One thing was abundantly clear in the most recent earnings season: Quarterly results were often terrific as analysts had apparently underestimated the earnings strength of a wide range of companies in a wide swath of industries. And in… Read More

As the second quarter winds down, investors are shifting their sights to macro themes. We’re about to get a better sense of whether the economy is building steam, or stalling out. Here’s a look at three economic items to watch this week: Housing: New vs. Used On Tuesday, we’ll get the latest reading on sales of existing homes for the month of May. A day later, sales of new homes will be in the spotlight. Economists think existing sales rose +5% sequentially, thanks to tax credits (that… Read More

As the second quarter winds down, investors are shifting their sights to macro themes. We’re about to get a better sense of whether the economy is building steam, or stalling out. Here’s a look at three economic items to watch this week: Housing: New vs. Used On Tuesday, we’ll get the latest reading on sales of existing homes for the month of May. A day later, sales of new homes will be in the spotlight. Economists think existing sales rose +5% sequentially, thanks to tax credits (that have since expired). But new home sales likely fell sharply, according to a consensus of economists’ forecasts. The ratio of existing homes for sale compared with the number of new homes has never been larger. The glut of unsold existing homes on the market needs to be whittled down before more new homes get built. Of these two data points, the existing homes figure is the one to track. If the number shows a surprising dip in the inventory of existing homes, then home builders may start to identify the time… Read More

Put that cork back in the champagne bottle. As the dust has settled, it’s increasingly clear that China’s bold actions this weekend regarding its currency may be less bold than it seems. Clearly, the Chinese yuan will get stronger and the U.S. dollar will get weaker, but it will take several years — or longer — for any real positive benefits to be felt. Nevertheless, you can identify the long-term winners and losers from a stronger Chinese currency. Watching Paint Dry The Chinese government announced over the weekend… Read More

Put that cork back in the champagne bottle. As the dust has settled, it’s increasingly clear that China’s bold actions this weekend regarding its currency may be less bold than it seems. Clearly, the Chinese yuan will get stronger and the U.S. dollar will get weaker, but it will take several years — or longer — for any real positive benefits to be felt. Nevertheless, you can identify the long-term winners and losers from a stronger Chinese currency. Watching Paint Dry The Chinese government announced over the weekend that it would loosen the fixed rate at which dollars and the yuan can be exchanged, responding to increasing pressure from lawmakers in the United States and elsewhere. That led to a quick +0.4% gain in Monday trading for the yuan. And that’s all you should expect for the near-term. From time to time, the Chinese government will slightly loosen the band further, and the currency will make another quick +0.4% to +0.5% move. But we may not see more than a handful of those moves each year. Translation: it may be several years before the yuan gains +10% from… Read More

Today I’d like to introduce you to my friend Mike. Mike is a real person and that is, in fact, his real name. He and I met in college and have been close friends since. He’s extremely intelligent, a partner in a major law firm, and he has, to my… Read More

First-quarter earnings season is a distant memory, and we’re still six weeks away from the next torrent of earnings reports. To fill that vacuum many investors will be focusing on economic data points that will be released… Read More

Warren Buffett seemed to take it on the chin last week. In fact, he’s been hammered for a couple of months now. First came the annual Berkshire Hathaway (NYSE: BRK-B) shareholders meeting, the annual Woodstock for Capitalists and Buffett love fest held each May,… Read More

During my former days as a financial advisor, I’d occasionally get a call or email from someone in our “Alternative Investments” department trying to drum up business. Invariably, they wanted me to deposit my clients’ assets into a specialized hedge fund utilizing one esoteric strategy or another. Quite… Read More

When the stock market is on the upswing, private companies get in line to sell their shares and become members of the new crop of initial public offerings (IPOs). Bankers like to know that investors are in a buying mood when taking these companies… Read More

You can’t blame investors for bagging profits on big winners. Many investors that bought into Ford Motor Co. (NYSE: F) back when shares traded for the price of a Big Mac have been exiting the stock recently as it looked like the fast gains had been made. But for those focused on the long-term, the recent -20% drop in the stock creates an opportunity to jump in before shares post their next round of gains. Much ink has been spilled about Ford’s impressive management team led by CEO Alan Mullaly. They… Read More

You can’t blame investors for bagging profits on big winners. Many investors that bought into Ford Motor Co. (NYSE: F) back when shares traded for the price of a Big Mac have been exiting the stock recently as it looked like the fast gains had been made. But for those focused on the long-term, the recent -20% drop in the stock creates an opportunity to jump in before shares post their next round of gains. Much ink has been spilled about Ford’s impressive management team led by CEO Alan Mullaly. They had exquisite timing in 2008, leveraging every asset the company had to raise cash, right before the economy contracted. Had they not done so, Ford would likely have needed to declare bankruptcy along with its beleaguered peers in Detroit. Even more remarkably, Ford didn’t skimp on product development spending even when money was tight, and is now bearing the fruits of that gutsy move. To be sure, Ford’s car and truck plans are the keys to this stock. As investors saw the strong promise of its new Focus, Fiesta and… Read More

As the Obama administration gets set to spell out the restrictions placed on offshore drilling, one thing is clear: The domestic supply of oil and natural gas is bound to be cut — at least in the near-term. This should have little impact on oil prices, as the commodity is global in nature, and the Gulf contributes only a tiny fraction of the world’s output. Natural gas — that’s a different story. It’s not a fungible commodity. Natural gas costs more to transport from distant lands and the Gulf accounts… Read More

As the Obama administration gets set to spell out the restrictions placed on offshore drilling, one thing is clear: The domestic supply of oil and natural gas is bound to be cut — at least in the near-term. This should have little impact on oil prices, as the commodity is global in nature, and the Gulf contributes only a tiny fraction of the world’s output. Natural gas — that’s a different story. It’s not a fungible commodity. Natural gas costs more to transport from distant lands and the Gulf accounts for about 12% of all domestic gas production. That means the market for natural gas, which has recently had greater supply than demand, could come into balance. If that happens, the folks digging for gas on dry land would finally have a reason to cheer. Land-based drillers were euphoric a few years ago when they discovered that the United States was sitting on massive pockets of underground gas that could now be tapped thanks to new technology. The euphoria was short-lived as it quickly became apparent there was perhaps too much gas yet to be tapped. Prices… Read More