Monday
The point is that earnings reports boil down to one thing: EXPECTATIONS. Looking at the expectations for this season, due to the current economic crisis, overall expectations are much lower than in recent quarters.
This week we have a number of big tech stocks reporting and the expectations are definitely coming down. Just to put it into perspective, I made the following table that shows the companies reporting and the current consensus estimate for earnings this quarter. I have also included the estimates from 30 days ago as well as the estimates from 90 days ago. 
As you can see, the expectations have declined sharply in the last 90 days. Have they come down enough? That remains to be seen and it will likely be case dependent.
Editor’s Note: IBM, Apple, and Google all moved higher this week after beating expectations. Click here to read the full article.
Tuesday
Banks are in their current quandary for a reason. They were reckless, greedy and arrogant. And it’s the arrogance that bothers me the most.
Banks actually thought that they could make risk go away by engaging in some fancy financial engineering. Failing that, they thought that they could talk their way out of their mess. And, as a last resort, they suspected that the government would come to their rescue.
Bankers and politicians – hard to say who’s more arrogant. Politicians think they can legislate away economic cycles. The U.S. was in an economic recovery stage for the entire century. We were due for a pullback. But the government wants to cut it short and make it as painless as possible.
And the way to do that is to “save” the banks.
These may be good intentions. But in this case that old saying applies, “the road to hell is paved with good intentions.”
Massive government intervention hasn’t worked so far. But it will certainly bring another wave of bottom-calling this year. Don’t believe it.
The banks and the executives who lead them aren’t complaining. Amazingly, the government hasn’t forced the CEOs of the banks out. They are leaking tens of billions of dollars. They’re still making obscene salaries, and that’s unacceptable. Click here to read the full article.
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Wednesday
You must own some stock no matter what your age. You also have to balance your portfolio with low risk investments to protect yourself form the sell off beast.
The formula is too easy, maybe that’s why everyone ignores it. I should charge you a couple thousand dollars for this and make you sit through several hours of CD’s to get to the point. Here it is free.
100 minus your age equals the percentage you should have in stock. (100 – 55 = 45) 45% in stock, 55% in bonds or other reduced risk investments. Not good at math, your age is the percentage you should have in bonds.
This balance will give you the opportunity to avoid a very poor retirement.
The bond idea has been ignored since the craziness of the mid-eighties drove us to money insanity. No top in sight, why not go for “the stock market lottery.” Only bowling teams from small towns in Maine ever hit the lottery. Get over it. Right now, I am making more money in corporate bonds than anything else.
Since October in The Bond Trader, I have taken capital gains as high as 90 percent. The potential in bonds right now is better than I have ever seen. The current interest yields are also great, six to eight percent is not unusual. Click here to read the full article.
Thursday
From 1940 through the end of 2007, over 90% of all three or five-year stretches were winners. And there were no, zero, zip, zilch losing 10-year periods.
By rolling 10-year periods, I don’t mean just 1950 to 1959, but also 1951-1960, 1952-1961, 1953-1962 and so on. Since 1950, there have been 60 rolling 10-year periods. And no matter where you started in them, you would have made money.
But if you are beginning to doubt if that’s right, the results from this decade have given you plenty of reason. We started out with three back-to-back bear markets this decade: 2000, 2001, 2002. We had a strong bull in 2003. Then we got a lame period for the next two years. Finally, in 2006, the market got strong again. It stayed that way late into 2007 before it nearly fell to its open and went negative again. The calendar turned just in time. Then last year it was back down again.
At this point, nearing the end of January 2009, as Barack Obama steps up to the presidency, we are into another bad year. Two and a half good bullish years out of nine years and one month have left U.S. stocks in the red. So far this decade (since the close of 1999), the Dow has lost 30%, the S&P has shed 45% and the Nasdaq is still down 65%.
That hardly inspires confidence in the infallibility of the long run. We may be about to see the first negative 10-year period for stocks since the Great Depression. Click here to read the full article.
Friday
The bottom line is that the demand for gold is highly elastic and can increase dramatically, even from today's record levels. At the same time, however, the supply of new gold is highly inelastic. It is heavily constrained, and even with an all-out effort can only be increased very slowly - if at all.
The fundamentals for gold have never been stronger. Countries around the world are debasing their currencies at a rate that is historically unprecedented. Demand for gold should only continue to increase as more and more people shift from paper currencies and financial assets to hard assets and tangible forms of wealth. --------------------------------------------------------------------------------------------------------------------------------- The funny money gang would have you believe it is gold that is the anachronism. History speaks against this shortsighted claim. Lack of discipline in the global monetary system has sponsored the likes of Bear Sterns, Fannie and Freddie, Lehman Brothers, AIG, the year of the bailout, Madoff, all of the other recent officially sponsored atrocities, and those yet to come. This infestation has just begun. The US is now an economic wasteland and you can clearly see why a system with no discipline (gold) always leads to fraud and excess. Human nature doesn’t change and our Founding Fathers insightfully warned of current events.
Roosevelt illegally confiscated gold from the American people in 1933. Nixon reneged on the international agreement to exchange foreign currencies for gold 38 years later. We can thank this dynamic duo and most of the administrations ever since for our present predicament. The world has been on a fiat standard (no standard) since Nixon’s default. Gold has been targeted for at least the last 76 years in one form or another. The Fort Knox gold vaults are likely barren.
Click here to read the full article.
INTERNAL ENDORSEMENT Retirees Now Able to "Milk the System" like the Rich It's not only billionaires who are using the financial crisis to get lucrative "insider deals." Thousands of regular Americans are cashing in on a loophole for collecting $8,881 a month or more, backed by the U.S. Treasury. The next batch of checks is going out on March 27, 2009. Click here to find out how you can get your name on the list. |
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