a blog about investing
This week the game changed. The stock market indexes actually had a down week. Most investors are blaming it on the Fed, but not me. read more…
We have all been inundated with the pros and cons of Obamacare. It has become so ubiquitous in our daily lives that most of us have simply tuned it out. We can’t afford to do that much longer. read more…
By my reckoning, this leg of the stock market rally began about a week after the presidential elections. The rally overall has been going on much longer. The question everyone is asking is how long it can go on without a major correction. read more…
Volume was thin, volatility high, and despite all the excitement over the LinkedIn IPO, the averages finished little changed from the levels of last week. This is a market that requires patience and fortitude.
The flooding of the Mississippi River will be the worst disaster in the Delta farming region’s history since1927. Millions of fertile acres in Missouri, Tennessee, Louisiana, Mississippi and Arkansas are under water. Farms along that riverbank could take a $2 billion hit, but to us it simply underscores our argument that agriculture is a long term growth area.
The sell off in commodities over the last two weeks has investors re-thinking the markets. Commodity stocks, especially in the energy area, have led the markets for over a year. Will this pull back in the commodity sphere prove temporary and shallow or is there something deeper afoot?
No question, most commodities have suffered a serious set-back led by silver, which at its worst, experienced a 25% decline before bouncing later this week. Oil also dropped over 13% and a long list of hard and soft commodities had similar declines. This selling spree has dragged the stock market with it.
“That makes absolutely no sense,” argues one Bennington,VT client who rightfully believes that declining prices for commodities is a good thing for the economy, the consumer, corporations and the market.
It started last week with a 25% plunge in silver prices. Gold, oil, corn, and coffee followed in sympathy, and by the end of the week it was a full scale route across the commodity spectrum. These price declines will save corporations and consumers untold trillions of dollars. So why isn’t the stock market celebrating?
“You sold silver too soon,” grumbled a client, “Look, it’s almost $50 an ounce.”
That was just one of the conversations I had with disgruntled investors only one week ago. There is no question I felt bad since I had advised readers to sell at least half their silver investments between $36-37/ounce a few weeks ago. Beginning Monday silver began to drop as the CME hiked margin requirements. By Friday silver had dropped over 25% to as low as $33.05/ounce.
Given that the stock market has almost doubled since its low in March, 2009, one would expect that an entirely new crop of youngsters would be clamoring to become the next generation of America’s stock brokers. So far the evidence points to the opposite conclusion.
This week’s pivotal event was Fed Chairman Ben Bernanke’s first press conference with the media. Judging from the price action in the stock market, Ben passed with flying colors.