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Yale Bock is the President of Y H & C Investments, a Registered Investment Adviser based in Las Vegas, NV. My educational background is a B.A. in Economics from UC-Irvine, a MBA from UC-Irvine, and have earned the right to use the Chartered Financial Analyst designation. I have been managing... More
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  • It's Party Time On Wall Street- 0 comments
    Oct 21, 2013 6:08 PM

    Wall Street is throwing a party, and it will probably last a good few months, fittingly, through New Years Day. You see, with the fear of Armageddon gone (a default of U.S. debt obligations), there is little in the way to prevent the stock market from rising through the end of the year. Yes, naturally, there are the quarterly earnings announcements where winners and losers are determined, but that is the case every quarter. However, if you look at the check list of potential problems investors have had to grapple with over the last few months, it certainly can be said all of them have been answered in a relatively painless way. The new Federal Reserve Chairman is thought to be a dove, so monetary policy should be, hint hint, accommodating. Tapering is off the table, at least for the foreseeable future, because the economy is thought to have weakened because of the government shutdown. Many money managers, especially hedge funds, are trailing all major indexes, so they are looking for any opportunity to buy stocks which can help their performance. Bonds are trading at all time highs, and any increase in interest rates will cost an investor money. Iran is thought to be starting to see the light about their nuclear ambitions, although that has yet to be proven. Finally, corporate earnings are rolling in, and as has been the case for the last five years, big business is just rolling in profits. Anyone for some refreshments?

    Speaking of earnings, last week was full of them as Bank of America reported a better quarter because of lower loss reserves, IBM showed weak earnings growth, and Verizon had a very good quarter with a whole lot of I phone additions added to the paying customer list. Google reported a very good quarter as mobile and broad based advertising strength continue to power the search giant. Morgan Stanley also reported a better than expected number because strength in the asset management business offset poor fixed income trading results. Today, it was announced that a private equity group is taking Tellabs private, and Netflix reported a beat on international subscriber numbers. McDonald's also reported this morning with weaker than anticipated revenue but matched the earnings per share number. The rest of this week and certainly next will bring a flood of numbers and I would expect most will be pretty good.

    Al Gore has certainly benefited from the stock market over the last ten years, mostly because of his board positions with Apple and Google. Most recently, he sold a cable network to Al Jazeera, I believe, for a nice profit. Anyway, now that Al is an expert in business, he believes international oil companies could be considered the same as some of the investment banks which had problems during the 2008 crisis. He believes that some of the reserves the oil companies have accumulated will ultimately not be burned and they are due to get repriced (fall). Earth (tone) to Al, hello, they are already cheap. Al should also be reminded when he gets on his jet, that the oil companies helped him get from point A to point B.

    Finally, had to mention the complete stupidity of Ted Cruz and the tea party in the way they handled their negotiations with other Republicans, as well as the President. Cruz made himself a hero of the tea party, at the expense of moderate Republicans. The primaries will be full of candidates in both parties gerrymandering and running extreme campaigns. As if the country needs more extremism from our elected representatives!!! Big business is gearing up to move to the center and support more moderate Republicans as they saw how destructive the recent standoff could be for business. Money is the mother's milk of all politics, and I expect a move to the middle for the Republican party could prove very beneficial. Time will tell.

    Thanks for reading the blog this week, and if you kind of feel the same way, and would like to share your thoughts, it would be most welcome.

    Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charter holder.

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