Archive for the ‘Topic’ Category

News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

Commodities Have Been Down So Long It May Be Time To Snap Them Up (Forbes)

The post-crisis years have not been good for real assets, the catchall term for commodities, energy, real estate and other investments based on selling real things instead of clever ideas.

A trader psychologist who consulted on Showtime's 'Billions' reveals the biggest mistake traders make (Business Insider)

Denise Shull is a decision coach and performance architect who consulted on Showtime’s BILLIONS for the Wendy Rhodes character, the in-house psychotherapist for Axelrod hedge fund.

China’s bitcoin traders are finding new ways to trade after an official clampdown (Quartz)

China’s central bank has stepped up oversight of bitcoin exchanges this year, leading major trading platforms to impose halts on withdrawals and other checks to appease the regulator.

Warning signs are piling up that the bull run in stocks is nearing an end (Business Insider)

If it feels like this bull market has been going on for a long time, that's because it has.

In fact, the current market rally, which has lasted 2002 trading days, is the longest one since the rally that preceded the 1929 stock market crash.

Goldman: 'Cognitive dissonance exists in the US stock market' (Yahoo Finance)

Goldman Sachs analysts believe investors and traders in the stock market are acting irrationally.

“Cognitive dissonance exists in the US stock market,” Goldman Sachs’ David Kostin said. “S&P 500 (^GSPC) is up 10% since the election despite negative [earnings per share] revisions from sell-side analysts.”

Solar Energy Production Hit a Record High in 2016, So What's Wrong With Solar Stocks? (Fool.com)

2016 was an amazing year for the solar industry overall, even if it wasn't great for solar stocks. GTM Research recently reported that its upcoming U.S. Solar Market Insight Report done with the Solar Energy Industries Association will reveal a 95% jump in installations last year to 14.6 GW.

This company's productivity soared after replacing 90% of employees with robots (Futurism)

It’s hard to argue against automation when statistics are clearly illustrating its potential. The latest evidence comes out of a Chinese factory in Dongguan City.

India: Investors
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Trump to Fill at Least Three Fed Positions: What Will the Trump Fed Look Like?

Courtesy of Mish.

In the election run-up, Donald Trump both praised and criticized higher interest rates, multiple times each way.

So what the heck does Trump want?

The only thing we are reasonably sure of is Trump prefers businessmen and women running the country instead of academics.

Conflicting Views

  • Nov. 3, 2015:  “Janet Yellen should have raised the rates. She’s not doing it because the Obama administration and the president doesn’t want her to.”
  • May 5, 2016 to CNBC:  “I am a low interest-rate person. If we raise interest rates and if the dollar starts getting too strong, we’re going to have some very major problems.
  • May 9, 2016: To The Wall Street Journal: “If interest rates went up, our economy is not doing well at all. And it’s going to hurt the economy very badly. If interest rates went up, it would be a disaster.”
  • Sept. 5, 2016: Asked about a potential rate increase in September, Mr. Trump said: “They’re keeping the rates down so that everything else doesn’t go down. We have a very false economy.  “At some point the rates are going to have to change. The only thing that is strong is the artificial stock market.”
  • Sept. 12, 2016: “The people that were hurt the worst (by low rates) are people that saved their money all their lives and thought they would live off their interests and those people are getting just absolutely creamed…. The interest rates are kept down by President Obama.” “It’s a tremendous problem for the country and we are talking about rates that are practically at zero.

Is that clear or what?

I am open to suggestions, but I believe the average person just might side with “or what?”

The Trump Fed

trump-fed

From the above statements, one would have to be a mind-reader or an insider to know what Trump wants.


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Merkel’s CDU/CSU Party Loses Lead in Two of Three Latest Polls: Coalition Math

Courtesy of Mish.

On February 3, polls showed German chancellor Angela Merkel is less popular than her opponent Martin Schulz. (See Merkel an Election Shoo-In? Nope, Think Again)

Nonetheless, Merkel supporters took comfort because Merkel’s CDU/CSU party was more popular than Shulz’s SPD party.

The latest polls have since taken that lead away.

On February 6 I noted The “Impossible” Happens in Germany. The “impossible” was a rise in support for SPD by 10 percentage points in 14 days.

A quick check now shows SPD is in the lead or tied in four of the eight most current polls, and in the lead in two of the three most recent polls.

Coalition Math

german-polls-2017-02-2

The above chart modified from Opinion Polling for the 2017 German Federal Election.

I typically discard early polls in favor of more recent ones. It’s hard to know where to draw the line. One can make a case for February 5, 6, 8, or even 10. The last three or four polls likely show the current state of affairs.


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Re-Questioning the Death of Buy & Hold Investing

 

Re-Questioning the Death of Buy & Hold Investing

Courtesy of Wade of Investing Caffeine

Article originally posted September 17, 2010: At the time this original article was written, the Dow Jones Industrial Average was hovering around 11,500. Last week, the Dow closed at 20,624. Sure there have been plenty of ups and downs since 2010, but as I suggested seven years ago, perhaps “buy and hold” still is not dead today?

In the midst of the so-called “Lost Decade,” pundits continue to talk about the death of “buy and hold” (B&H) investing. I guess it probably makes sense to define B&H first before discussing it, but like most amorphous financial concepts, there is no clear cut definition. According to some strict B&H interpreters, B&H means buy and hold forever (i.e., buy today and carry to your grave). For other more forgiving Wall Street lexicon analysts, B&H could mean a multi-year timeframe. However, with the advent of high frequency trading (HFT) and supercomputers, the speed of trading has only accelerated further to milliseconds, microseconds, and even nanoseconds. Pretty soon B&H will be considered buying a stock and holding it for a day! Average mutual fund turnover (holding periods) has already declined from about 6 years in the 1950s to about 11 months in the 2000s according to John Bogle.

Technology and the lower costs associated with trading advancements arre obviously a key driver to shortened investment horizons, but even after these developments, professionals success in beating the market is less clear. Passive gurus Burton Malkiel and John Bogle have consistently asserted that 75% or more of professional money managers underperform benchmarks and passive investment vehicles (e.g., index funds and exchange traded funds).

This is not the first time that B&H has been held for dead. For example, BusinessWeek ran an article in August 1979 entitled The Death of Equities (see Magazine Cover article)which aimed to…
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How Many Euro Crises Will This Make? It’s Getting Hard To Keep Track

Courtesy of John Rubino.

Every few years, it seems, one or another mismanaged eurozone country falls into one or another kind of crisis. This leads to speculation about the end of the common currency, which in turn spooks the global financial markets. Then the ECB conjures another trillion euros out of thin air, buys up and/or guarantees all the offending country’s bonds, and calm returns for a while.

At least, that’s how it’s gone in the past.

The latest crisis has more than the usual number of flash-points and could, therefore, be something new and different. Currently:

Greece. This charming but apparently ungovernable country only got into the eurozone in the first place because its corrupt leaders conspired with Goldman Sachs to hide the true condition of the government’s finances. It quickly blew up and has been on intensive care ever since. Now the latest bailout has become deal-breakingly messy:

‘From bad to worse’: Greece hurtles towards a final reckoning

(Guardian) – With another bailout set to bring more cuts, quitting the euro is back on the agenda.

The country’s epic struggle to avert bankruptcy should have been settled when Athens received €110bn in aid – the biggest financial rescue programme in global history – from the EU and International Monetary Fund in May 2010. Instead, three bailouts later, it is still wrangling over the terms of the latest €86bn emergency loan package, with lenders also at loggerheads and diplomats no longer talking of a can, but rather a bomb, being kicked down the road. Default looms if a €7.4bn debt repayment – money owed mostly to the European Central Bank – is not honoured in July.

Amid the uncertainty, volatility has returned to the markets. So, too, has fear, with an estimated €2.2bn being withdrawn from banks by panic-stricken depositors since the beginning of the year. With talk of Greece’s exit from the euro being heard again, farmers, trade unions and other sectors enraged by the eviscerating effects of austerity have once more come out in protest.

This is the irony of Syriza, the leftwing party catapulted to power on a ticket to “tear up” the hated bailout accords widely blamed for extraordinary levels of Greek unemployment, poverty and emigration. Two years into office it has instead overseen the most punishing austerity measures to date, slashing public-sector salaries and pensions, cutting


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“Italeave” Odds Increase: Rebellion in Italy, Matteo Renzi’s PD Party to Split

Courtesy of Mish.

The Financial Times reports on the Rebellion that Threatens to Split Italy’s Democratic Party.

Eurointelligence goes one further and suggests it’s a done deal, not just a threat.

The immediate impact would be a loss of 6 percentage points, or more, support for PD, putting Beppe Grillo’s Five Star Movement solidly in the lead.

pd-split

In national polls, the PD is only slightly ahead of the Five Star Movement, an anti-establishment party which has called for a referendum on the euro. Any PD defection could make the difference in the next Italian general election, due within a year at the latest.

In the dissidents’ minds, Mr. Renzi is tilting the PD too much towards the centre in recent years, with reformist, pro-business policies that disconnected the party from the struggles of ordinary people. There are echoes of the message that drove Bernie Sanders’ Democratic primary campaign in the US and Jeremy Corbyn’s rise to the helm of Britain’s Labour party.

Walter Veltroni, who help created the PD as a mesh between former communists and left-leaning former Christian Democrats in 2007, warned that intraparty divisions had always been the “demon” of the Italian left.

But for the PD dissidents, the fault in any split would lie squarely with Mr. Renzi. And most of their fans in Testaccio, are convinced the divorce is inevitable.

“Renzi’s relationship with the country is broken. Globalization makes you feel like you are in the ocean, without seeing any docks, peers or the shore. The left needs to offer protection. People want to swim in a lake,” says Piero Lacorazza, a local politician and environmental campaigner from Basilicata.

Damage Assessment

Via email, Eurointellingence comments that a split is certain, and offers this damage assessment.

La Repubblica reports this morning that Renzi’s most formidable opponents – Enrico Rossi, governor of Tuscany; Michele Emiliano, governor of Puglia; and Roberto Speranza, the former PD leader of the chamber of deputies – co-authored a note last night after the Congress in which they said that Renzi had chosen division.

The split is now a done deal. Corriere della Sera reports that Bersani, Speranza, and other rebels, will not attend tomorrow’s meeting of the PD’s leadership, which will formally set up a commission to prepare for the leadership contest.

One of Renzi’s most quoted statements in


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How computers broke science – and what we can do to fix it

 

How computers broke science – and what we can do to fix it

Courtesy of Ben Marwick, University of Washington

Reproducibility is one of the cornerstones of science. Made popular by British scientist Robert Boyle in the 1660s, the idea is that a discovery should be reproducible before being accepted as scientific knowledge.

In essence, you should be able to produce the same results I did if you follow the method I describe when announcing my discovery in a scholarly publication. For example, if researchers can reproduce the effectiveness of a new drug at treating a disease, that’s a good sign it could work for all sufferers of the disease. If not, we’re left wondering what accident or mistake produced the original favorable result, and would doubt the drug’s usefulness.

For most of the history of science, researchers have reported their methods in a way that enabled independent reproduction of their results. But, since the introduction of the personal computer – and the point-and-click software programs that have evolved to make it more user-friendly – reproducibility of much research has become questionable, if not impossible. Too much of the research process is now shrouded by the opaque use of computers that many researchers have come to depend on. This makes it almost impossible for an outsider to recreate their results.

Recently, several groups have proposed similar solutions to this problem. Together they would break scientific data out of the black box of unrecorded computer manipulations so independent readers can again critically assess and reproduce results. Researchers, the public, and science itself would benefit.

Computers wrangle the data, but also obscure it

Statistician Victoria Stodden has described the unique place personal computers hold in the history of science. They’re not just an instrument – like a telescope or microscope – that enables new research. The computer is revolutionary in a different way; it’s a tiny factory for producing all kinds of new “scopes” to see new patterns in scientific data.

It’s hard to find a modern researcher who works without a computer, even in fields that aren’t intensely quantitative. Ecologists use computers to simulate the effect of disasters on animal populations. Biologists use computers to search massive amounts…
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News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

Global Economy Week Ahead: Eurozone PMI, U.S. Home Sales, Fed Minutes (The Wall Street Journal)

This week, housing data from the U.S. will offer clues on how a pickup in mortgage rates has affected the market, surveys of purchasing managers will give an early look at how the eurozone economy is holding up in February, and the Bank of Korea releases a policy statement.

China, Hong Kong stocks get off to fast start on slow trading day (Market Watch)

Equity markets in Japan and Australia started the week slightly lower, while yields on sovereign bonds fell in Asia trading Monday.

Japan's Trade Deficit Widens on Drop in Car Exports, Oil Imports (Bloomberg)

Japan posted a bigger-than-forecast trade deficit in January as auto exports declined and energy import costs increased.

U.K. Factory Orders Rise to Highest Level in Two Years, CBI Says (Bloomberg)

Orders at U.K. factories climbed at the fastest pace in two years this month, according to the Confederation of British Industry.

Oil prices push higher, lifted by decline in Saudi exports (Market Watch)

Crude futures moved higher on Monday, lifted by fresh data showing a decline in Saudi Arabian oil exports, which helped soothe markets some after a U.S. rig-count spike last week.

There's a simple reason the percentage of people owning a home is at a historic low (Business Insider)

If it feels as if your parents could afford to buy a house when they were your age, and you can't, you're not alone.

Global arms trade hits highest level since end of Cold War (CNN)

The spike was fueled by conflicts in the Middle East, tensions in the South China Sea and the perceived threat from Russia to its neighbors, according to a study by the Stockholm International Peace Research Institute (SIPRI).

London House Prices Post Biggest Annual Decline in Six Years (Bloomberg)

The average asking price in the capital fell 0.4 percent to 641,116 pounds ($797,000) this month from a year earlier, the first annual decline since April 2011, property website Rightmove Plc said on Monday.


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Why Did SEC Acting Chair Take an Ax to Enforcement Unit’s Subpoena Power?

Courtesy of Pam Martens.

By James A. Kidney: February 20, 2017

The Trump administration assault on investor protections put in place following the 2007-08 financial crisis continues apace.  The war on investors takes place in arenas both large and small.

The large issues get the attention, of course.  These include repeal of much of the Dodd-Frank law and regulations of the biggest Wall Street banks, limiting or eliminating the Consumer Financial Protection Bureau, which actually helps individual customers abused by giant financial institutions, and preventing adoption of fiduciary standards for financial professionals recommending securities that line their pockets but are risky to customers.

But Washington is not merely a swamp of self-interest with large, highly visible alligators munching on small fish to satisfy their insatiable greed.  Another apt metaphor is a field of giant weeds — weeds of rules, processes and procedures that can be manipulated for the interests of the Fat Cats.

These weeds are everywhere in Washington. Whether your particular self-interest lies in financial dealings regulated by the Federal Reserve and the Securities and Exchange Commission, looser regulations at the Environmental Protection Agency, exercising greater control of your employees by removing Labor Department regulations, or a host of other rules, processes and procedures, powerful interests with highly paid lawyers can push back easily against the much-maligned bureaucracy every day.

This is especially the case when there is one-party government and the president appoints those at the center of the oligarchy to head government agencies, as is true today.



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What if brokerages graded their customers’ trading?

 

What if brokerages graded their customers’ trading?

Courtesy of 

This is fascinating. My pal Larry Swedroe of Buckingham Strategic Wealth looks at the first study of its kind – an online brokerage informed 1500 of its customers about whether or not the trades they were doing added any value. Note that this stands in direct opposition of the goals of online brokerages – to encourage more, not less activity. Brokers are only required to issue statements of positions, balances, activity, etc – not judgments.

But what if they did? Now we know – people are smart and make good decisions when the truth is put in their faces:

The reports showed investors their last year’s returns, costs, their current level of risk and their portfolio diversification. The test lasted 18 months. All the investors in their sample traded heavily, with an average annual turnover of well above 100% and a median turnover of 98%.

It’s important to note that survey participants stated they did not use their account as “play money accounts,” with 72% of participants reporting that the account associated with the survey is their main securities account. Only 3% said they had a short-term investment horizon. The authors found that after receiving the feedback reports:

  • Investors trade less
  • Investors diversify more
  • Investors earn higher risk-adjusted returns
  • The effects become stronger over time

There was another interesting result. Prior research has shown that individual investor learning in investment matters is mainly driven through attrition—investors who learn about their inferior investment skills stop trading.

The vast majority of people, by definition, will not be adding value to their own accounts through concentrated bets or extremely high turnover. This isn’t up for debate, it’s a fact.

But now we know how people react when provided concrete, personalized evidence of this. Only the most deluded individual investor would look at this evidence and continue to blue-pill themselves with the fantasy.

Swedroe: Investors Respond To Feedback (ETF.com)





 
 
 

Zero Hedge

Don't Short This Dog, Report 20 Feb, 2017

Courtesy of ZeroHedge. View original post here.

This week, the prices of the metals mostly moved sideways. There was a rise on Thursday but it corrected back to basically unchanged on Friday.

This will again be a brief Report, as yesterday was a holiday in the US.

Below, we will show the only true picture of the gold and silver supply and demand fundamentals. But first, the price and ratio charts.

The Prices of Gold and Silver

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved sideways this week.

The Ratio of the Gold Price to the Silver Price

For each metal, we w...



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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Commodities Have Been Down So Long It May Be Time To Snap Them Up (Forbes)

The post-crisis years have not been good for real assets, the catchall term for commodities, energy, real estate and other investments based on selling real things instead of clever ideas.

A trader psychologist who consulted on Showtime's 'Billions' reveals the biggest mistake traders make (Business Insider)

Denise Shull is a decision coach and performance architect who consulted on Showtime’s&nbs...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Commodities Have Been Down So Long It May Be Time To Snap Them Up (Forbes)

The post-crisis years have not been good for real assets, the catchall term for commodities, energy, real estate and other investments based on selling real things instead of clever ideas.

A trader psychologist who consulted on Showtime's 'Billions' reveals the biggest mistake traders make (Business Insider)

Denise Shull is a decision coach and performance architect who consulted on Showtime’s&nbs...



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ValueWalk

GNC Suspends Dividend: An Important Lesson on Dividend Safety

By Simply Safe Dividends. Originally published at ValueWalk.

GNC (GNC) surprised many income investors when management recently announced that the company’s dividend will be suspended.

After all, GNC has been in business for more than 80 years, maintains a payout ratio below 40%, generates solid free cash flow, and even increased its dividend every year since it began paying one in 2012 – including an 11% boost just last year.

These are some of the qualities we look for when evaluating companies for our Conservative Retirees dividend portfolio.

None of these strengths mattered, however.

GNC’s double-digit yield was wiped out immediately, adding insult to injury after the stock’s 70%+ decline over the past year.

...

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OpTrader

Swing trading portfolio - week of February 20th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Chart School

Weekly Market Recap Feb 19, 2017

Courtesy of Blain.

The week that was…

The never ending rally continued at pace this last week, with solid gains Mon thru Wed, followed by some quiet consolidation the final 2 days of the week.   This action simply is a grind for any remaining bears to have to deal with as there is no relent.  As happened late in the prior week (“phenomenal” was the word), indexes rallied Wednesday as President Donald Trump said a “massive” tax plan would be coming in the “not-too-distant future.”  Yellen testified and Donald showed restraint in not tweeting about her.

“Even though we have social unrest and building geopolitical tensions, the market refuses to fall in any meaningful fashion, which means there remains a very strong underlying bid in the market,” said Adam S...



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Digital Currencies

How to Use, Trade, Store and Invest in Bitcoin Digital Assets - Step by Step, Part 1

By Reggie Middleton

(Originally published on Zero Hedge)

I will teach novices and experts alike how to fit Bitcoin into an investment portfolio safely and with the optimum risk-adjusted potential - along with step-by-step guides, instructions and tutorials.

This first part of the series starts with the basics, obtaining and managing your bitcoin.

What is Bitcoin?

First off, we need to know what Bitcoin is since most media pundits and even experienced financial types truly do not know. Bitcoin (capital "B") is a protocol driven network (very similar to that other popular protocol-based network, the Internet). This network is a blank tapestry upon which smart and creative actors can paint a cornucopia of applications (just like applicat...



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Kimble Charting Solutions

Fear Indicator; Hitting highest levels in history, says Joe Friday

Courtesy of Chris Kimble.

Markets have been on a steady rise and the same can be said for Inverse Fear ETF (XIV). Below looks at Inverse Fear ETF (XIV) since the lows in 2011.

CLICK ON CHART TO ENLARGE

What a difference a year can make! One year ago this week, XIV was testing rising channel support, as relative momentum was hitting levels last seen at the 2011 lows.

...



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Members' Corner

Save Your Relationship?

Courtesy of Nattering Naybob.

Once again it's "in the Toilet Thursday" or "Thursday's in the Loo".

Our last episode How to Poop At Work? answered the question, what to do when your at a big fancy pants meeting, when out of nowhere, you need to download a brown load?

This week's installment, Save Your Relationship, demonstrates that people will do just about anything to save their relationshits...

...

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Mapping The Market

NSA May Be Withholding Intel from President Trump

By Jean Luc

These GOP guys were so worried about Hillary's email server and now we find out that we had something close to a Russian mole in the White House. In the meantime, Trump keeps on using his unsecured phone, had high level conversation in his resort in front of dinner guests! It's getting so bad that rumors are now circulating that the NSA is not sharing information with the WH:

NSA May Be Withholding Intel from President Trump

By 

….Our spies have had enough of these shady Russian connections—and they are starting to push back….In light of this, and out of worries about the White House’s ability to keep secrets, some of our spy agencies have begun withholding intelligence fro...



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Promotions

Phil's Stock World's Las Vegas Conference!

Learn option strategies and how to be the house and not the gambler. That's especially apropos since we'll be in Vegas....

Join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017            

Beginning Time:  9:30 to 10:00 am Sunday morning

Location: Caesars Palace in Las Vegas

Notes

Caesars has offered us rooms for $189 on Saturday night and $129 for Sunday night but rooms are limited at that price.

So, if you are planning on being in Vegas (Highly Recommended!), please sign up as soon as possible by sending...



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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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