Archive for November, 2010
Smart Investing Daily – Two Strong Companies in a Dead Housing Market
Monday, 29 November 2010
I have been examining real estate investments in several different forms since early 2009, when I was one of the first on CNBC to begin recommending it, albeit cautiously.Back then, I was recommending the purchase of XHB, a housing ETF that was trading for about $9, as a diversified proxy for an actual investment in real estate.
I was drawn to XHB mainly because the stock had been beaten down so badly and the homebuilders in particular were in such an oversold condition, it seemed that most of them from a valuation standpoint were pricing in a complete bankruptcy situation. This price action, to me, seemed overdone. The XHB hit a high of almost $20 earlier this year…
Know Your Investment Intimately
When investing, you have to be extremely selective in both the angle at which you invest in a sector you like as well as the vehicle (stock, ETF, option, bond, etc.) that you choose. At certain times,
Smart Investing Daily – Your Thanksgiving Turkey May Hold the Secrets to Wealth
Thanksgiving is a time for family, friends and feasting. The centerpiece of most holiday banquets is the good ole’ domesticated turkey, which, unfortunately for them, is bred simply to be eaten.
Unlike wild turkeys, which most of us do not eat, the domestic turkey is not only another product of Americans’ cultural need for the bird over the holidays… but a symbol of how far the “food” business has come.
Consider this:
- In 2010, more than 242 million turkeys were raised with an average weight of 28 lbs per bird or 6 billion pounds of turkey processed.
- In 1970, only 105 million birds were raised with an average weight of 17 pounds or 1.5 billion pounds processed.
- That’s a production increase of 300%!
Can you say “bird-flation”?
Smart Investing Daily – Are We Living in the Federal Reserve’s Twilight Zone?
Jared Levy, Editor, Smart Investing Daily
Friday, 19 November 2010
On Monday, an old friend sent me a link to a now virally famous cartoon clip via YouTube. The clip is a depiction of the Federal Reserve’s second round of quantitative easing in a simplified, humorous manner and has been viewed over 1.6 million times, not to mention it had a front and center showing on CNBC.
It comically poses questions that pretty much sum up the entire state of our economy right now. Is this some kind of a nightmare? Are we in an episode of The Twilight Zone?
Please watch the clip before you continue.
I couldn’t have said it better myself.
Quantitative easing, in theory, should put money into consumers’ hands to spend and into companies’ hands to hire. The Federal Reserve is worried about deflation.
But is this really the case?
Smart Investing Daily – Is Your Portfolio Safe During Options Expiration?
Tuesday, 16 November 2010
Option expiration is this Friday and it’s not only option traders who need to be extra observant. Even if you’re an average stock investor, there are a couple things you need to know about option expiration week that affect you as well… and your broker isn’t telling you.
Volatility is most likely the first word that comes to mind when you think about option expiration week. Several “experts” on CNBC have begun to stir the “volatility” buzz. Most media outlets tend to exacerbate this misnomer. More accurately, using the word volatile or unstable as the main descriptors for option expiration would not be my choice. Especially not in the last six months.
Of course, in the early days of options trading, option expiration played a larger role because options markets and stock markets for that matter were not as liquid, efficient or easily traded as they are today. Back in the ’70s, ’80s and even ’90s, lower options and stock volume — coupled with fewer market participants — caused weird movements in certain stocks and indexes during expiration… making it a “feared” event.
Being that the mechanics and technology of the markets have changed quite a bit in recent years and options volume has been growing exponentially over the past decade, the behavioral characteristics of options expiration and its volatile past have, in my opinion, greatly dissipated.
Smart Investing Daily – How to Get Even With OPEC When Crude Oil Hits $100
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The meeting of the G-20 in Seoul this week still has not produced a solution or agreement to end the global currency war that is ensuing.
Smart Investing Daily – Is the Gold Standard Returning?
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World Bank President Robert Zoellick, a former member of the U.S. Treasury, made his case for bringing back the gold standard. This statement in the Financial Times comes just ahead of the G20 meeting in South Korea. Mr. Zoellick said, “the system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”
Smart Investing Daily – The Most Interesting Stock Market Chart of the Week
Friday, 05 November 2010
I thought Friday would be the perfect time to bring you a bit of technical analysis insight. This week’s stock market chart just blew me away when I saw it and thought it would be a great candidate. Adobe systems, the Silicon Valley software creator, should not only be known as the creator of PDF’s and flash players, but maybe also for the enormous and frequent “gaps” in its stock price.
Adobe Versus Apple
Before we get to those gaps, there is one thing that we need to talk about and that is the ongoing feud between Adobe and Apple. You see, Steve Jobs doesn’t like flash and doesn’t want it in his devices. In a letter to investors (and the public) Jobs noted six reasons why Apple doesn’t run flash on any mobile devices and the iPad. I don’t know about you, but going head to head with Apple would not be on my wish list this Christmas.
Apple is obviously a dominator in mobile and personal computers and a force to be reckoned with. Flash is a very profitable product for Adobe and they will do what they can to make it work. It’s a battle that both want to win at just about any cost.
Enter Skyfire and their new browser, which bears the same name. Skyfire provides iPhone and other users a way to view videos and other content that is flash-based. So if you have been dying to watch or play anything flash on your iPhone, a solution is here. Skyfire is not related to either company and they actually halted sales due to the overwhelming demand.
Will this hurt or help Adobe?
Smart Investing Daily – QE2 & Monopoly
Why Quantitative Easing Is Similar to Monopoly
Tuesday, 02 November 2010
The second iteration of quantitative easing (QE2) is supposed to make “money easier” — make it flow from the banks to consumers to businesses, etc. The first round of quantitative easing pumped billions of U.S. dollars into the system, but not much of it made it into my hands, and I’m guessing yours either…
If you have ever played Monopoly and have been “the bank,” you get to control all the money that is divided out to each player.
Remember that the “extra” money is not part of the money circulating in the game yet.
Did you ever cheat and add a little of that “bank” money to your own reserves? I know some of you may have at least thought about it. I mean, how cool was it to just print or add money as you saw fit, so you could buy more stuff?