Investing Blog

The SEC is finally giving some input on the practice of naked short selling but only in the realm of some desperate financial companies. The rest of the market is still available to short to the death as often happens with small cap stocks.

Naked shorting is selling shares before it is known that any shares can be bought back. Often this is done well past the companies float and to such an extent that share prices simple have to drop. The downward pressure that billion dollar firms can put on shares with naked shorts is tremendous, the SEC should jump in and stop this practice now. Continue Reading »

The talk of inflation has never been this high. Bernanke and company are trying very hard to keep the markets up while keeping inflation lower than the key 3%, doing so is problematic. Trying to infuse billions of dollars without making prices rise universally is against the laws of economics. So far, that extra cash has only been seen in products high in demand: sugar, corn, oil, gold, silver. Continue Reading »

It was interesting to look over the newswire today and see that Barack Obama is speaking out against oil speculation and threatening to tighten “loopholes” in the oil trading industry that keep the government from investigating the effects of speculation. The market to Senator Obama: speculation is just a natural part of the business cycle. Continue Reading »

America as a whole has had a long disagreement with CEO pay, amongst a wide array of other high paid members of society. The baseball player, the entertainer, and the corporate executive, the million dollar a year salaries are abound and even higher in 2007. With the economy lagging, businesses failing, and severance pay higher than ever for failed CEOs, is America justified with its hatred for the corporate elite? Continue Reading »

January to March quarter posted a 0.9% gain in GDP, giving investors the fundamental understanding that textbook recession is out of the picture. It was certain that investors would respond favorably, and they did. The dow was up 52 points to 12,646. This kind of optimism is great for a market that’s been beaten down by high commodity prices and a slowing economy.
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As the market livens up, it should be obvious to investors that the scams of the market are plentiful as well. Though the pump and dump nearly died at the beginning of the internet age, today these schemes are still doing quite well.

The pump and dump scheme is centered around two major contributors: pure speculation and illiquid stocks. Pump and dump operators never pick stocks with high volume, they instead look to find low volume stocks that can be pushed up in value on more buying volume. More people interested in buying a stock means that through competition they slowly push up the bid and ask prices. Continue Reading »

I don’t think anything shines as bright as the movie theater as a perfect example of the amount of disposable income in the hands of people. The audiences are largely made up of young adults who earn less than older movie-goers but have less financial responsibilities thus rarely cut back on their spending when the economy slows. Older viewers are more likely to cut back on their entertainment expenses and likely put less money in the hands of their children to go see the new hot thriller.
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In this wild and unpredictable market, the forest for the trees approach of taking investments in sectors rather than individual stocks is certainly showing its strength. The up and down markets of today can be ridden out with this approach that not only have logical appeal, but plenty of evidence to back it up. Quite frankly, individual investors are horrible at picking individual stocks and would instead get the same return from investing in the sector rather than the company. Continue Reading »

Industrial output dropped again for the second time in 3 months down .7% from last month. Industrial goods are the lifeblood of the economy. Industry that creates products generates wealth and maintains a healthy cycle. Manufacturing dropped even more with a .8% drop from a month ago.

Wealth is created from generating more revenue than is needed to complete a good. In the case of automotive, Toyota buys $10,000 worth of parts that are merely paperweights until assembled. At that point it becomes a $15,000 car that generates wealth of $5,000. The customer gets a necessity, the producer gets a hefty profit. The net result is the creation of wealth which can only happen when a good is produced for more than it costs. Continue Reading »

The long term trend is definite. The big bankers are largely dependent on central banks to back up their own poor investments with bailouts and other solutions such as liquidity loans and collateral for treasury transactions. While these decisions ultimately hurt the taxpayer, this kind of benefit has been particularly beneficial to the big bankers. Small and regional banks are unlikely to receive any credit or help from the Federal Reserve though large banks readily get huge handouts for the greater good of the people. Continue Reading »

Now that the dollar is its cheapest in quite some time, 50% discount to the Euro in just 5 years, there is some great room for foreign companies to start the buying spree. The market slowdown and minor correction is likely to start off the investment from foreign investors. Stocks, by price earnings multiple are the cheapest in years, a lower dollar makes that proposition even better for overseas investment.

Iran finally stopped selling oil in dollars, which will further lower the demand for greenbacks and as a result, their value on the open markets. The Japanese buy a considerable amount of their oil from Iran, and are now contracting to buy oil in yen rather than USD. While Japan has been buying up a large portion of US debt and dollars, the buying will likely slow or stop as they have no need outside the realm of oil. This leads me to think that Japanese buying in the US markets will explode. The US dollar reserves of Japan will likely turn to US securities, as the dollar buys little else around the world. Continue Reading »

Poor timing, too low price points? No, it appears that Yahoo might be avoiding a Microsoft buyout solely for sentimental reasons. Now that Jerry Yang is the CEO, it appears he’s wanting to hold onto the company he worked so hard to start back in his own college years at Stanford.

Yang owns about 4% of the company that is currently worth $1.5 Billion, his stakes are huge and he’s still drawing the infamous $1 salary that is common with many tech giants. His wealth has been derived in its entirety from the growth and capital gains he’s received as a huge shareholder in Yahoo. As CEO and a founder, it seems that his own unwillingness to sell might lay in a dislike for Microsoft and sentimental views of Microsoft rather than what shareholders want. Continue Reading »

Oil prices are sure to affect more than just the casual commuter. The price of oil is so high now that the price of goods are following. Very few items that are sold in stores are local, most must be shipped around the country and around the world before making it to the aisle of your favorite supermarket. Today, the price of oil can affect everything from commodity prices, the cost to fly to a vacation spot, or the price of millions of goods made with oil such as plastics. Continue Reading »

The jobless report was released today which shows the amount of new people currently seeking unemployment benefits. This month showed a jump of 38,000 people to 407,000 people. Remember that this statistic is for the amount of NEW people, not an accumulation of people over the course of the year. This is 407,000 people who have lost a job in the last month. Just a year ago the stats showed just 319,000 people seeking unemployment benefits, a near 30% increase year over year. Continue Reading »

Durable goods orders were down 1.7% last month. Ouch. Durable goods are things like appliances, your stove, your washer dryer etc. This might be due to great weather stateside, but I doubt that people still hang their laundry on clotheslines. Continue Reading »

Ford Motors has been going down the tubes only to benefit Tata motors, the equivalent of Toyota to developing nations. The American automakers struggle with Unions and pension plans has forced Ford to sell the Jaguar brand and Land Rover to Tata motors for just $2.3 Billion, less than half the $5.2 Billion that Ford paid for both brands. Continue Reading »

The $155 Billion economic stimulus package checks will start coming out in full swing starting in May. Its time to prepare for record quarterly earnings this year, more specifically this quarter. The industries most likely to benefit are those that are associated with financing and down payments. It is likely that automobile manufacturers, home improvement stores and large appliance vendors will do particularly well. Continue Reading »

Commodity prices have been soaring all around, but the recent movement in wheat prices is really shaking the market. Since the beginning of the year, Wheat has nearly doubled to its highs in the twenties. A weak dollar, demand for ethanol and emerging markets around the world are putting the strain on natural resources. Continue Reading »

As the baby boomer generation starts hitting retirement age not only are they going to put a drain on social programs, the new worry is that they might drain wall street. Continue Reading »

Stocks are looking for corrections so get in and profit take as much as you can for this week. Look for incredible value as stocks take a dive and make intra-day plays on the come up every day. The market numbers are setting in and stock are taking note of it. Expect more stock corrections with underperforming stocks on the rise. This was expected so the best play is intra-day trading, do not go long. Continue Reading »

After a week of higher than expected job growth and the market reaching all time highs here is what to expect for the coming week, Oct. 8-12. Continue Reading »

Pepsi is getting a new CEO that was ranked number 11 on Fortune’s most powerful women list. Indra Nooyi who is currently the CFO of Pepsi will be in the CEO helm come October. Continue Reading »

This past week we have been getting earnings from oil companies. Some are great others are so so, but here is a list of what is in thus far. Continue Reading »

Have you ever wanted to get in on the commodities market but your have no idea where to invest or how? You can now with a few new ETF’s that are commodity driven. From this you can get in the oil, gold, corn, beans, and other commodities that you read and hear about. Continue Reading »

HCA Inc. took the Dow over 180 points as it reached 11,051 for trading on Monday. I imagine this will be short lived, but it shows with a positive upbeat the Dow will jump forward. I think the Dow is under priced and has wonderful chance of breaking records this year, but the news of the world and energy drives the markets down. Continue Reading »