Posts filed under “Markets”

The Megabubble Poll

Paul Farrell proposes a "Megabubble Poll"  — how many of these do you think are  bubbles.   All, some or none?

Real estate bubble. Clues: Speculators driving prices. Lenders offer cheap money, short-term loans. Home-equity loans fund short-term spending. Fed chairman sees minimal froth.

Energy and oil bubble. Clues: Crude hits another record. Political turmoil in oil-producing nations. Consumers buy gas-guzzlers at record pace. GM, Ford in trouble.

Foreign-trade deficit. Clues: Monthly deficits top $50 billion. This year’s deficit will beat 2004′s $617 billion. Foreigners now own $2.5 trillion of America.

Federal-budget deficit. Clues: Federal debt now $7.8 trillion; add another $400 federal deficit this year.

Corporate pensions underfunded. Clues: Airlines, auto, other manufacturers heavily burdened, default to taxpayers.

Local government pensions deficits. Clues: A near $400 billion mess draining local taxpayer resources.

Weak U.S. dollar. Clues: Fear China and other foreign powers will replace dollar reserves. Warren Buffett now betting $20 billion on foreign-currency hedging.

Social Security deficit. Clues: No choice, cut benefits or raise taxes; politicians hate both, so it’ll get worse.

Health-care costs. Clues: Burden shifting to employees. Costs above inflation. 43 million uninsured.

Medicare deficit. Clues: Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. Long-term estimates over $36.6 trillion.

Personal-savings shortfall. Clues: We consume not save. National savings rate is zero, down from 8% two decades ago. Average household net worth less than $15,000, excluding home equity.

Consumer debt bubble. Clues: We’re living beyond our means. Consumer debt at $2 trillion. At 13%, household interest as a percent of income is at all-time high. Personal bankruptcies rising.

War and defense deficit. Clues: Iraq and Afghanistan wars cost over $200 billion a year, $2 trillion a decade.

Homeland insecurity. Clues: Minimal legislation to protect ports and chemical plants. Federal budget even cut border patrol 90%. Vigilantes patrolling.

Class gap widening. Clues: Superrich and CEOs getting increasing share of wealth, ownership and tax cuts.

Congressional pork. Clues: Both parties act like teenage addicts on a spending spree with stolen credit cards. By not using the veto, the administration acts like a parent who needs Nanny 911.
International credibility. Clues: Image problems: Post-9/11 imperialism, WMDs, Abu Ghraib, Gitmo and more.

Junk mailings. Clues: Mail solicitations increasing for credit cards and hot stock newsletters.
New "Mad Money" cable show. Clues: Frantic, manic entertainment; 1990s irrational exuberance again.

Numerous key mini-bubbles. Environmental, resources, technology, educational, outsourcing, jobs, you pick!

Now total up your scores on these individual bubbles. If your total is 50 points or more, you see a megabubble dead ahead. Prepare accordingly. If you’re close to 100 points, consider a very conservative strategy.

Source:
The Global megabubble? You decide
By Paul B. Farrell
MarketWatch, June 26, 2005  6:43 PM ET
http://www.marketwatch.com/news/story.asp?dist=&param=archive&siteid=mktw&guid=%7B96AA9068%2D43FC%2D4FEC%2DBE52%2D7011528EA798%7D

Category: Commodities, Economy, Markets, Psychology, Real Estate

How Markets React and Recover

Category: Markets, Psychology

More on Post-Terror Market Responses

Category: Markets, Psychology

Post-Terror Market Responses

Category: Investing, Markets, Psychology, War/Defense

What I did over my Summer Vacation

Category: Markets

Stop Blaming Oil!

Category: Commodities, Investing, Markets, Psychology

Chart of the Week: % of NASDAQ Issues on MACD Buys

Category: Markets

Method to the Madness: Alpha Chasing Beta

Category: Investing, Markets, Trading

Apprenticed Investor: Tracking Elephants, Part I

Tscm_1The latest "Apprentice Investor" column is up at TheStreet.com. Its called  "Tracking Elephants, Part I." 

Don’t be fooled by the title to this piece: "Tracking the Elephants" could just have easily been named "The non Technicians Guide to Technical Analysis (in two parts)." The idea was to reveal to fundamentalists a few of the more significant ways they can use charts to improve their results.

Podcast:

Here’s the ubiquitous excerpt:

"Here’s an interesting question: If you could look at one and only one source before buying your next stock, which would you choose: a fundamental analyst’s report (with no charts in it), or the chart of your choosing?  While I like having access to both, I cannot ever imagine buying something without first looking at the chart.

And so we wade into the ongoing battle between technical and fundamental analysts. Frankly, it’s one of the sillier debates in investing. But I’ve heard so many bad arguments and misleading theories about technical analysis that I decided to weigh in."

Before we wade too deeply into the controversy, ask yourself: "Why do I need to choose?" Why wouldn’t you use any tool that can be shown to have value? You wouldn’t build a house using only a hammer, but no drills or saws. Why limit yourself away from a tool that can assist you as an investor?

In the column, I used a chart of Ford — but it could have been just about any company , from JDSU to Lucent to World Con or Enron.
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Ford’s Downtrend
click for larger graph

Fordaiannotated

Prior columns can be found here.

To keep the column a modest length, a discussion about Janus Funds
selling of AOL Time Warner was edited out.  For your reading
pleasure, that section is here.

Podcast:

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Category: Markets, Podcast, Technical Analysis

Why Politics Matters to Investors

Category: Markets, Politics