Granddad rocked back and said, “The news is pretty tough to read these days. Makes me want to sit on the porch and just watch the leaves turn.” He shook his head and mentioned all sorts of events that made him wonder if the United States could ever bounce back. First, he brought up the battles for control in the Gaza strip and the fierce fighting over Palestinian areas. Then came speculation on how the United States was going to…
Two weeks ago, this column was about the bird flu. Most likely, when you look at your October brokerage statement in the next week or two, you’ll feel the symptoms. You’ll feel a bit puny, tired, achy and feverish. You’re tired of looking at weak statements, achy from getting punched by your stocks, and nearly feverish when you look at your statement’s stagnant bottom line. It’s no wonder you feel queasy. As this is being written, the Dow Jones Industrial…
The fear du jour is the Avian Flu and the potential for the mother of all global pandemics. In November 2004, the World Health Organization said an influenza pandemic was “inevitable,” and in May of this year scientists predicted it could strike as much as 20 percent of the world’s population! Recently, news media have shown pictures from Asia of crates of dead birds and reported new predictions, ranging from 5 million to 150 million human deaths. Hundreds of millions…
Where can a retail investor go to get accurate recommendations and opinions on a stock? Back in the old, old days, an investor would call a stockbroker, also called a “customer’s man,” and get a copy of a research report. Only good clients could get the research reports so there was an air of exclusivity about them. Or if an investor were really diligent, he could go to the public library and leaf through the super-thin pages of the giant…
No one really knows how Katrina is going to affect the economy. Some economists say it will be a whopper of a negative while some are convinced-and convincing-that she ultimately will be positive for GDP. But based on the fact the stock market, which is the great predicting machine, advanced a couple of percentage points in the week following the disaster, I’d have to go with the positive bet. The slow response and evacuation snafus were one problem, but the…
A bouillabaisse of market thoughts … Chinese IPOs have caused some recent market excitement, and the best fireworks display was by Baidu.com, a Chineselanguage Internet search engine that went public Aug. 5. Baidu.comopened at $27 on a Friday and at the close of business had soared to $122. On the next Monday, some poor soul paid $153 for it. In the weeks following Baidu.com’s pyrotechnics, there was talk about how the Chinese and Indian economies are booming and their stock…
The spike in the price of oil has many people singing the blues, and using it as an excuse for nearly every imaginable problem. Oil has been a scapegoat for the weak stock market, poor sales at Wal-Mart, tough times at Bob Evans restaurants, and a bad summer at the movie box office. Conventional wisdom is, gas costs so much that the average family can’t afford to buy gas AND shop, eat out, or go to a movie. Nobody likes…
“The stock market stinks and isn’t going to get any better.” That, in a nutshell, is what a bearish soothsayer espoused recently in Barron’s. He said the tech-stock bust, 9/11, the Iraq War and frequent terrorism would keep a lid on returns for several years. He’s right about the market stinking. Most stock market investors haven’t made a nickel since the new millennium began. Starting at the beginning of this decade through the end of June, $10,000 put into the…
Stocks or real estate. Which one will “show you the money”? In my last column, I pointed out that-over two or three decades-an investment in stocks, with an average 10-percent return, should double in value every seven or so years. The big problem investors have is that the average 10 percent return is created by erratic and sporadic bursts and busts in stock prices. It’s nerve-racking. The bursts and busts really tax people’s emotions and drive some people away from…
A baby-boomer client told me the other day that his wife was concerned whether they were going to have enough money for retirement 20 or 25 years from now. This couple’s retirement income concern is common and is one of the top worries boomers have, even ranking above their fear of sponge baths. To address this fear, you could pay a financial planner a few hundred bucks to do a whiz-bang, multi-page retirement projection using “Monte Carlo” simulation. The planner…
There are many ways to invest your money in the stock market and no shortage of convincing salespeople preaching the best way to do it. The “can’t-beat’e m- s o – j o i n – ‘e m ” crowd thinks index funds are the way to go. Some think actively managed mutual funds are best, while others go for individual stocks. All the above ways have merit, pluses and minuses, and different levels of involvement from you, the investor….
In 1995, Jane Bryant Quinn wrote an article in Newsweek titled “The Big Tease” and used the term “financial pornography” to describe magazine headlines we have all seen. Headlines like: “Ten Mutual Funds to Buy Now” “Surefire Oil Stocks” “Five Stocks to Own for Your LIFE” “How to Profit from $100 Oil” One of the definitions of pornography in Webster’s is “the depiction of acts in a sensational manner so as to arouse a quick intense emotional reaction.” Replace the…
On May 13, Tiger Woods missed a putt and, for the first time in seven years, didn’t make the cut in a PGA tournament. Tiger wasn’t so happy, but the guy who made the cut because of Tiger’s miss was delighted. Two days before Tiger’s historic miss, in a crowded Chicago courtroom, United Airlines won permission from the U.S. Bankruptcy Court to renege on some of the pension payments it owed to retirees and employees. The decision was historic, as…
In the 1958 Disney documentary “White Wilderness,” the viewer saw what looked like hundreds of lemmings following one another over a cliff and falling to their deaths. Ever since their big-screen debut, lemmings have had the unfortunate reputation of being stupid, blind followers of one another regardless of the consequences. What the audience didn’t see were cameramen herding the poor little rodents over the cliff with a piece of plywood. You see, lemmings don’t commit suicide. About the only creature…
Remember the toys back in the ’70s called Weebles? They were little egg-shaped people weighted so they would always stand upright. The manufacturer’s advertising slogan was, “Weebles wobble, but they don’t fall down.” The stock market has wobbled like a Weeble for six years. For stocks, the first quarter ended with a thud with the Standard & Poor’s 500 down about 3 percent and the NASDAQ down 8 percent. The price of oil went up more than 25 percent during…
Have you been an investor in stocks for 20 years? Since the demographics of this paper show that the average subscriber has household income of more than $220,000 and is 48 years old, the answer is probably, “yes.” Over 20 years, the S&P 500 has returned 10.3 percent per year, which means that $40,000 invested in stocks in 1984 would now be worth $280,000. The problem, though, is the market returned 10 percent, but Average Joe Investor only earned 7.9…
The price of crude oil hit $55 a barrel last week. The oil “experts” are all over the news predicting doomsday scenarios of economic ruin. Their concerns are that no new oil fields are being discovered, many of the oil-producing countries are run by kooks, fat Americans are buying bigger and bigger SUVs, and China’s thirst for oil is just getting whetted. All of these are valid and logical concerns. And Lord help us all if the Chinese take a…
One trait Americans have perfected is fretting. We are the most anxious of all cultures at a time when our prosperity is at its peak. According to the Federal Reserve Board’s flow of funds accounts, Americans’ household assets and net worth are at alltime highs, home ownership and homeowners’ equity are at all-time highs, and we have more money in the bank and money-market funds than we’ve ever had. Still, we are popping anti-depressants like popcorn. Even after all the…
I have been ranting like a broken record for the last several columns about how stocks are cheap and should provide great returns for the next few years. Over the past six weeks, I’ve explained why the Dow Jones industrial average should crack 19,000 by the end of this decade, why the “five-year three-peat” should usher in a bull run, and how the “global synchronized boom” should propel earnings and stock prices. All those long-term “shoulds” may make you think…
The four most dangerous words an investor can mutter are, “It’s different this time.” You heard the phrase a lot in the late 1990s and it was usually surrounded by words like “new economy” and “paradigm shift.” We should all know by now that it’s never really different. Boom and bust trajectories pretty much look the same whether they are tulip bulb prices, radio stocks, Internet stocks or Britney Spears’ record sales. Using the premise that same-old, sameold will rule,…
