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Eric Linser, CFA | Mar. 2, 2011
Answer: Political protests!
While each participant has different political agendas, the commonality I see is contagion, or the spread of unrest.
In the Mid-West, particularly Wisconsin, a battle rages over public sector finances. Elected officials are pushing to eliminate or weaken collective bargaining by government employees' unions with the more ...
Eric Linser, CFA | October 4, 2010
Wow! What a month; the 2nd best September for the S&P ever, and the best in 72 years. September brought investors a long awaited rally in the markets and bucked the trend in what is generally the weakest month of the year for stocks. The market rallied right from the start, brushing aside any poor economic readings and boosting hopes that our economy may finally be headed to stability. If there is one thing more ...
September ain't all that bad
Eric Linser, CFA | Sept. 17, 2010
Who would have guessed it? By mid-September, we're on a bit of a bull market rally, especially on some really mediocre economic news. Investors have looked past the bad news to keep the markets pressing higher. It's been just good enough to keep us from falling below 10,000 on the Dow, and for us to push above the 200 day moving averages (key support and resistance levels) for both the more ...
Eric Linser, CFA | September 1, 2010
September marks the beginning of fall and with it, college football and the local apple and grape harvests -- things I look forward to. And, here in the Bay Area summer is just beginning as the rest of the country transitions to fall's cooler weather.
Really the only thing I don't look forward to is that September has been a particularly difficult month, historically, for the stock market. And more ...
Eric Linser, CFA | Aug. 9, 2010
Last Friday, August 6th, we received July's jobs report from the Bureau of Labor Statistics (BLS) which solidified investor fear and drove many from the market on Friday. However, despite mixed economic reports and recovery concerns, the markets managed to build on their recent gains in July. The Dow Jones Industrial Average rose 1.8% for the week, the S&P 500 added 1.8% and the Nasdaq gained 1.5%.
more ...
Eric Linser, CFA | July 8, 2010
As we enter the 2nd half of the year, optimism that greeted the year has evaporated and investors around the world are questioning the strength of the economic recovery. European sovereign debt troubles that have surfaced have now clouded views on the sustainability of global economic growth.
So what's going on? It's not just one thing, it's an accumulation of them. Fears of a second recession (double dip) are more ...
Eric Linser, CFA | June 4, 2010
The Leak Continues, Job Numbers Disappoint
Along the California coast, Memorial Day doesn't mark the beginning of hot weather but a long bout of foggy days ahead. In my home of San Francisco, it marks the beginning of Mark Twain's winter (as in, "The coldest winter I ever spent was summer in San Francisco.") Similarly, the fog has been so dense that visibility to the market's future direction has been more ...
Sell in May and Go Away (until St. Leger's Day)
Eric Linser, CFA | May 10, 2010
Or as I remember it some years ago, Sell in May and Go Away; Come November, Here to Stay. No matter how it's phrased, the adage seems to be ringing true this year. Could a simple calendar event be just that easy? (FYI - St. Leger's Day is a horse race held in England in mid-September)
It's based on the notion that the more ...
1 year anniversary of the market bottom, & the sustainability of the market's rally is addressed
Eric Linser, CFA | March 6, 2010
Happy Anniversary! If this is the Year of the Golden Tiger (not Woods!) then last year was the Year of the Bull. We should pop open the Champagne because we are a year past the market more ...
Eric Linser, CFA | March 3, 2010
(an article on the US stock market and technology shares)
February Marks Markets' Best Month Since November
The Dow Jones Industrial Average ended up 2.6% for February, the Nasdaq added 4.2% for the month and the S&P 500 gained 2.9%. The S&P 500 gain for February put a dent in its 3.7% January decline. Eight of the ten sectors were up for the month, with Consumer Discretionary leading the group more ...
Phil Diamond, CFA | March 1, 2010
Consumer Confidence swooned in February from January. The drop from 56.5 to 46 was far sharper than economists were expecting. The drop was largely due to changing attitudes about the jobs market and the pace of economic improvement according to the Conference Board. Not to editorialize (but we will), the people they interviewed to reach this conclusion must more ...
Eric Linser, CFA | Feb. 4, 2010
(an article on the US stock market and technology shares)
It was not the kind of start to the New Year for which investors were hoping. In January, a winter chill settled over the markets and we had our first major sell-off since the "reflective" rebound in stocks in March 2009. The major indexes and many asset classes ended the month lower.
Despite the Federal Reserve's confidence in the recovery, more ...
Eric Linser, CFA | Jan. 26, 2010
(Reprint of Jan. 26, 2010 E-Newsletter)
Dear Investor:
This past week's market action was like riding a see-saw. We go way up...then way down. However, unlike an actual see-saw, it wasn't much fun for investors. There was concern about China reigning in their bank lending so that their property markets don't overheat (and that's a bad thing?) Note: don't more ...
Eric Linser, CFA | Jan. 25, 2010
It is the time of year when market pundits offer predictions for how the coming year will pan out. Such forecasts should always be taken with large grain of salt, given the dynamic nature of markets and the inherent unpredictability of the future. Moreover, successful investing requires flexibility, humility and openness to a range of possible outcomes. This mindset is particularly important in the present environment, given more ...
Eric Linser, CFA | Jan. 12, 2010
(an article on the US stock market and technology shares)
Welcome to the New Year (two thousand ten, or twenty-ten?). As we quickly look back on last month and last year and look ahead to January, we believe the main focus of the market for the month will be 4th quarter earnings reports (starting this week) and corporate guidance given for the year ahead. Quite often the market softens in the weeks preceding the more ...
Eric Linser, CFA | Dec. 22, 2009
There has been a lot of mention of the phrase "the New Normal" so I thought I'd define it, and discuss the ramifications and opportunities that such a philosophy represents.
We have just witnessed, and hopefully survived, the worst financial crisis since the Great Depression and the ensuing more ...
Eric Linser, CFA | Dec. 2, 2009
November was another good month for the markets (since the bottom in March), continuing a series of positive months, save one -- October -- which was a slightly down month. Despite the recent drop Thanksgiving week, the stock market ended the month of November with big gains. Major stock indexes were up more than 5%, the best monthly performance since July. The S&P 500 increased 5.7% and the Nasdaq more ...
More than one way to grow earnings
Phil Diamond, CFA | Nov. 2, 2009
"It's operating leverage, stupid!" There are more ways to grow earnings than growing revenues.
We are getting quite tired of hearing again and again that it isn't sound growth if it isn't based on revenue growth. Well, we all like to see revenues growing, but sometimes that isn't an option and growing the bottom line can happen even when the top line isn't growing as fast more ...
recovery, interest rates, inflation, Muni bonds, global perspective & more
Eric Linser, CFA | Sept. 21, 2009
Here is our monthly perspective on events and trends affecting the economy, the financial markets, and investment management. First, let's take a look at an interesting chart and commentary from Morgan Stanley's chief European market strategist, Mr. Teun Draaisma, as to how much further the stock market could rally. We'll take a more ...
Phil Diamond, CFA | Sept. 14, 2009
Let's talk math, statistics to be more precise. The differential (some folks think of it as the second differential and if that is how it makes sense to you, go right ahead) is the change in the rate of change. If you were cruising down the highway at 70 and all of a sudden you pull off the road into a gas station, your differential speed is very negative (you were going 70, now it feels like 20). When you tear out of more ...
Phil Diamond, CFA | Aug. 17, 2009
It was 27 years ago last week that the market hit its bottom in the 1981-1982 bear market. That market had seen stock prices fall to rock bottom valuations and yet, no one wanted to own stocks that summer. To think, Philip Morris at 6 times earnings and yielding 8%. The environment then was horrendous. Interest rates on long-term Treasury bonds were still at 12%, down from 15% in late 1981. The prime rate had fallen to 17% more ...
Did you follow Warren Buffett's advice last year to buy American stocks? In that now famous October 17, 2008 Op-Ed piece in the New York Times, Buffet shared his simple rule for buying stocks: "Be fearful when others are greedy, and be greedy when others are fearful." Certainly at that time fear had gripped the markets and investors were fleeing equities into cash.
Well if you did buy at that time, then you are one of the few, the proud, and the bold value more ...
Eric Linser, CFA | July 28, 2009
That is a good question, and in a similar vein it is like asking if Santa is for real. Well...kind of. Christmas is a time of gift giving, and the market rebound has offered us some gifts as well. It now appears that we have moved away from the Armageddon scenario of last year, and are rebuilding, be it ever so slowly. With the markets on the right trajectory as of recent, it seems safe to come out of our bunkers again. The rocky more ...
Eric Linser, CFA | June 15, 2009
With the markets on the right trajectory as of recent, it seems safe to come out of our bunkers again. The rocky start to the year has revealed an almost unprecedented opportunity for investors -- a chance for a fresh start to 2009. After an abysmal start in January and February, March, April and May have rewarded investors with a nice sustained 3-month rally which has brought us back to being flat to up for the year. Just as the more ...
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