Creative Investor

Five Reasons the Market Could Crash This Fall

I can barely find an article or a blogger saying that the bull market is here to stay, everyone is in total agreement that the market has run it's course, there is no fundamental reason for it to keep going up, but plenty of reasons to go down... I can't say that I disagree... But what is troubling is this consensus - markets usually drop when the majority doesn't expect it to do so, but every pundit on TV and online seems to be shorting the market right now...

Now, I'm certainly sticking to cash right now, but I'm very curious what's going to happen... I almost expect the market go past 10,000 DJI before dropping down.

Any thoughts on this "consensus" about the market drop?

Positioning for Profits in Intense Market Uncertainty

Great analysis. What I would add to this though, is that even with Global Titans one needs to be careful. Company's overreliance on any one market or region can defeat the purpose of investing into a diversified business. What I see as the best bet if "Global Titan" is what you're looking for, is to look at conglomirates with proportionally strong operations spanning Europe, Asia, Russia, Brazil and of course the U.S. If the company is significantly overweight in anyone of those markets, it presents an undue risk.

Applied Materials Seeks Expansion into Solar

AMAT is one of the best technology stock plays in the current environment. Demand for solar equipment, which they manufacture, is expected to stay strong; microchip manufacturing may slow down, but the demand for equipment that enables efficient and innovative manufacturing process is likely to stay strong. So, I agree with a sentiment mentioned by Applied Materials that from here on out they expect demand for their products to improve.

GE's Earnings Miss: What Ever Happened to Warning Investors First?

I don't agree with the author's point that companies absolutely must forewarn investors about what is going to happen on a bi-weekly or monthly basis or whatever. I mean, seriously, what difference would it have made? GE simply would have taken the fall two weeks earlier. Any time companies provide guidances it increases speculation in the market since markets are given a reason to speculate. Obviously, management should provide investors with expectations for the coming year, but they bear absolutely no responsibility to give you a warning that they will miss the quarterly earnings estimates two weeks in advance.

Two New Dogs To Watch: Citigroup, Pfizer

I definitely agree with you here. I have not looked at Pfizer much, but Citi is looking very attractive right now: actual dividend yield is about 6.7%. But I'm also in the waiting mode - until after the Dec 11th Fed meeting, which will let us know whether the correction will turn into recession or not. Fed has previously expressed sentiment in regard to the markets still being "bad", but they don't want to make any more cuts. If they don't make any rate cuts on Dec 11th, that will be bad, very very bad.

My blog: Creative Investor 101

Cisco's Big Picture Looks Good

I find it interesting how Cisco does everything it can do encourage video use to increase total bandwidth usage so then companies would need to upgrade all of their networking gear which they'll buy from, well, Cisco.
I've recently analyzed Cisco's annual report and by using discounted cash flow analysis. The full report can be found here: www.creativeinvestor10...

Microsoft's Impressive Quarter Fuelled By Improved Business IT Spending

I do think that Apple will slowly take away a larger share of the PC marketplace, but only in the individual consumer market though and largely due to huge brand recognition thanks to iPod and iPhone. Business customers are not likely to switch any time soon, everything revolves around MSFT-design business systems for many businesses. That's where Linux comes in, but it's been trying to pressure MSFT for years and yet MSFT is still the most profitable software company in the world. I see Google as a more formidable opponent that MSFT should fear since if they succeed with Google Apps, they can eat away MS Office market share relatively quickly - that is just how viral their business model is.
I've actually analyzed MSFT just a few days ago: www.creativeinvestor10...

Why Buffett Loves Johnson & Johnson

I've actually done my own analysis prior to reading your article and found it very interesting to read your take on JNJ. I've actually used a much lower expected growth rate of 10%, my premise being that last 10 years don't really predict the next 10, especially with the economy for which everybody has his own forecast. At the same time I used a lower discount rate, 10%, since this company is a relatively low risk.

So, my intrinsic value is much higher at $98.64. At the same time, I look for 30-50% in MOS to account for my inexperience. Thanks much for your great analysis.

Here is my full analysis if anybody is interested:

creativeinvestor.blogs...