a blog about investing
In the wake of across the board government spending cuts, this month President Obama proposed a new R&D initiative aimed at mapping the brain. Critics immediately balked over the $100 million price tag, but those protests may be penny-wise but pound foolish given some of the breakthroughs government has achieved in the past. read more…
It was another good week for the averages with all three indexes chalking up five days of gains in a row. Friday, however, was a mild disappointment thanks to the latest GDP data. read more…
Tuesday’s ‘flash crash’ precipitated by a fake tweet attributed to a major news organization is old news by now. No long term investors got hurt in the debacle and by the end of the week it was business as usual in the nation’s exchanges. That doesn’t mean it won’t happen again and again. read more…
The Financial Verse
“Then we’d own those banks of marble,
With a guard at every door;
And we’d share those vaults of silver,
That we have sweated for”
“Banks are made of Marble” by Pete Seeger
Over the last few years, the Federal Reserve has practically given money away to any entity that calls itself a bank. Individual states have also tried, but so far the banks have just been hoarding this growing pile of cash instead of loaning it out. Why? read more…
“Don’t stand there moaning, talking trash
If you wanna have some fun,
You’d better go out and spend some cash
And let the good times roll
Let the good times roll
I don’t care if you young or old,
Get together and let the good times roll”
B.B. King, Bobby Bland
It appears Monday’s low in the stock market averages concluded this last little sell off. The decline occurred, courtesy of Standard and Poor’s credit agency. It reduced its outlook for U.S. Treasury bonds from neutral to negative. Since then the markets have climbed back and are now preparing to test the next level of resistance.
Monday’s surprise announcement that the outlook for U.S. debt has been downgraded reverberated around the world. Global markets shuddered. Investors rubbed their eyes as they re-read the announcement and then hit the “sell” button. Markets declined by 1-2%. Yet, by the end of the week, stocks and bonds recovered. Was this some kind of false alarm?
On a daily basis, I review portfolios of stocks and mutual funds from clients and readers. What strikes me most about all these portfolios is that I rarely come across one that has done better than the market. A large part of the problem lies in their choice of investments.
The best rallies are those that move up, take a breather and then move up again. That way markets do not get extended, the gains are fairly predictable, as are the pullbacks. It appears that is the kind of market we are in at present.
The markets presented plenty of head fakes this quarter. In January, contrary to everyone’s expectations, the gains of last year kept right on coming through most of the first quarter, only to hit a brick wall in March thanks to troubles in the Middle East followed by nature’s one-two punch to Japan. Despite that, the indexes finished the first quarter with the best gains in over two decades.
Trashed by environmentalist, near and far, it is the bad boy of the energy arena. Environmentally hazardous, its producers and consumers are notoriously lax in even attempting to do something to control the pollution they spill into our atmosphere. You know these boys. Their industry usually hides under the proverbial wood pile minting money, only reluctantly revealing themselves in daylight when called to explain yet another mine disaster or ruined river. So why is the demand for coal and those that produce it gaining popularity on Wall Street?
Follow A Few Dollars More
Pipeline: why the pipeline is a good idea ow.ly/EFQmg
What comes around, goes around ow.ly/EGykk
Oil-not all is what it seems ow.ly/EhGG2
China muscles in ow.ly/Eeu3g