Abby Joseph Cohen, chief equity strategist at Goldman Sachs, stopped by my office last week after a brief stint on CNBC. I took advantage of the opportunity and sat her down for a good, oldfashioned interview. This is a rare treat, so let’s enjoy, tongue planted firmly in cheek. HAUKE: Abby, thank you for paying us a visit. You have climbed to the peak of Wall Street and it is an honor to speak with you. COHEN: Well, I am…
I don’t like to shop. I do know, however, that I am in the tiny minority in this regard. We’ve elevated shopping in this country to a level that probably ranks higher in importance than family, religion and health. The American consumer is such a force that we make up 20 percent of global GDP. That’s right, for the entire world! I should think, then, that slowdowns announced by companies like Wal-Mart and Target would be headline news. Of all…
Analysts are once again telling us the S&P 500 will post double-digit earnings growth, continuing a streak from early 2003. And I am going to continue with a theme I’ve been bringing up here lately: If earnings are up double digits for the last few years, why isn’t the stock market following suit? Waiting for the earnings, then making an investment decision, will never give you the returns you want. The last time the S&P 500 was up double digits…
Our culture is easily distracted. Shiny things grab our attention. Gold’s luster doesn’t change, but our perception of the shine apparently does. After gold suffered for 20 years in a protracted bear market, we became mesmerized by the stuff, running the price from $250 an ounce to $730 in seven years. I guess when we do decide to focus, we really turn up the heat. But then gold in late spring suffered a sharp 25-percent correction in only four weeks….
We love a good conspiracy in America. The FBI just spent millions of dollars looking for Jimmy Hoffa again, and again came up empty. We’ll be talking about who killed JFK until our grandkids are gone. Today, I am going to start a new one, and when you read this you are going to want your finance professor’s head on a platter. There is a conspiracy to keep you from making money. I can’t pinpoint the exact beginning of the…
When an unexpected disaster strikes, people look for answers. They want to know how much of what they had before is left. It takes a while for the shock to wear off, but as heads slowly clear up, a lot of reassessment takes place. The global meltdown in May in securities markets apparently hit most investors, retail and professional alike, like a misguided sledgehammer to the back of the head. Readers of this column were kept wellinformed of the approaching…
In early May, I wrote this about home-builder stocks: “They failed to break out of their August highs, however, and they have been struggling ever since. This is a textbook example of when the best risk/reward ratio presents itself for shorting.” Using the home-builder exchange-traded fund XHB and selling it short yielded a one-month gain of 18.3 percent. Not bad! If home-building stocks are crushed, what does that say about the real estate market in general? Here are a few…
If you open an account at a brokerage firm and deposit $100, you can sign a margin agreement and borrow enough money from that broker to buy $200 worth of stock. For years, market watchers analyzed the margin interest on the New York Stock Exchange-which measures how much stock people are buying using margin-as a reliable indicator of overbought or oversold conditions. Things have changed today, though, and that could have a serious effect on your portfolio. NYSE margin information…
Treasury Secretary John Snow resigned recently, and President Bush picked Goldman Sachs CEO Henry Paulson to replace him. When Snow took the job, there was rampant talk that he favored a weak dollar policy, and the same buzz is now surrounding Paulson. I am not sure the talk is warranted, but I know a weak dollar policy is insane. John Snow’s official line on the dollar has been to let the market work it out. He accused China of intentionally…
People love suspense. A little uncertainty creates excitement and holds people’s interest. This is true to some degree with investors in the stock market, despite the claim from experts that investors despise uncertainty (as if you can be really sure about something as crazy as the stock market). Success in the stock market is all about probabilities, and having the fortitude to live with a lot of mistakes. In December, I wrote that I did not think 2006 was going…
There is a simple and often-underestimated tool used by technical analysts that even the most timestrapped investor can profit from. The trend line is an old utility technicians have believed in for centuries. Everyone has heard the term, “The trend is your friend.” In order to visualize the trend, all you have to do is get a chart of any stock or index, and start drawing lines connecting highs or lows of prices. Hold the page back a little, and…
The theme I’ve been concentrating on-the Dow Jones industrial average’s climb toward a new all-time high at the same time large numbers of stocks are weakening-is playing out in dramatic fashion. The Dow is only 150 points away from a new high, and it may well reach it. What’s working is obvious now (energy, metals, industrials), and I say, ‘Stay with them until they break down.’ But there is a growing portion of the market that is giving people fits,…
We all want more energy. Every time we go to the grocery store, we get bombarded with rows of new energy drinks. Health professionals are telling us things we can do to increase our energy. And we don’t just want more of it for our bodies. Our SUVs need more. Our homes need more. And China needs more. The delicate problem we’ve helped develop has in large part been created by rising demand for energy in places like China and…
On Saturday mornings when I was a kid, I watched the “Superheroes” cartoon and I soaked up all its greatness. Superman, Aquaman, The Green Lantern, the whole crew. And sometimes, my heroes had to battle a group of bad guys who were evil opposites of themselves. It was like some kind of twisted alter-ego thing. I wonder if the executives atop the favorite tech companies of 1999 are feeling like Superman when he had to fight his evil twin Bizarro….
One of the nice things about modern car design is the gas light. You start running low, a light pops on to tell you to fill up. Ignoring this light can prove a little dangerous. As you get closer to empty, you know the car can keep going, but you don’t know for how long. And you don’t know where you will be when it runs out. The stock market acts a lot like your car, with one major difference….
If you have yourself in a lather about rising inflation, maybe I can offer a little relief. You can work your rosary beads over a lot of things, but runaway inflation is not one of them. There’s a little twist here, though. And it’s one that will add a challenge to your long-term strategy. According to our federal government, inflation, as measured by the consumer price index, has not been much of a problem. Excluding food and energy, prices are…
It’s been a while. When it goes this long, I like to pick up my head and look around. My “Spidey” senses are telling me there might be some danger lurking nearby. But when it stretches out like this, there could also be opportunity. The stock market has now gone almost six months without suffering a correction of more than 3.5 percent. Some people would say that is not unusual considering we are nearing the end of the traditionally strong…
You want to build your house on a strong foundation. It worked for the third little pig that resisted all the efforts of the big bad wolf. It’s also going to work for savvy consumers who avoid too much debt and build decent equity in their homes. For everyone else, though, the foundation might feel as if it is shaking a bit. A slew of recent data on the housing industry seems to confirm what the housing stocks have been…
The stock market did a great job in January of getting investors to focus on the energy sector when they should have been looking at the good, old-fashioned Dow Jones industrial average. In the last two months, energy stocks have become serious dogs, and the Dow has posted a series of five-year highs. They don’t ring a bell, folks. This stuff just kind of creeps up on you. The market prefers subtlety. It rewards hard work, patience and the willingness…
People don’t seem to spend as much time talking about high oil costs today as they did a year ago. Perhaps we’ve gotten used to them. Maybe the negative effects will be felt later. But one thing seems obvious: Energy stocks have recorded at least a short-term top. Let’s see what happens next. The incredible rise in oil over the last three years has turned up the volume in the debate over solutions. Washington passed an energy bill last summer,…
