Be careful: Stock market turmoil will likely persist
Here is something I know you don’t want to hear: This bear market isn’t over.
Keenan Hauke
Articles
INVESTING: Don’t get complacent; stocks may fall again
Hurricane season in the tropics is coming to a close. Some damaging storms came through, but nothing Katrina-like, and for that everyone is grateful. No, the real devastation this year wasn’t in the tropics. It came on Wall Street in the form of the stock market crash. And there is no denying that a crash is exactly what happened. The scientists at the National Weather Service have a system of rating the strength of a hurricane. Sustained winds of 74-95…
INVESTING: Stocks likely to go lower, but bull run may be near
When I was growing up, a bunch of other kids from the neighborhood and I would play touch football on the street in front of our homes. At least once a game, the ball would take a weird bounce, go out of bounds and someone would yell, “do over!” Then we would all line up again and do it over. Treasury Secretary Henry Paulson and Congress just called for a “do over,” but you don’t get them in real life….
INVESTING: King Paulson’s quest to kill the free market
Comrades, welcome to the new world order! Please, get in line so we can process your papers. Remember, in the new world, there is no pain. Your benevolent leaders have outlawed all problems. In 1984, I read ”1984,”George Orwell’s novel. I was a little young to grasp the full flavor of the book, but the theme hit a chord with me. I turned to Orwell’s “Animal Farm” a few years later, though, and that work was as clear to me…
INVESTING: Government bailouts are only making matters worse
There is a change in the air, and I am not talking about that chill you feel when you walk out in the morning to get your paper. This change I am thinking of is even worse than the chill that signals the end of summer. The federal government of the United States just nationalized two of the largest mortgage companies in the world-Fannie Mae and Freddie Mac. On the morning of Sept. 6, when I heard about the move,…
INVESTING
INVESTING Distressed assets today lead to profit tomorrow Two real estate guys told me recently that the market might be able to grab some traction if the banks would face reality about the true worth of the stuff on their books. Write-offs are large, with an estimated $450 billion written down worldwide this year to date. And if you make an offer for real estate that is less than what the bank has written it down to, most likely your…
INVESTING: Distressed assets today lead to profit tomorrow
Two real estate guys told me recently that the market might be able to grab some traction if the banks would face reality about the true worth of the stuff on their books. Write-offs are large, with an estimated $450 billion written down worldwide this year to date. And if you make an offer for real estate that is less than what the bank has written it down to, most likely your offer will be rejected. The bank is still…
Time-tested market tools say it’s still a bear market INVESTING:
Bull and bear markets are different animals, and they need to be treated differently. Knowing which market you are in is one of the most helpful pieces of information an investor can have. Realizing there are no absolutes in this business, we have to rely on an array of tools and indicators to help us reach a determination. We then have to hope that this “weight of evidence” approach proves as reliable as it has over the last 200 years….
Time-tested market tools say it’s still a bear market INVESTING:
Bull and bear markets are different animals, and they need to be treated differently. Knowing which market you are in is one of the most helpful pieces of information an investor can have. Realizing there are no absolutes in this business, we have to rely on an array of tools and indicators to help us reach a determination. We then have to hope that this “weight of evidence” approach proves as reliable as it has over the last 200 years….
INVESTING: Financials are way down; don’t be tempted to buy
They say the bodies are piled high on Wall Street of those who were right at the wrong time. Well, with all the soured predictions about financial stocks the last year, the grave diggers have been especially busy. It began around a year ago when Bear Stearns began to plunge, and a famous currency trader from England put a few hundred million dollars into the stock. It was at about $120 at the time. Then, Bear fell to $100 in…
INVESTING: Woes of Fannie, Freddie overshadow bank calamity
Wall Street often is nothing more than a game of three-card monte, with the majority of players losing because they were looking at the wrong card. It is challenging enough to make money during bull markets. But during bear markets, the distractions and traps are everywhere, and they are lethal. There is a big distraction right now that is masking what could be the falling domino that sends everything else toppling over. The disaster of the month is the near-collapse…
INVESTING: Don’t let down guard; bear market rages on
“As for the longer term, if these investment banks are experiencing this kind of pain in what is really not that turbulent of times, just wait a year. As I mentioned a few weeks ago, the seeds of the next bear market have been planted. It could take a while for the seeds to get going, but when they do, watch out!” I wrote the paragraph above on Aug. 13, 2007. The investment banks have been hammered since, and, as…
INVESTING: It’s time to put together list of stocks to purchase
I’m sure you’ve noticed by now that the stock market is having a few problems. Your statements are getting a little harder to open, and it’s a little more difficult to stay interested in potential investments. I hear from some people, though, who haven’t lost all of their money yet, and they want to know what and when they should buy. My answer is the same as it has been since late September: nothing and not yet. But at this…
INVESTING: Betting against the crowd is a good way to invest
It’s time for a gut check on sentiment. In the stock market, sentiment is a contrary indicator, meaning that if everyone thinks the same thing (such as oil is going to $200 a barrel soon), your safer bet is to go the other way. Wall Street history is loaded with juicy examples of this theory at work. One of my favorites is Time magazine’s making Jeff Bezos, the CEO of Amazon, Man of the Year in 1999, right before the…
INVESTING: It’s time to sift through the retail bargain bin
Anyone who knows me will agree with what I am about to say. I am not a trendy guy. Fashion escapes me. If you see me on the street, you won’t think I am caught in some kind of time warp, but I don’t rush out and buy the latest fad. That explains why, for my 13 years in this business, I have generally stayed away from retail-related stocks. Even so, I know some people make a lot of money…
INVESTING: Political shift could turn ethanol boom into bust
If the price of corn keeps going higher, the best investment any of us could make would be to turn our lawns into cornfields. Before we do that, though, we would need to buy farm equipment and fertilizer to get the field ready. After we grow the stuff, we would have to transport it to a processing plant and turn it into ethanol. Then, we would need to ship the ethanol to the refinery where it would get mixed in…
INVESTING: Don’t believe the optimists who say worst is behind us
The Federal Reserve saved the day, right? That’s what everyone is telling me. The Bear Sterns bailout in the middle of March put the bottom on this market, and while it may not be sunny skies right away, the worst is without a doubt behind us. If the middle of March was the beginning of a bull market, then pigs really do fly! Sometimes the stock market takes on the tone of a battlefield. A lot of noise and confusion…
INVESTING: Diversifying in right way not as easy as it sounds
When you talk to your financial adviser and he tells you to diversify your investments, you are supposed to find ideas that do not move in direct sympathy with the stock market. In other words, put your money in non-correlated asset classes. The concept here is that, when one area of your portfolio is not doing well, another part is more than making up the slack. This whole program is wrapped up neatly in a cool term called modern portfolio…
INVESTING: Don’t turn bullish too fast on ravaged market sectors
British investor Joe Lewis (who is still a billionaire, although after you find out what happened to him, you will wonder how he has any money left) started buying stock in Bear Stearns back in August when it fell to $120 a share. When the stock fell to $110 in October, he bought more, to the tune of $300 million. In November, Bear fell to about $90, and Joe was at it again. All told, he bought $1 billion of…
INVESTING: Dear Fed boss Bernanke: Read this and take heed
I know you have a good heart. Evidence is beginning to mount, however, that we are sliding down a path we cannot easily climb back up. In the vernacular of my old hood, Ben you are killing us! The world is faced with two problems, massively slowing growth and accelerating inflation. You picked the slowing growth side to attack head on. You and your back-room cronies slashed interest rates from 5.25 percent in August to 3 percent now, with more…