Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
This is simply not true. Low interest rates (money printing) forces investors into stocks, bidding up prices. Couple this with the fact that central banks are actually buying stocks now.
A Continually Rising Yen: Reductio Ad Absurdum [View article]
I've been trading forex for a number of years and while fundamentals may matter over the very long-term, they rarely do in the short to medium term. What most analysis seems to miss is the tremendous speculative interest in the currency markets. Hedge fund favorite AUD/JPY is a good example of how this plays out. The herd gets on board, momentum builds, then everyone rushes to get out at the same time hence the epic unwinds we see in the yen pairs. The yen appears to be getting stronger, but it's only the temporary effect of massive money flows. I'm short the AUD/JPY here, looking to cover and go long in the mid 90's.
Starbucks' Bottomless Cup Of Profits, Drink Up [View article]
I can totally understand your valuation concerns. Interesting food for thought, I recently started using Chuck Carnevale's Fast Graphs which calculates an average P/E across many years and going all the back to 1993, Starbucks average is 41.2! Of course it was a young upstart for a number of those years but if we look at just the last 10 years, it's 31.7. Bottom line, investors continue to pay a premium for Starbucks. One day it will trade at a 20 multiple, but I think we're going to need an epic correction to get there. After all, no growth companies like JNJ are trading over 20 at the moment. Gotta love the markets.
5 Undervalued Dividend Stocks With Strong Profitability [View article]
STO is ridiculously undervalued. I generally avoid energy but it's tempting. And I keep thinking the market must know something we don't. Why so cheap?!
4 Medical Device Companies, 4 Completely Different Stories [View article]
After reviewing the returns on equity and margin situations at both IEX and VAR, it's beyond me how you could recommend the former over the latter. There may be less business risk in IEX but what good is a diversified business model if you can't hold the line on margins? I'd rather do one thing and do it well - VAR's ROE is dynamite, averaging in the mid 20's for over a decade. High barriers to entry. Secular trend (rising cancer rates). Long VAR.
Expeditors International: An Attractive Idea For A Richly Valued Market - Part II [View article]
I maintain a wish list of my favorite stocks (high ROE, strong cash flows) and sort by valuation (dcf) whenever I have money to put to work. EXPD currently tops the list! Good call, buying this week.
Apple 5-Year Price Target: A Grand And Then Some [View article]
They're not directly proportional but they are related. Book value grows faster than ROE due to the compounding effect of reinvested earnings on the equity base.
Apple 5-Year Price Target: A Grand And Then Some [View article]
"If I own a $1000 30-year bond and I don't sell it then at the end of the year I get $34.00. If I own $1000 of AAPL stock and I don't sell it then at the end of the year I get zero. Earnings Yield you do not get to keep. Bond yield you do get to keep."
This is true but that's the nature of an equity investment vs. debt.
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
Your faith in the central planners is shared by many, it's why the fiat system has survived this long and has been revived time and time again throughout history. When new money is made available to the system, it eventually manifests in the economy in the form of debt (a bank loans it out). This is now someone's liability as is the interest. How do you "unprint" this? You can't. It has to paid off or defaulted on. You'll read any number of technical analyses on repo operations and other tricks to keep things balanced but frankly, none of it makes much sense to me (perhaps I'm too dense to see the beauty of the design).
Psychology is key. Fiat currencies can't be destroyed but confidence can. Just the fact that something which is supposed be a store of value can be "printed" and "unprinted," this in and of itself should not be comforting to anyone with the ability to think it through and not rationalize away the implications. Once confidence is lost, the fed's printing or lack thereof won't mean much either way. That's the fiat endgame.
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
We agree, the question is, which one wins the race to the bottom? Unfortunately I think given the dollar's unique status, when confidence is lost there, it will be the shot heard round the world.
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
My feeling is that there's too much focus on inflation. Though loss of purchasing power is clearly evident when you compare prices in the seventies to prices today, the dollar and fiat money in general creates all kinds of malinvestment. Nowhere is this more clear than with the too big to fail banks who failed to see leverage was a problem. Perhaps because they knew infinite dollars were available to patch up any holes in their balance sheets? This gets into moral hazard and a more lengthy discussion, but my problem is as much with the fractional reserve lending system as it is with the dollar. I simply don't believe you can combine 30x leverage and an infinite supply of cash and get something sensible or stable.
Food Stock Dividends: A Play Pending European Collapse [View article]
deedubs is right on General Mills, dividend was frozen at the beginning of the millenium (but never reduced) and has been increased every year since 2004.
Hi Doc, glad your Raisin Bran provides you such a moving expererience! ;) I was just reading an article on morningstar about consumer defensive stocks and they too chose kellogg over general mills. GIS's price returns are actually very impressive - it's traded off a low of $23 in 2009 to its current level approaching $40 and has returned 10% annually over a 5 year period. Then again, if you're a fan of Kellogg's products, you should always go with what you know.
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
http://bit.ly/13xBxmc
A Continually Rising Yen: Reductio Ad Absurdum [View article]
Starbucks' Bottomless Cup Of Profits, Drink Up [View article]
5 Undervalued Dividend Stocks With Strong Profitability [View article]
4 Medical Device Companies, 4 Completely Different Stories [View article]
Expeditors International: An Attractive Idea For A Richly Valued Market - Part II [View article]
Apple 5-Year Price Target: A Grand And Then Some [View article]
Apple 5-Year Price Target: A Grand And Then Some [View article]
This is true but that's the nature of an equity investment vs. debt.
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
Ben Bernanke, is that you??
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
Psychology is key. Fiat currencies can't be destroyed but confidence can. Just the fact that something which is supposed be a store of value can be "printed" and "unprinted," this in and of itself should not be comforting to anyone with the ability to think it through and not rationalize away the implications. Once confidence is lost, the fed's printing or lack thereof won't mean much either way. That's the fiat endgame.
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
The Rogue Dollar And Why A Collapse Is Inevitable [View article]
Food Stock Dividends: A Play Pending European Collapse [View article]
Is Kellogg 'Great,' Or Just OK? [View article]