Time is running out on 2019. Looking back, Q4 of 2018 was a rough ride for equity investors. Wise to book profits before year-end this time around? Perhaps, but don’t be too hasty hitting the sell button. There are a host of reasons why the S&P 500 will likely see better performance in this year’s fourth quarter. Market Seasonality Recency...
Lawyers are loving Johnson & Johnson (J&J) in 2019. Investors… not so much. J&J shares have lagged amid mounting legal woes. The health care giant faces over 100,000 lawsuits in total, which some analysts estimate may cost over $20 billion to settle. However, the litany of bad news may provide an excellent opportunity for investors to buy a world-class company...
In the asset management space, discount brokers play a middleman role. They link consumers to exchanges where transactions are completed. Here’s a look at how three major brokerage stocks have performed over the last five years compared to three major exchanges. Source: Bloomberg Why have the exchanges outperformed so dramatically? Exchanges are special businesses with unique competitive advantages and powerful...
Bravado can be an asset in certain domains. For example, President Trump is known for being bold. That probably aided his ascent as a real estate developer. And as President, Mr. Trump is all about projecting confidence, as the following video montage demonstrates. Bravado is also common on Wall Street. A lot of super-achievers work there. Many of them sailed...
The active versus passive investing debate is relentless. If you do a simple cost/benefit analysis, advocates of passive investing have compelling facts on their side. Per the latest SPIVA scorecard, 82% of U.S. large-cap equity mutual funds lagged the S&P 500 index over the last five years. Expense ratios for active mutual funds typically range between 0.5% to 0.75%, while...
In a headline driven, volatile market like we’ve been traversing, it’s easy for investors to try to overcorrect their positioning. I’m referring to the whole “risk on, risk off” mentality. A casual market observer probably sees a binary narrative. It seems like everything rides on a U.S./China trade deal. President Trump sends a negative tweet about China, the market plummets...
After Howard Schultz resigned as Starbucks' CEO last June, I profiled the company's investment merits in a post. "It's coffee almost never goes on sale, but the stock is now," I wrote. Starbucks shares have since returned 79%, while the S&P 500 is up 8% over the same period. Starbucks bottomed near $50 around the same time an expanded share...
If you want to know if we're still in a bull market, don't ask Alexa. Just watch Amazon's stock price. Amazon shares closed on September 4, 2018 at 2,039. Almost a year later, that remains the all-time high. If it were any other stock, this sort of consolidation wouldn't be noteworthy. But Amazon isn't just another stock—it's a market bellwether...
Markets cheered when the Trump Administration announced on Tuesday it would delay new tariffs on certain consumer products. Optimism quickly evaporated on Wednesday, though, after a spate of weak economic data stoked fears of a global economic slowdown. It’s a great illustration of why markets are volatile right now. It’s all about one word: uncertainty. Investors are in an environment...
The trade war between the U.S. and China escalated yesterday. This led to the steepest single-day decline for U.S. stocks so far in 2019. In the following video, I discuss political and economic risks to the stock market, and our strategy for hedging those risks. This material is not intended to be relied upon as a forecast, research or investment...
Procter & Gamble (P&G) just reported its best organic sales result in over a decade. The Cincinnati-based maker of everyday consumer goods saw revenue rise 7%, bolstered by pricing and market share gains in the company's health care segment. “Overall, we can’t emphasize enough how impressive the top-line was this quarter, with P&G proving it is one of the best...
I recently interviewed Wall Street Journal columnist Joseph Sternberg about his provocative new book, The Theft of a Decade: How the Baby Boomers Stole the Millennials’ Economic Future. Since the 1980s, the Baby Boom generation has overseen America’s political agenda. However, Boomers will soon share their seat at the throne of public policy. The number of adult Millennials will reach...