Investment Ideas and Timing
June 22, 2009
“Timing is everything” goes the old adage. But all investors and traders know that timing an entry point or exit point of an investment idea and strategy is like predicting the weather without sophisticated radar equipment. In fact it might be more difficult.
Why? Not only because the fundamentals these days are enormously complicated, whether we are speaking of the stock markets, the bond markets, or the commodities markets, but because there are so many factors beyond our control and knowledge. Read more
The BRICs Are On The Move!
June 20, 2009
In the midst of the current economic and financial crisis the world is radically changing. Comparisons are constantly being made between the collapse of the global economy that is now being experienced and the collapse the world went through in the 1930s. Whereas most of the discussion has limited itself to the extent of the downturn and the methods being used by policymakers to avoid a repeat of the severity of the earlier depression, I would like to focus on another area in which comparisons can be made. The specific area I would like to focus upon is the relative shifts that are taking place in economic and financial power in the world. Read more
Structural Changes in the Economy, Unemployment, and Inflation
June 19, 2009
A new concern about the economy has surfaced recently. This new concern has to do with the changing structure of the economy and the impact this change might have on the outcome of government policy.
Specifically, the argument is that the United States economy, and that of the world, is currently going through a transitional change that only occurs once or twice every century. This is the transition that takes place in the productive structure of the economy—a sort of “tipping point”. Read more
Stocks For An Economic Recovery – Healthcare
June 18, 2009
The medical equipment and supplies sub-sector of health care has come under significant pressure in the last 9 months or so. Big names such as Stryker Corp. [SYK: 48.73, -0.09 (-0.18%)], Zimmer Holdings Inc. [ZMH: 56.92, +0.06 (+0.11%)], and Medtronic Inc. [MDT: 39.62, +0.01 (+0.03%)] are trading at levels we have not seen in years. The whole aura of health care being “recession resistant” or “recession proof” is now thrown away and is an old folktale. Although these economic times are pretty much unprecedented, one thing is for certain: there has really been no safe place to hide in health care, except maybe to the likes of generic drug manufacturers such as Teva Pharmaceutical Industries [TEVA: 52.72, -0.32 (-0.60%)] or Mylan Inc. [MYL: 17.55, +0.12 (+0.69%)]. Read more
BRIC, The Dollar, and U. S. Monetary Policy
June 17, 2009
Over the past several months I have written regularly that the value of the United States dollar will decline over an extended period of time. The basic argument for this is that over the past forty years or so, any country that has run excessive governmental budget deficits and has not had an independent central bank has seen the value of its currency come under pressure in international financial markets. During this time, country after country has had to regain discipline over its fiscal affairs and see to it that its central bank acted more independently of the government’s budgetary affairs. Read more
A Tipping Point?
June 17, 2009
Almost everyone is looking for a tipping point. At this time we are looking for signs that the decline in the economy and in the financial markets is lessening and that we might be somewhere near the bottom. If this is the case then can the turn to recovery be far behind? Read more
When Will the Banks Start Lending Again?
June 15, 2009
Prices Continue to Rise
June 14, 2009
“The Labor Department reported that prices received by producers of finished goods rose 0.3 percent last month, further blunting the prospect that the economy was veering into a vicious cycle of lower prices and lower wages known as deflation.” (See http://www.nytimes.com/2009/05/15/business/economy/15econ.html?hp.) Analysts continue to be amazed that we have not yet moved into a deflationary spiral, given the weakness in the economy. Read more
Restaurant Stocks: A Lot of Hot Air
June 12, 2009
Out of the restaurant companies that I am covering, 3 of the names were on my radar screen late last year, with a formal recommendation of Chipotle’s “B” [[CMG-B]] shares at around $45 per share in my Top 5 Stocks for 2009 article. Read more
The Fed’s Quantitative Easing Goes Forward
June 11, 2009
Lots of transactions went on in central banking over the past month or so, not only in the United States but in the UK and Europe. Quantitative easing is the game and, at least, the central bankers are getting more and more comfortable with this. Read more
