Forget the old adage “When the U.S. sneezes, the world catches a cold.”  Friday’s solid employment report shows the U.S. economy — the world’s largest by a considerable margin — to be faring reasonably well. The new adage: “When China sneezes, the world catches a cold.” China’s economy, which recently overtook Japan’s as the world’s second largest, has been slowing throughout the first half of 2013. That slowdown is wreaking havoc on many emerging economies.#-ad_banner-# The sharp pullback in places like Brazil, Australia, Turkey and elsewhere should be… Read More

Forget the old adage “When the U.S. sneezes, the world catches a cold.”  Friday’s solid employment report shows the U.S. economy — the world’s largest by a considerable margin — to be faring reasonably well. The new adage: “When China sneezes, the world catches a cold.” China’s economy, which recently overtook Japan’s as the world’s second largest, has been slowing throughout the first half of 2013. That slowdown is wreaking havoc on many emerging economies.#-ad_banner-# The sharp pullback in places like Brazil, Australia, Turkey and elsewhere should be seen as opening for investors that have been awaiting better valuations in these markets. Indeed, the forward earnings multiple for many of these countries’ stock markets has been drifting ever lower, creating a valuation gap with U.S. stock markets that, in some instances, approaches 40%. Still, investors need to know that these markets can surely fall lower, so it’s crucial to take the long view with investments in Latin America, Asia, Eastern Europe and Africa. If… Read More

Forget the old adage “When the U.S. sneezes, the world catches a cold.”  Friday’s solid employment report shows the U.S. economy — the world’s largest by a considerable margin — to be faring reasonably well. The new adage: “When China sneezes, the world catches a cold.” China’s economy, which recently overtook Japan’s as the world’s second largest, has been slowing throughout the first half of 2013. That slowdown is wreaking havoc on many emerging economies.#-ad_banner-# The sharp pullback in places like Brazil, Australia, Turkey and elsewhere should be… Read More

Forget the old adage “When the U.S. sneezes, the world catches a cold.”  Friday’s solid employment report shows the U.S. economy — the world’s largest by a considerable margin — to be faring reasonably well. The new adage: “When China sneezes, the world catches a cold.” China’s economy, which recently overtook Japan’s as the world’s second largest, has been slowing throughout the first half of 2013. That slowdown is wreaking havoc on many emerging economies.#-ad_banner-# The sharp pullback in places like Brazil, Australia, Turkey and elsewhere should be seen as opening for investors that have been awaiting better valuations in these markets. Indeed, the forward earnings multiple for many of these countries’ stock markets has been drifting ever lower, creating a valuation gap with U.S. stock markets that, in some instances, approaches 40%. Still, investors need to know that these markets can surely fall lower, so it’s crucial to take the long view with investments in Latin America, Asia, Eastern Europe and Africa. If… Read More

One of the biggest investment stories of 2013 has surely been the ongoing slump in shares of Apple (Nasdaq: AAPL), which have fallen 21% this year after falling by a similar amount in the final months of 2012. Surprisingly, Apple doesn’t have much company. Only eight companies in the S&P 500 have by 20% or more in the first half of 2013, which is an unusually small percentage. A rising tide has surely lifted (almost all boats) in this extended… Read More

One of the biggest investment stories of 2013 has surely been the ongoing slump in shares of Apple (Nasdaq: AAPL), which have fallen 21% this year after falling by a similar amount in the final months of 2012. Surprisingly, Apple doesn’t have much company. Only eight companies in the S&P 500 have by 20% or more in the first half of 2013, which is an unusually small percentage. A rising tide has surely lifted (almost all boats) in this extended bull rally. Still, it’s helpful to focus on companies with broken stock charts, because a few of them have so badly underperformed the broader market, and now sell at such severely low valuations, that they’ve become compelling bargains. Of course they are only compelling bargains if the key drivers are in place to help deliver improving results. I looked at these eight market laggards, and two of them caught… Read More

One of the biggest investment stories of 2013 has surely been the ongoing slump in shares of Apple (Nasdaq: AAPL), which have fallen 21% this year after falling by a similar amount in the final months of 2012. Surprisingly, Apple doesn’t have much company. Only eight companies in the S&P 500 have by 20% or more in the first half of 2013, which is an unusually small percentage. A rising tide has surely lifted (almost all boats) in this extended… Read More

One of the biggest investment stories of 2013 has surely been the ongoing slump in shares of Apple (Nasdaq: AAPL), which have fallen 21% this year after falling by a similar amount in the final months of 2012. Surprisingly, Apple doesn’t have much company. Only eight companies in the S&P 500 have by 20% or more in the first half of 2013, which is an unusually small percentage. A rising tide has surely lifted (almost all boats) in this extended bull rally. Still, it’s helpful to focus on companies with broken stock charts, because a few of them have so badly underperformed the broader market, and now sell at such severely low valuations, that they’ve become compelling bargains. Of course they are only compelling bargains if the key drivers are in place to help deliver improving results. I looked at these eight market laggards, and two of them caught… Read More

Over the past few years, I’ve written repeatedly about the compelling long-term opportunities presented by emerging markets. These economies possess superior long-term growth prospects but trade at a considerable discount to more mature markets in Europe and the United States.  Still, it’s hard to understate the importance of “long-term” in that outlook. Emerging markets are quite volatile and can quickly rack up short-term losses. Indeed, in recent weeks a number of emerging markets have tumbled sharply, in large part due to concerns of an economic slowdown in China that is dampening demand for exports… Read More

Over the past few years, I’ve written repeatedly about the compelling long-term opportunities presented by emerging markets. These economies possess superior long-term growth prospects but trade at a considerable discount to more mature markets in Europe and the United States.  Still, it’s hard to understate the importance of “long-term” in that outlook. Emerging markets are quite volatile and can quickly rack up short-term losses. Indeed, in recent weeks a number of emerging markets have tumbled sharply, in large part due to concerns of an economic slowdown in China that is dampening demand for exports in countries such as Australia, Brazil and South Africa. I wrote about the issue in this recent column. For a while there, global investors were dumping emerging-market bonds just as fast as they were selling emerging-market stocks. Then a light bulb went off: Investors realized that bonds are a lot safer in a slowing economy — for a pair of reasons. Those two factors:… Read More

If you’re like millions of investors, you’ve decided against investing in Facebook (Nasdaq: FB). The company’s hotly-anticipated IPO in the spring of 2012 was a bust, and over subsequent quarters, shares have been adrift at sea. Indeed, as the S&P 500 has tacked on additional robust gains this year, shares of Facebook have quietly sunk below the 100-day… Read More

If you’re like millions of investors, you’ve decided against investing in Facebook (Nasdaq: FB). The company’s hotly-anticipated IPO in the spring of 2012 was a bust, and over subsequent quarters, shares have been adrift at sea. Indeed, as the S&P 500 has tacked on additional robust gains this year, shares of Facebook have quietly sunk below the 100-day moving average. Of course, like many other investors, you’ve tucked this stock away into the back of your mind, planning on giving it a fresh look when the current phase of malaise has passed. Well, the time has come to give this broken IPO a fresh look. And when you do, you’ll find a business model that is finally ripening, with many arrows in its quiver. Facebook’s 2013 sales and profit trends may… Read More

If you’re like millions of investors, you’ve decided against investing in Facebook (Nasdaq: FB). The company’s hotly-anticipated IPO in the spring of 2012 was a bust, and over subsequent quarters, shares have been adrift at sea. Indeed, as the S&P 500 has tacked on additional robust gains this year, shares of Facebook have quietly sunk below the 100-day… Read More

If you’re like millions of investors, you’ve decided against investing in Facebook (Nasdaq: FB). The company’s hotly-anticipated IPO in the spring of 2012 was a bust, and over subsequent quarters, shares have been adrift at sea. Indeed, as the S&P 500 has tacked on additional robust gains this year, shares of Facebook have quietly sunk below the 100-day moving average. Of course, like many other investors, you’ve tucked this stock away into the back of your mind, planning on giving it a fresh look when the current phase of malaise has passed. Well, the time has come to give this broken IPO a fresh look. And when you do, you’ll find a business model that is finally ripening, with many arrows in its quiver. Facebook’s 2013 sales and… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of events caught the markets by surprise, and more surprises probably lie ahead. For example, of the four potential “black swans” I described at the start of this year, one has already come to pass. Yet we can still identify other events that have a decent chance of playing out, with profits or losses to follow close behind. Here are five themes I’m monitoring closely in this year’s second half. 1. U.S. natural gas exports get the green light In recent years, companies have laid out plans to build… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of… Read More

After a tumultuous half-decade, the world has gone relatively quiet.#-ad_banner-# Sure, the Chinese economy is slowing, the Federal Reserve is preparing for an end to quantitative easing, and the U.S. government is weighing down the economy with its sequester-driven setbacks. But we haven’t seen any catalyzing events, positive or negative, of the sort that can trigger a rapid 1,000-point gain or loss in the Dow Jones industrial average. Whether it’s a tsunami in Japan or a sudden plunge in Europe, market-moving events aren’t always foreseeable. These kinds of events caught the markets by surprise, and more surprises probably lie ahead. For example, of the four potential “black swans” I described at the start of this year, one has already come to pass. Yet we can still identify other events that have a decent chance of playing out, with profits or losses to follow close behind. Here are five themes I’m monitoring closely in this year’s second half. 1. U.S. natural gas exports get the green light In recent years, companies have laid out plans to build… Read More

Of the 11 sectors covered by S&P Capital IQ, only one is on track for lower profits in 2013: technology.  The profit anemia stems from several factors, including: Extremely low levels of government spending due to the current sequester. Depressed sales activity in Europe. The tech sector has more exposure to Europe than any other sector. A lack of any hot new products or trends to trigger interest among buyers. #-ad_banner-#Yet as we’ve… Read More

Of the 11 sectors covered by S&P Capital IQ, only one is on track for lower profits in 2013: technology.  The profit anemia stems from several factors, including: Extremely low levels of government spending due to the current sequester. Depressed sales activity in Europe. The tech sector has more exposure to Europe than any other sector. A lack of any hot new products or trends to trigger interest among buyers. #-ad_banner-#Yet as we’ve noted many times, several tech firms are sitting on stunning levels of cash. Cisco Systems (Nasdaq: CSCO), Microsoft (Nasdaq: MSFT), Oracle (Nasdaq: ORCL) and others may have a hard time generating organic growth, but they have a long track record of acquisitions to help get the needle moving. Though it’s unwise to buy a stock simply because you suspect it is a buyout candidate, you can’t ignore a company’s appeal in a merger and… Read More