September 18, 2020 The S&P 500 Index declined 0.6% this week, while the U.S. dollar rallied and bonds were basically flat. Mega-cap tech shares continue to see profit taking. The NYSE FANG+ Index is down over -10% this month, after rising +21% in August and +14% in July. Under the surface, there was more evidence of capital rotation favoring cyclical...
September 11, 2020 Volatility tends to happen in clusters, and this week extended the wobbliness that emerged last week. Mega-cap tech shares fell on Friday for the sixth time in seven days, while global equities saw the first back-to-back weekly decline since March. Little-to-no progress in Washington for securing another round of stimulus weighed on sentiment. Now that stocks like...
September 5, 2020 Just as investors were feeling good about five consecutive months of steady gains, the stock market dealt a late-week reality check. Tech led the way down, with the Nasdaq recording its worst week since March. The S&P 500 ended the week -2.3% lower, the Dow fell -1.8% and the Nasdaq declined almost -4%. European and Asian equity...
It’s no secret Apple is on a roll. Still, the numbers are staggering. The iPhone maker’s shares have risen 57% year-to-date, making Apple Inc. worth just under $2 trillion. Allegations of unfair and anti-competitive actions have surfaced in a lawsuit against Apple by Epic Games. In the filing, the plaintiff asserts Apple Inc. “is bigger, more powerful, more entrenched, and...
Are we living in Tech Bubble Version 2.0? At this point, three stocks—Apple, Amazon and Microsoft—comprise about 16% of the S&P 500 and a third of the Nasdaq 100. Their combined value of $5 trillion is bigger than Germany’s entire economy. And the last time the “Big 3” were this expensive relative to free cash flow was during Tech Bubble...
Zoom Video Communications (ZM) is one of the hottest stocks of 2020. Most conventional ‘value’ investors have missed it, of course. They usually pass on high-growth names, preferring stocks with cheaper valuations. Don’t make this mistake. In a portfolio, the forest is more important than the trees. Using that prism, Zoom may offer investors the best of both worlds: hyper...
With all the coronavirus coverage, the tenor of the news flow has been unusually dour this year. That may explain the success of John Kransinki’s YouTube program, which only reports “good news.” It took just two months for the Some Good News (SGN) channel to amass over 2.5 million subscribers. Krasinski and his network of star pals created a series...
A low-cost index fund is the most sensible equity investment for the great majority of investors. - Warren Buffett What does Warren Buffett really think about the whole active versus passive investing debate? Anyone who follows Buffett knows he regularly endorses passive vehicles, such as the S&P 500 ETF Trust (SPY). However, Buffett also has a reputation as one of...
Fear and greed are timeless. So is the wisdom of Jesse Livermore. Jesse was the Wall Street legend who inspired Edwin Lefèvre’s fictional character in the 1923 classic, Reminiscences of a Stock Operator. Jesse was a gutsy trader. The kind who could thrive when most people shriveled. In 1929, Jesse not only correctly predicted the economic downturn, but also managed...
“Stay safe” has become a popular saying in The Age of COVID-19. Things are changing so fast, though, it’s been hard to keep up with all the new rules regarding what qualifies as “safe.” Example: welcome to Tampa, Tom Brady. While governments are busy rewriting public safety rules, ETF investors are also rethinking where to find “safety” in the market...
“Beware the Ides of March,” a soothsayer told Julius Caesar in Shakespeare’s famous play of the same name. Whether you believe in superstitions or not, March of 2020 will go down as a historic month on Wall Street. After peaking on February 19th, the S&P 500 fell 34% in just 23 trading days, marking the fastest bear market ever. Stocks...
Europeans once believed swans were only white. Then they discovered black swans in Australia. As investors, we continually face events that test our belief systems. Nicholas Nassim Taleb wrote an excellent book on this subject titled, The Black Swan. ‘Black swan’ events are unpredictable and often coincide with major turning points. Recently, a pair of black swans converged, sparking a...