In the middle of an earnings season which has been generally pretty positive, the negativity on Wall Street still runs rampant. For I don’t know how long, and it seems like forever, there is always something which can bring the market down. The European Currency Crisis, the Chinese Real Estate and Bank Lending Bubble, the Supercommittee on the Debt Ceiling, a double dip recession, and on and on it goes.
If you are an investor of any kind, you throw in the impact of High Frequency Trading and Quantitative Investors, leveraged ETF’s, and how cheap financing is, and you have a market environment which is far different than anything investors ever visualized or experienced even 3 years ago. Yet, at the end of the day, the same rules for valuing securities are still applicable. It is hard to remember that when every day is up or down 200 points, but the basics are still applicable with investing, at least in my opinion.
A good article about Reid Hoffman, the founder of Linked In, and his current challenges: http://www.nytimes.com/2011/11/06/business/reid-hoffman-of-linkedin-has-become-the-go-to-guy-of-tech.html?_r=1&ref=business
Big Media is scared to death about losing its current position so it is going with the nuclear option: http://techcrunch.com/2011/11/06/big-media-nuclear-dmca/
A new budget deal might be taking shape- don’t hold your breath: http://www.bloomberg.com/news/2011-11-04/becerra-says-4-trillion-deficit-deal-possible-with-spending-tax-balance-.html
I hope everyone has a good week and as always, if you have any comments, questions. or thoughts about these articles or anything in the blog, please post them!
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 charterholder.
Yale Bock, CFA