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The Financial Lexicon

 
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  • McDonald's: 'It's A Treasury Equivalent'
    Wed, Oct. 22 MCD 13 Comments

    Summary

    • Jim Cramer compared McDonald's stock to a Treasury.
    • There are several reasons he is wrong.
    • Income alone is not a prudent way to evaluate the safety of an investment.
  • Who's Afraid Of The Big Bad Deflation?
    Sat, Oct. 18 JCP, SPY, DIA 103 Comments

    Summary

    • Falling oil prices are making some people question whether deflation is on the horizon.
    • There are several reasons often cited for why we should all want to avoid deflation.
    • Those reasons don't hold a lot of weight in today's reality.
  • QE Forever Is What Stocks Want
    Thu, Oct. 16 SPY 79 Comments

    Summary

    • Investors can thank the Fed for Thursday morning's big bounce.
    • How can value investors trust that their analysis holds long-term weight when QE is propping up stocks.
    • The longer the Fed postpones ending QE and raising rates, the worse the selloff will be when those things eventually happen.
  • As Yields Plunge, Are You Focused On The Wrong Thing?
    Wed, Oct. 15 SPY, DIA, QQQ 6 Comments

    Summary

    • I've recently come across several articles referencing the Fed's dot plot as a reason to expect higher interest rates in the near future.
    • The Fed has a poor history of predicting when it will hike rates.
    • Investors should not rely on the Fed's dot plot as an accurate gauge for predicting interest-rate movements.
  • One Thing Stock Market Investors Need To Understand
    Wed, Oct. 15 DIA, EEM, EFA 3 Comments

    Summary

    • At the end of bull markets there are value traps galore.
    • Earnings estimates take time to catch up to prices.
    • Serious investors must consider the possibility that a bear market has commenced.
  • Equity Investors: Now Is The Time For Patience
    Tue, Oct. 14 SPY, DIA, SH 8 Comments

    Summary

    • In the post-financial-crisis world, the stock market hasn't performed well without QE.
    • San Francisco Fed head John Williams indicated he'd be open to more QE if the economic outlook changes "significantly".
    • For a variety of reasons, it's time to be patient.
  • Commodities And The Dollar: This Chart Says It All
    Mon, Oct. 13 DBC 3 Comments

    Summary

    • After the price declines of recent months, investors may be tempted to try to pick a bottom in commodities.
    • Before buying commodities, there's a chart you need to see.
    • Gold isn't the only commodity that seems to have an anti-dollar component to its pricing.
  • USO Versus USL: The Best Way To Buy Oil
    Mon, Oct. 13 USO, USL 1 Comment

    Summary

    • Two ETFs that track WTI light, sweet crude oil are USO and USL.
    • Just because USO is the more popular of the two doesn't mean it's always the better one to own.
    • Depending on a variety of scenarios, USL may be preferable to USO.
  • HYLD - A High-Yield Bond ETF With A Twist
    Thu, Oct. 9 HYLD 25 Comments

    Summary

    • Read a fund's prospectus before you buy it.
    • HYLD is known as a high-yield bond ETF.
    • There's something many investors may not know about this "bond" ETF.
  • Something You Need To Know About These Commodity ETFs
    Wed, Oct. 8 CORN, SOYB, WEAT 7 Comments

    Summary

    • CORN, SOYB, and WEAT are three ETFs that track the futures prices of corn, soybeans, and wheat.
    • For long-term investors, fund expenses are an important consideration.
    • The expense ratios in CORN, SOYB, and WEAT are very high, making them more suitable for trading rather than owning over the long term.
  • Bond ETF Data You'll Want To Bookmark
    Wed, Oct. 8 HYLD, JNK, HYG 4 Comments

    Summary

    • There are all sorts of considerations to keep in mind when purchasing a bond fund.
    • One such consideration is the trailing-12-month distributions of a fund, which helps investors track how a fund's yield behaved over time.
    • Bond fund prices, yields, and distributions may be too unpredictable for many income-focused investors.
  • It's Time To Sell Hewlett-Packard Bonds
    Editors' Pick • Tue, Oct. 7 HPQ 1 Comment

    Summary

    • Hewlett-Packard announced plans to split the company into two.
    • The press release did not include details about how it will divide its debt and cash.
    • It's time to sell Hewlett-Packard bonds.
  • Is Ben Bernanke Really 'Betting On Higher Interest Rates'?
    Tue, Oct. 7 AGG, LQD, HYG 9 Comments

    Summary

    • A recent article claims Ben Bernanke is "betting on higher interest rates".
    • Nothing I can find in the press supports the idea that Bernanke is "betting on higher interest rates".
    • When was the last time you heard of a "bubble" popping in an asset class in which most everyone is bearish?
  • Here's What's Wrong With HYG
    Editors' Pick • Mon, Oct. 6 HYG 12 Comments

    Summary

    • I have three strict requirements for investing in bonds.
    • HYG has experienced periods of falling prices and falling yields-on-cost.
    • For me to feel comfortable investing in HYG, it would require significantly lower prices.
  • 4 Reasons The Jobs Report Stinks
    Fri, Oct. 3 SPY, QQQ, DIA 137 Comments

    Summary

    • The headline numbers in the latest employment report look good.
    • The headline numbers don't tell the whole story.
    • There are four reasons the latest employment report stinks.
  • S&P 500 Earnings Data You'll Want To Bookmark
    Sat, May. 17 SPY 11 Comments

    Summary

    • Retail investors don’t always have access to information that institutional investors can access in the blink of an eye.
    • S&P 500 earnings information can be a useful tool when forming an opinion about the markets.
    • This article provides 20 years of historical S&P 500 earnings data as well as recent forward projections.
  • Verizon's Stock Is No Longer A 'Bond Substitute'
    Wed, Mar. 12 VZ 11 Comments

    Summary

    • Buying certain stocks as “bond substitutes” has been a fashionable trend in recent years.
    • A new emerging trend toward issuing 20-year bonds offers a happy medium between the low yields associated with 10-year debt and the extremely long maturities associated with 30-year debt.
    • Higher bond yields and a new 20-year bond make Verizon’s stock less appealing as a bond substitute.
  • Petrobras - Up To 7.25% Yields From This Energy Giant
    Tue, Mar. 11 PBR 10 Comments

    Summary

    • Despite today’s low-interest-rate environment, the bond market still provides occasional opportunities.
    • Petrobras has a new six-part bond offering with yields up to 7.25%.
    • I think the 10-year notes are the most attractive part of the offering.
  • These Charts Speak Louder Than Words
    Sat, Feb. 15 SPY, QQQ, DIA 48 Comments
  • One Thing You Didn't Know About The Latest Jobs Report
    Fri, Feb. 7 SPY, QQQ, DIA 9 Comments
  • Unconventional Thoughts On Best Buy
    Tue, Jan. 28 BBY 12 Comments
  • Adding Perspective On The Stock Market Sell-Off
    Sat, Jan. 25 DIA, EEM, IWM 12 Comments
  • Buy Target While It's In The Penalty Box
    Wed, Jan. 22 TGT 24 Comments
  • High-Yielding Preferred Stocks Start 2014 With A Bang
    Wed, Jan. 15 DLR, KIM, O 8 Comments
  • 3 Things Every Stock Market Investor Should Consider
    Fri, Jan. 3 SPY, SH, SSO 1 Comment
  • The Financial Lexicon Positions For 2014: Individual Bonds Are The Way To Go
    Editors' Pick • Dec. 20, 2013 DIA, IVV, HYD 7 Comments
  • Toll Brothers Bonds: Is 5.51% An Attractive Yield?
    Dec. 20, 2013 TOL Comment!
  • The Case For A 0% Bond Allocation Is Weak
    Nov. 7, 2013 HYG, IEF, LQD 26 Comments
  • 7% Yielding Preferreds For Income-Hungry Investors
    Nov. 7, 2013 BDN, COR, DLR 14 Comments
  • Thinking About Selling Stocks? Consider This First
    Oct. 31, 2013 AMZN, BMY, MAN 7 Comments
  • Diversifying Your Stock Portfolio - How You Do It Matters
    Oct. 22, 2013 CAT, EXC, FCX 3 Comments
  • There's Still No Rush To Buy IBM
    Oct. 21, 2013 IBM 30 Comments