prudentinvestor

Equities Update: Energy, Financials Derail Dow's Run

Not yet.


On Nov 12 08:55 PM LaChic wrote:

> well, we had the job report and to some this was great news, and
> the market went down, which brings me to my question? is this is
> it?

Stocks Furthest Above and Below 50-Day Moving Averages

I have held several big pharma stocks for decades, and those I purchased before the mid-1990's have served me well over time with decent dividends and appreciation. However, since the mid-1990's many have underperformed and dropped in value to what appear to now be bargain basement prices. Despite these incredibly low valuations, I have added hesitantly to my pharma positions because:

(a) Risk of government price regulation.
(b) Risk of cutting dividends (indeed SGP cut theirs substantially several years ago, and now PFE just halved theirs, and I wonder how much longer MRK or BMY will maintain their dividends, with their stock prices being so low).
(c) Risk of mismanagers destroying excellent balance sheets to enlarge their personal empires with acquisitions (like PFE and MRK just did).

Thus, it is not surprising to see the stocks out of favor. The only reason that you see ABT on the list above is that it had been an outlier that resisted the group's death spiral until recently. You do not see PFE, MRK, BMY, in the list because they have been down for so long, that their 50dma has been uniformly down for a long time.


On Apr 04 12:45 PM old trader wrote:

> I noticed that a fair number of the "under 50 dma" group are in the
> healthcare sector. I wonder how much of the underperformance of the
> sector is because of concern over the adminstration's health care
> reforms, how much is due to investors becoming somewhat more aggressive
> in their outlook, and how much might be due to company-specific porblems.
>
>
> It might be worth "checking under the hood" of some of these.