We all know that Congress is only too happy to “invest” our money. But how are they when it comes to managing their own? Not so great, as it turns out. A review of the personal financial disclosures filed by members of the… Read More
Investing Basics
Wall Street bets on companies by buying their stock. It bets against them by shorting their shares. A short seller borrows shares, sells them and waits for the price to go down. When it does, the shares are repurchased at a… Read More
Benjamin Graham, the father of value investing, once described his strategy as “buying dollars for 50 cents.” He would have loved this market. Graham had several tricks to determine whether a company was undervalued. One of them was assessing its book value, a figure… Read More
Talk about a rough ride: The nation’s nine major airlines lost -$671 million in the second quarter. We’ve all heard plenty of talk about how no one is flying anymore. Maybe it feels that way, but the airlines are still bringing in plenty of revenue. The total top line for… Read More
Stocks and bonds too dicey? Commodities out of reach? Options too complex? Then forget about all those investments. Right now, you can earn up to 4.5% with FDIC protection. Now, 4.5% isn’t too tough to beat with other investment classes, but each of them… Read More
The Securities and Exchange Commission has issued new rules about short selling, a strategy investors employ when they think a security’s price is going to fall. The two new rules don’t restrict short selling and won’t affect individuals or “short” or “ultrashort” exchange traded funds, at least not yet. The SEC plans an industry roundtable in September to discuss other proposals that could limit the practice, which has come under scrutiny after criticism that it drives down stock prices. Short and ultrashort (read: “leveraged”) exchange-traded funds allow… Read More
The Securities and Exchange Commission has issued new rules about short selling, a strategy investors employ when they think a security’s price is going to fall. The two new rules don’t restrict short selling and won’t affect individuals or “short” or “ultrashort” exchange traded funds, at least not yet. The SEC plans an industry roundtable in September to discuss other proposals that could limit the practice, which has come under scrutiny after criticism that it drives down stock prices. Short and ultrashort (read: “leveraged”) exchange-traded funds allow an investor to bet on a price drop. The funds are popular because they can be held in a typical brokerage account rather than transacted through a margin account, the vehicle through which short sales typically take place. One new rule calls for more reporting of short sales to increase the amount of information available to the public. Wall Street’s self-regulatory agencies will publish daily short-sale transaction reports that detail the total number of a company’s shares were shorted. After a month, the data would be… Read More
In a perfectly efficient market, we could never buy a stock at a discount or sell one at a premium. Every security would be perfectly priced, all the time. It’s only through irrational, emotion-driven selling that value investors will occasionally get the chance to pick up a $50 stock for… Read More
Yesterday’s earnings wrapup suggested three best bets, Caterpillar, Merck and UnitedHealth Group. All three companies exceeded expectations and posted strong gains. Caterpillar rose nearly 8%, Merck was up +6% and UnitedHealth gained 3%. The Dow and Nasdaq, by contrast, were flat for the… Read More
Early March 2009 is not only notable for its cheap stocks. It’s also the strongest the dollar has been since 2006. It’s also the strongest it will be for quite some time. At its high on March 5, it took $1.25 to buy a euro. The dollar has since lost… Read More
Apple (Nasdaq: AAPL) turns in its quarterly report card this evening after the closing bell. Its earnings, like any company’s, are all about the past. With Apple, the direction to look is forward. First, the basics: Apple… Read More