Archive - November 2014

1
Metrics Used to Detect a Crash
2
Financial Advice—Whom Should You Trust?
3
Cheap Oil Gets Cheaper
4
Should Bears Become Bullish?
5
Fixing Social Security

Metrics Used to Detect a Crash

When stocks crash what are ways to decide if the crash is real or just a little hiccup?
First I recommend getting a deep understanding of the macroeconomic picture and then decide whether or not to classify the economy as bullish or bearish. Then review stocks to see if the long term smoothed PE ratio (like PE10) shows the market is undervalued or overvalued.

Then take a look at momentum trader’s technical tools. If stocks lose momentum and the trend is broken then it is time to get out. A common one is the death cross where the 50 day …

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Financial Advice—Whom Should You Trust?

Given the stuff I’ve encountered in the past week, you’d think I was living in Scam-a-lot. It’s been a banner week for schemes designed to hoodwink the consumer and get us all to buy questionable stuff at unquestionably high fees. It’s made me think about a few predictable trends to watch out for.

If you’re reading about it on the internet, consider the source.

This morning I had a lovely 20 minute conversation with someone representing himself as a reporter on deadline. Now, this guy sounded pretty good—had a voice better than Ron Burgundy—and told me his research staff had …

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Cheap Oil Gets Cheaper



The economic news that everybody is talking about lately is the sudden unexpected drop in oil prices.  One type of oil, West Texas Intermediate crude, has fallen from over $140 a barrel in the Summer of 2008, and $115 a barrel as recently as June, down to $91, and there is no sign that the decline will stop there. 

The price drop seems to be the
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Should Bears Become Bullish?

 

Prominent formerly bearish fund manager Hugh Hendry was interviewed on MoneyWeek. Hendry had switched in November, 2013 to a bullish viewpoint after being possibly the world’s most bearish hedge fund manager. He feels that global Central Bank stimulus is so powerful that investors have no choice but to become bullish.

Should bearish investors do as he did and become bullish? Jeremy Grantham of GMO funds, a noted bear and expert on bubbles recently said that the SP may go to 2250 before it crashes. That’s only 10% higher. When the market is in an uptrend it may move up …

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Fixing Social Security

social securityFor quite a while now we’ve been reading the reports from the Social Security Administration’s reviews of the status of the trust fund – where the prediction is that we’ll end up in the year 2033 with only enough money to pay 77¢ on the dollar of the promised benefits from Social Security. So far this revelation has not resulted in policymakers’ taking any actual steps to fix things, but sometime someone has to act. What can be done about fixing Social Security?

What Can We Do About Fixing Social Security?

As future recipients of benefits, we have some actions… Read More

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