Posts filed under “Valuation”

Bear Markets Seduce Investors

One of the astute comments recently from Paul Desmond of Lowry’s was that "Bear markets seduce investors to keep buying stocks."

Most investors do not study market history, but if they did, they would learn that the financial wreckage of the great crash of 1929 was not from that year, but rather, the bottom fishing in 1931 and 1932 and 1933. Bottom fishing is the killer.

Consider this discussion of similar bottom fishing, only this time, in a specific sector: Financials:

The credit crunch, despite the strenuous exertions of Bernanke & Co, shows little sign of easing, much less ending. Yet, financial shares have risen from the grave and are enjoying a dandy whirl. As Stephanie Pomboy, the perspicacious proprietor of MacroMavens, points out, this pop amid dauntingly ugly corporate reports by the banks and the rest of the financial gang is something we’ve seen before, and often.

"Since the wheels first started falling off last summer," she relates, "the financials have posted no fewer than 12 rallies of 5% or more…. It bears note that none of these stints, separate or combined, have precluded the financial sector from shedding 28% over the stretch."

Maybe 13 will prove the lucky number. Stephanie, though, sounds more than a bit skeptical, and so are we. At some point, we suspect, investors are going to sober up and stop popping the cork to celebrate the latest lender to take a multibillion-dollar bath.

Amazing — 12 rallies of 5%+, and the sector is down 28% from when the Fed began cutting.

S&P500 Financial Sector


Great Expectations
MONDAY, APRIL 28, 2008

Category: Markets, Psychology, Technical Analysis, Valuation

Professional Money Managers Are Bullish

Category: Economy, Markets, Psychology, Valuation

Schwab: We Don’t Need Your Stinkin’ Analysts

Category: Earnings, Markets, Psychology, Valuation

Fortune 1000

Category: Corporate Management, Valuation, Web/Tech

Earnings Report Card

Category: Earnings, Valuation

What’s Wrong With Billionaire Fund Managers?

An article on humongous hedge fund paydays in today’s NYTimes was quite interesting: “The richest hedge fund managers keep getting richer — fast. To make it into the top 25 of Alpha’s list, the industry standard for hedge fund pay, a manager needed to earn at least $360 million last year, more than 18 times…Read More

Category: Corporate Management, Valuation

Apple Now Bigger Than Citi

Category: Psychology, Valuation

Surprise: Gee! No, G.E.

Category: Earnings, Economy, Financial Press, Valuation

How Cheap Are Stocks ?

Category: Earnings, Economy, Markets, Trading, Valuation

5 Reasons Why Bank Stocks Have Not Bottomed

Category: Credit, Earnings, Employment, Valuation