Category Archives: American Listed Stock

November 27th 2013 – Smashing through the wall of worry

There is a certain market doctrine that in order to rise stocks are meant to climb a “wall of worry”. Along with other immutable laws of free market economics this market has completely ignored this age old adage. Forget climbing any walls of worry. That is for wimps. This market just smashes through them!

Now that everyman and his dog are screaming to anyone listening to buy stocks, is it folly to stay out of this incredible move?

Perhaps. Perhaps not.

 

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26th November 2013 – Crash or correction – Shiller P/E crosses the all important 25

A running theme here at Spreadbet Magazine has been this market’s refusal to revert to the mean. Mean reversion is the quintessential characteristic of price movements but thanks to the hugely distortive effects of quantitative easing, today’s investors/traders/speculators seem largely to have forgotten this. At some point they will be reminded of it, but the question is will this be in the form of a crash or a correction?

As things stand now, I am going to bet on there being a correction, not a crash. I’m certainly not suggesting shorting this market, but rather waiting until a decent opportunity presents itself to get long again.

 

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19th November 2013 — No bubble here Part II

As if we needed it, last week we were served further evidence of the precarious position policy makers find themselves in and the poor state of journalism covering this crucial issue, which is likely to define several generations. This all took place in the events surrounding Janet Yellen’s confirmation hearing before the Senate Banking Committee and I am, of course, talking about how the Fed ever hopes to withdraw and unwind its Quantitative Easing programme.

The headlines after Yellen read her prepared remarks were what you’d expect in this “keep calm and carry on” world of ours – “Yellen sails through confirmation hearing”, “Yellen says imperative to promote strong recovery”, “Yellen says Fed has more work to do to promote recovery” etc etc.

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6th November 2013 — Twitter IPO — portent of a market top?

I’ve had half an eye on the Twitter IPO over the last month. The big ticket IPOs rarely interest me. They are generally too much of a coin flip. I didn’t care about Facebook, I was bored by Royal Mail’s market debut and as for Zynga – well anyone who plays Farmville deserves to be shot, in my opinion!

 

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17th October 2013 — Debt ceiling extended, taper back on, short stocks?!

If it wasn’t for the last minute, nothing would ever get done in American politics. For the third time in a row, a compromise was reached, seeing the debt ceiling temporarily extended, the government reopen and the crisis averted.

In reality, absolutely nothing of any substance was achieved last night, other than a further delaying of the inevitable. America’s structural deficit remains unchecked and the shutdown of the last few weeks will prove to be utterly pointless, as federal workers will receive back pay. The Federal Government is now permitted to continue borrowing until February 7th next year.

This might sound like we have four months to wait until the next installment of this never ending drama, but there are some potentially significant repercussions of what has happened in the last few days, which could have altered the landscape dramatically.

 

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