by Market Shadows - April 29th, 2016 1:15 am
Financial Markets and Economy
A bull market that has been derided as fake, doomed and history’s most-hated just earned a new title: the second-longest ever.
Dear Prudence – A Warning In Today’s GDP Growth Data (Value Walk)
While there is no doubt that patience is a virtue for investors, exercising prudence is equally important. In our prior article “Limiting Losses”, we examined how taking prudent measures, at certain times, can enhance your ability to create wealth over the long-term for your clients. Despite basic math and historical evidence proving its usefulness, investors typically ignore prudence, especially when it is required most. The siren’s song of a rallying market inevitably proves too compelling for many investors.
The Federal Reserve bought $7.96 billion of agency mortgage-backed securities in the week from Apr. 21 to Apr. 27, compared with $7.407 billion purchased the previous week, the New York Federal Reserve Bank said on Thursday.
On October 23, 1996, the day AT&T announced that John Walter, an industry outsider, would be named CEO, the company’s market valuation dropped by $4 billion. In his book Searching for a Corporate Savior, Rakesh Khurana at Harvard Business School noted that this negative market reaction became a self-fulfilling prophecy, causing the board of directors and other top executives to lose confidence in Walter, and leading to his dismissal only nine months after assuming office.
U.S. Corporate Profits on Pace for Third Straight Decline (Wall Street Journal)
U.S. corporate profits, weighed down by the energy slump and slowing global growth, are set to decline for the third straight quarter in the longest slide in earnings since the financial crisis.
Turning 30 just got a lot scarier.
This Economy Isn't Too Disappointing (Bloomberg View)
Were you disappointed by
by ilene - April 28th, 2016 2:13 pm
Move over God, the religion Facebook is in.
Courtesy of Joshua M Brown
Facebook now has 1.65 billion users spending an average of 50 minutes a day on its platforms (FB, Messenger, Instagram, Whatsapp, etc). The amount of time spent in devotion of our online selves now rivals the amount of time humanity spends in worship of the major religions. Can the Catholic Church claim a billion and a half people doing anything for almost an hour a day in service to it? Can Islam? Buddhism may come close, or Hinduism, but probably not really, should you calculate the actual minutes of the day and the actual amount of worshippers.
But we love ourselves and sharing facets of ourselves with the world. Projecting the Us that’s fit for the consumption of others. Or some better, smarter, richer, sexier version of ourselves. It’s just a snapshot or a line of text, we have all the control in the world when we reveal in small doses.
Facebook’s market cap is $330 billion as a result of its explosive open to new highs this morning. It’s trading at more than 13x sales and is now one of the most valuable companies in the history of planet earth. You can say it shouldn’t be for reasons A, B, and C – and these would be rational opinions. But has any company before ever monopolized this much of humanity’s time and attention, en masse, around the world? Will any subsequent company be able to do so any time soon?
The Super Bowl is the most widely watched event in the world, and it’s because roughly 100 million people watch it. Facebook wouldn’t get out of bed for that kind of nightly audience. And think of the dollar amounts that the Super Bowl commands for thirty-second ads. Facebook’s usage is more than 10X the Super Bowl and it’s 24 / 7 / 365.
And here’s the best part – no one expects to be paid anything to create content for the platform. We’re the football players. We’re the announcers. We’re the cheerleaders. We do it for free, out of the sheer joy we experience from the exposition of ourselves. And we never get bored of it.
by ilene - April 28th, 2016 2:06 pm
One of Phil's strategies made $1,500 in 30 minutes during yesterday's Live Trading Webinar!
(Don't miss next week's webinar in real-time. Get LIVE access to Phil's Weekly Webinars by joining us at Phil's Stock World — click here!)
00:01:13 Tempting Tuesday – Cash! Cash, cash, cash and more cash!! Trade Idea
00:08:14 Trade Ideas
00:14:47 AAPL: ’13 ’14 ’15 stock of the year. Product Cycle. Charts. Trade Ideas
00:34:14 AAPL: Spread. Trade Idea
00:38:36 AAPL: Long Term Portfolio
00:42:21 Checking on the Markets: YG, SI, DOW, NASDAQ, TWTR, RUSSEL, NIKKEI, AAPL, BA, CL, WYNN, AMZN, TSLA, NG, VIX, TLT, XLF
00:46:20 Top Trade: TWTR
00:54:14 FOMC Meeting
00:59:21 GSPC comparing to UUP
01:01:48 Trade Ideas
01:14:26 Checking on the Markets after FOMC Meeting: YG, SI, DOW, NASDAQ, TWTR, RUSSEL, NIKKEI, AAPL, BA, CL, WYNN, AMZN, TSLA, NG, VIX, TLT
01:23:32 More Trade Ideas….
by ilene - April 28th, 2016 1:51 pm
Courtesy of Joshua M Brown
So where do we go from here? As most investors have been caught offsides at some or multiple points over the past eight months, the impulse to do little is understandable. We are of a contrary view that volatility is bringing excellent opportunities, some of which we discuss below. We believe that the past few months of increasing complexity are here to stay and now is a more important time than ever to employ active portfolio management to take advantage of this volatility. There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies.
Long-time readers know that I’m a big fan of Dan Loeb (Third Point) and his investor commentary. He’s razor-sharp and says what he thinks. You can read the entire letter to his investors at the link above.
About a thousand hedge funds closed their doors last year and almost all of the name-brand big funds have started off the year with huge losses or redemptions or both. The fact that Loeb thinks it is only the first innings of this is telling. You can get some more context here:
by Market Shadows - April 28th, 2016 11:24 am
Financial Markets and Economy
The "golden age" of stock market returns is over.
Bank of Japan Keeps Policy Unchanged; Yen Rises (Wall Street Journal)
The Bank of Japan on Thursday brushed aside calls for additional stimulus despite new data that showed prices falling, a decision that quickly sent the yen up and Japanese stocks down.
The US economy was weaker than expected in the first quarter (Business Insider)
The US economy slowed more than expected in the first quarter.
How to Protect Yourself from Deutsche Bank’s Gold and Silver Market Rigging (Wall Street Examiner)
Deutsche Bank AG just can’t seem to get out of its own way.
The world’s biggest financial market has shrunk by 20 percent during the past year and a half.
The European Central Bank's current policy aimed at spurring inflation should have the desired effect in the second half of the year, ECB Governing Council member Ewald Nowotny said on Thursday, but it is not possible to say exactly when.
Here are reactions to the news to the U.S. economy grew 0.5% in the first quarter.
“We should all jump off cliffs as often as possible,” advisesGordon Ritter, a founder and general partner of Silicon Valley venture capital firm Emergence Capital. Ritter gave the keynote speech at Princeton University’s Keller Center’s Innovation Forum in February and that was some of his advice to aspiring entrepreneurs. The Forum is designed to showcase research that has the potential to be commercialized. Teams compete to present their research in three-minute pitches to an audience that includes angel investors, venture capitalists, staff, faculty, students and members of Princeton’s entrepreneurial community.
by Pharmboy - April 28th, 2016 12:24 am
Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.
Remember this? It was Monday. PRGO is down from around $130 to under $100 since I started following it LAST WEEK. That's down almost 25% in a week, and almost 50% in the last year. So I wrote,
"Perrigo CEO Joseph Papa leaves Perrigo (PRGO) to lead Valeant (VRX) while PRGO issues a warning about missing earnings expectations. Not surprisingly, PRGO stock plummeted today.
Robert Ingram, Chairman of the [Valeant] Board, stated, "The Board has conducted a thorough search process and believes that Joe is the ideal leader for Valeant at this time. He has a strong shareholder orientation, a background in science, and an unmatched track record of accomplishments, highlighted by his ability to lead companies through times of transition and drive excellence across commercial, manufacturing and R&D platforms. In addition, fostering an ethical culture and creating opportunities for professional development have always been high priorities for Joe, and we look forward to Joe's arrival at Valeant" (Valeant names Papa CEO after he resigns from Perrigo).
"Reuters reports that Mr. Shareholder Orientation became 'well-known on Wall Street last year when Dublin-based Perrigo rebuffed a $26 billion takeover by Mylan NV, the largest-ever hostile bid decided by a shareholder vote.' Perrigo's market cap has now dropped to around $14.2 billion [now $13.9 billion] — down over 18% today alone -- making Papa look foolish for rejecting that buyout offer."
Papa’s departure comes just months after he successfully beat back a $26 billion hostile takeover bid from Mylan spearheading a campaign that ultimately persuaded shareholders to reject Mylan’s bid.
Since then, though, Perrigo has reported disappointing quarterly results and slashed its outlook (Perrigo shares tumble as CEO leaves for Valeant, guidance cut again).
While many were congratulating VRX for recruiting Papa to be its CEO, Jim Cramer wrote,
Perrigo's (PRGO) heartbreaking. How could Joe Papa, the man who was so intertwined with Perrigo for so long, the man who came on Mad Money and argued there was so much more value to the company than the price Mylan put on it — some 80 points higher than where