Investments go from Friday 13th to Ides of March-- Thread March 15, 2015

Weekly investment & finance thread ^ | MARCH 15, 2015 | Freeper Investors

[expat_panama]

whatever it is this morning it’s good for stocks and bad for metals

[expat_panama]

you’ve got a point but the DOW just ain’t what it used to be, kind of like the lower Manhattan financial district, not much left along the old ‘Wall St.’

[Lurkina.n.Learnin]

Europeans defy US to join China-led development

http://www.ft.com/intl/cms/s/0/0655b342-cc29-11e4-beca-00144feab7de.html

[abb]

Charles Dow never intended the Dow Jones Industrial Average to be a finely tuned barometer of the overall stock market. It was, and still, is reflective of the most “important” publicly traded companies, and is a shorthand indicator of how the broad market is doing.

It still serves that purpose admirably, IMO. It is STILL the most widely quoted index that answers the question of “how’s the market doing.”

See this note at Investopedia.

http://www.investopedia.com/articles/stocks/08/dow-history.asp

“Considering the breadth of today’s economy, one might mistakenly believe that an index consisting of a mere 30 stocks could hardly be of any value. That is simply untrue. In addition to representing 30 of the most highly capitalized and influential companies in the U.S. economy, the Dow is also the financial media’s most referenced U.S. market index and remains a good indicator of general market trends.

If one compares a pricing chart of the Dow with a chart of the Wilshire 5000, the most inclusive of all U.S. indexes, it is evident that the two have followed astonishingly similar paths. The Dow has historically begun to decline for extended periods before the more speculative Nasdaq index, a pattern which occurred in the stock market downturns that began in April of 1998, January of 2000, December of 2001, January of 2004, December of 2004, and October of 2007.”

Also, this history.

http://www.djaverages.com/?go=industrial-overview

“When Charles H. Dow first unveiled his industrial stock average on May 26, 1896, the stock market was not highly regarded.

Today, stocks are widely accepted as investment vehicles, even by conservative investors. The circle of investors has widened far beyond the Wall Street cliques of the past to millions of everyday working men and women. These people are turning to stocks to help them amass capital for their children’s college tuition bills and their own retirements. Information to guide them in their investment decisions is now abundantly available.

The Dow Jones Industrial Average played a role in bringing about this tremendous change. One hundred years ago, even people on Wall Street found it difficult to discern from day to day whether the wider stock market was rising, falling or treading water. Charles Dow devised his stock average to make sense out of this confusion. He began in 1884 with 11 stocks, most of them railroads, which were the first great national corporations. He compared his average to placing sticks in the beach sand to determine, wave after successive wave, whether the tide was coming in or going out. If the average’s peaks and troughs rose progressively higher then a bull market prevailed; if the peaks and troughs dropped lower and lower, a bear market was on.

It seems simplistic nowadays with the array of market indicators in the public eye, but late in the nineteenth century it was like turning on a powerful new beacon that cut through the fog. The average provided a convenient benchmark for comparing individual stocks to the course of the market, for comparing the market with other indicators of economic conditions, or simply for conversation at the corner of Wall and Broad Streets about the market’s direction.

The mechanics of the first stock average were dictated by the necessity of computing it with paper and pencil: Add up the prices and divide by the number of stocks. This application of grade-school arithmetic, while creative, is hardly useful more than a century later. But the very idea of using an index to differentiate the stock market’s long-term trends from short-term fluctuations deserves a salute. Without the means for the ordinary investor to follow the broad market, today’s age of financial democracy (in which millions of employees are actively directing the investment of their own future pension money and as a result are substantial corporate shareholders) would be unimaginable.”

[expat_panama]

...a shorthand indicator of how the broad market is doing.  It still serves that purpose admirably, IMO...

It does that imho too.  The DIIA with all it's elegant simplicity ends up tracking the S&P500 closely to the point that watching one's about as good as following the other.

[abb]

Found that interesting that early on something was needed that could be done with pencil, paper, and simple arithmetic.

[Lurkina.n.Learnin]

Strange day today. I checked IBD’s Stocks On The Move a couple of times earlier and just now and it kept saying
“There are currently no stocks that meet the Stocks on the Move criteria.” I don’t believe I’ve seen that before.

[expat_panama]

 

	Markets		Yesterday		Today
	metals		November's bases failing for gold (to $1,148.40) and still holding for silver ($15.57)		Trading lower; futures -0.58%
	stocks		As IBD put it: "...bounced from session lows Tuesday in a new sign that last week’s bottom could hold."		futures now trading lower for most indexes, over all to -0.39%

A very happy day to all, even if maybe a bit more "adventurous" than we'd prefer.  Trading direction seems in flux, maybe they're nervous about the  FOMC Rate Decision after the MBA Mortgage Index and Crude Inventories.  If traders are upset about Isreal's election results imho they shouldn't be.  News headlines:

The Fed Is Raising the Price Of a Free Lunch - Tad Rivelle, RealClearMarkets
As Fed Gears Up, Global Investors Go Bearish - John Shmuel, National Post
WH Wind Power Claims Are Implausible, Dangerous - Julian Morris, RCM
Finally, A Bank Stands Up to Obama's Shakedown - Editorial, Investor's
Shares up in Europe and Asia before Fed meets; dollar steady Reuters - 8 hours ago LONDON (Reuters) - European shares followed Asian stocks higher on Wednesday and the dollar held steady before a Federal Reserve meeting that's expected to lay the groundwork for the first increase in U.S.
China stocks at 7-year high on stimulus hopes as other world benchmarks brace ... Fox Business - 2 hours ago A currency trader holds up Malaysian ringgit notes at a currency exchange store in Kuala Lumpur, Malaysia on Tuesday, March 17, 2015.
Dollar bulls bank on Fed losing its patience
Oil Drops to Six-Year Low as Dollar Swings Before Fed

[expat_panama]

no stocks that meet the Stocks on the Move criteria

Huh. Well we did have a sharp reversal during the day, then again it may have been just that the IBD-StocksMove guy was late coming back from lunch.  Just the same, I hadn't seen that so mucho tx for the heads up.

[palmer]

The “free lunch” article is fantastic.

[SomeCallMeTim]

I am hardly able to breath, waiting to here if the Fed will stop saying the word “patient”! /sarc

I have a meeting with an investment banker this afternoon. I rolled about half of all my retirement funds into a variable annuity that has an “enhanced Guaranteed Lifetime Withdrawal” and “Enhanced Return of Premium Death Benefit” riders.... It’s managed by FifthThird bank.

It’s a pretty complicated investment vehicle. I’ve read through the contract about 5 times, and still only understand about half of it. Right now, all the money is still sitting in money market funds. Today, we’re supposed to talk about the underlying investment options.

So, I GUESS.... I’m hoping the Fed gets aggressive and the market tanks about a 1000 points in the next couple of days. As long as it bounces back quickly, of course!

[Grampa Dave]

Amen Brother!

“I’ve said it before and I’ll say it again.

What “The sky is falling!” contingent misses is that when you invest in stocks, you are investing in American business.

American business WILL figure out a way to win. They always have, they always will. Their CEOs want it, the politicians want it - both the liberals and the conservatives.

Individual companies come and go, but, as a whole, American business succeeds.”

Then, add in the foreign money pouring into America to buy stock and property as the Euro/Ruble/? crumble. They don’t sem to be interested in Gold or Silver.

[Lurkina.n.Learnin]

Well, It’s getting closer. Will she or won’t she? Patience! I bet anything but patience will be exercised if she does or doesn’t say it.

[abb]

Well, there you go. Hunting every excuse in the world NOT to hike rates.

[expat_panama]

huh, everything took off soaring and the rate announcement is still a 1/2 hour away. Someone must of leaked “no change”...

[Wyatt's Torch]

Patience

[abb]

[abb]

[Lurkina.n.Learnin]

LOL

[expat_panama]

Seriously, here's the release: Federal Reserve issues FOMC statement.  Someone tell me what I'm missing, but all I gof from it was the economy's going nowhere, they aren't raising rates this month, they probably won't raise 'em next month, and they might sometime after that.  So why is everyone so (1) surprised, and (2) for what possible reason should the FOMC have said anything different?