Market Comment

The stock market has been posting gains the past few days. After two very tough months to start 2009, what could go wrong? Plenty, especially if you are focused on just the Dow Jones Industrial Average.

Don't get hung up on the Dow Jones. The Dow Jones may not be a "relevant" yardstick for you to use. After all, it's only 30 stocks…and you might not own ANY of them.

Someone is actually holding Jim Cramer responsible for some of the advice he has given, and also for the fact that CNBC has "morphed" into an entertainment channel.

Banks (and brokerage firms) that own mortgage backed securities have been required — since November 2007 — to use mark to market accounting on these securities. Coincidentally, this was just around the time these mortgage securities started dropping precipitously in value. 2007 saw many mortgage firms get wiped out, and brokerage firms and banks holding these assets started realizing the volatility of these assets.

Did you know General Electric (GE) posted record revenues last quarter?  That has not really helped their stock, has it?   Remember always, price is the ultimate indicator, which is why I rely more and more on charts.  Fundamental analysts and company management can pontificate all day long about market share, earnings and revenues.  If the market doesn't like it, the stock is going down. (…)

When I was in college, I loved listening to a local college radio station (WFUV, Fordham) that had a sports-talk show on Sunday nights.  The show featured something new: phone calls from listeners!  This was more than 25 years ago, before WFAN in New York, ESPN Radio and all the other sports outlets we have today. (…)

Economic recessions and economic depressions

Since 1854, the United States has been through 32 economic cycles, one cycle lasting (average) nearly 5 years.  That's not the length of a recession, that's an entire economic cycle.  This includes some recessions/depressions in the 1800's that lasted 3 years, another for 6 years and a long depression that lasted from 1873 through 1896, a period of 23 years. (…)

This is not buy-and-hold market.
As we roll into 2009, I'm sticking with the same overall theme as I have in years past:  this is not for the buy-and-hold crowd. (…)

How can so many people be so wrong for so long?
It wasn't all that long ago where we had gas lines, a prime rate that reached 20%, unemployment reaching 12%, and inflation at 13%. (…)

Take a walk with me down Memory Lane:
1973: S&P down over 17%  (ouch)
1974: S&P down over 29%. (ouch again)
The bottom for the S&P was reached in October 1974. (…)

Like crossing the equator on a ship — should buy and hold investors get some kind of recognition (or have some celebration) for crossing the line?  The S&P 500 crossed 1100 in 1998 (twice), 2001 (3X!), 2002, 2004 and 2008.  Look, when I drive around the same block twice, even I ask for directions!  Oh, and today the S&P 500 is at 940.  Ready for 9 passes in ten years? (…)

The Treasury announced they will begin to inject capital (money) into banks, under terms created under the bailout bill.  This article will try to walk through, in English, what this all means. (…)

Quick history lesson: Mark-to-the-Market was a practice originally begun by futures and commodity traders in the 19th century.  Essentially, mark-to-the-market means your holdings must be "priced" every night…at the price they can be sold at. (…)

That was the headline I found over at CBS Marketwatch.  As usual, the news media is whipping (anyone who will read) into a frenzy about Lehman Brothers.  More news may be forthcoming about Lehman — between the time I finish writing this and the time you read this. (…)

Exxon reported nearly $12 billion in profits for the previous quarter recently. $12 billion! More net profits in one quarter, than ever recorded in the history of mankind.
And what did the stock do? (…)

Sometimes, trying to get your arms around a gigantic number (for example, the area of earth covered by land) just takes time. (…)

The line heard in every economic recession, and every single stock market pullback is: this time it's different. (…)

I'm going to paint a word picture for you.
Suppose you own a stock that gave three successive buy signals last summer — in 2007. The stock ran from $28 per share up to $34 a share. (…)

Another theme I'm surprised hasn't been discussed more often will be more foreign firms trying to make acquisitions of US-based companies in the next few years. (…)

In the coming months and years, you will hear more publicly traded companies than ever before discussing the idea of GOING PRIVATE.  Even with the mortgage mess, there is STILL access to capital. (…)