios that are being rebalanced into different investment types --like stocks into bonds or antiques into real estate. A buddy of mine sunk the entire family inheritance into one real estate fund that only communicated w/ him thru an 'annual report'. He lost out big time when the bubble burst.
imho my friend's big mistake was like w/ the character in Downton Abby, thinking that creating wealth w/ one's capital takes any less effort than creating wealth w/ one's labor. Very foolish thinking, though it's a popular misunderstanding.
Those companies are sure in the news a lot these days, Apple's now worth $700B --(imagine it becoming a TRILLION DOLLAR corp in a few years); GOOG's been buying out a NASA space station and now talking about breaking up spinning off subsidiaries. The thought of predicting a decade into the future leaves me a bit fogged over though, kind of like asking me if the Republicans will take the Whitehouse in 2024.
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