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Jeremy Grantham Calls Stock Market Crash…

February 1, 2023January 20, 2022 by Finance Gourmet

Jeremy Grantham crash call I don’t mean to pick on Jeremy Grantham, I just seem to see his stuff come across more than others. Maybe that is because he is so influential, or maybe he just generates headlines that financial journalists love like calling crashes and calling things super bubbles. What is he saying this time? Jeremy Grantham Calls Bubble Popping and Stock Market Crash Again… So, Grantham is back with another stock market crash call, or he is still calling a stock market crash that already started, or he is really super serious about it this time, depending upon how you want to spin it. Grantham spins it like this: “I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007.” Bloomberg That’s weird. I don’t remember any “I’m not as sure,” talk the last time Grantham called a bubble popping stock market crash. I wrote about Grantham accuracy right here in March of 2019 when he was already calling a crash (oops). I wrote about him again in January of …

Dogs of the Dow 2022

February 3, 2022January 20, 2022 by Finance Gourmet

. I first heard of the Dogs of the Dow strategy back when Motley Fool was just becoming famous, largely based on the out-sized success of their investment in AOL as the Internet Bubble continued to swell. (Whew! There’s a lot of investing history, and investing lessons in that one sentence.) The Foolish Four was a supposed improvement on the Dogs of the Dow strategy. I never invested that way, and it turns out to have been a good move. As the year rolls over to 2022, there come the obligatory articles about which stocks are the 2022 Dogs of the Dow, and whether the Dogs of the Dow is a good investment strategy. So, I thought we’d take a quick look. What Is the Dogs of the Dow Strategy? The Dogs of the Dow is an investment strategy where an investor invests in the 10 stocks in the Dow Jones Industrial Average that have the highest dividend yield as of 12/31 on the first trading day of the year in equal amounts and then holds the stocks for the full year before repeating the process. The idea (which used to be true, but is less so these days) is …

Is Bitcoin Better Than Gold?

February 9, 2023January 19, 2022 by Finance Gourmet

Bitcoin was once a joke. Then, Bitcoin was a fad. These days, after proving some staying power beyond being the new tulips, Bitcoin gets respect. Bitcoin has become mainstream with financial publications publishing predictions and analysis without accountability, just like it does with more traditional types of investing. Articles breathlessly ask how high can bitcoin go. But is bitcoin better than gold, especially after the bitcoin crash? Is Bitcoin a Good Investment? As a former financial advisor, I’m always cautious about telling people what is or is not a “good investment.” The better option is often to present the realities of any investment and allow investors to draw their own conclusion. Why Invest in Gold? Of course, to understand whether bitcoin is the new gold, you have to know why people invest in gold in the first place. There are several reasons people invest in gold. One of the most well-known is as an inflation hedge. While governments can print money, and inflation can take off with, or without, monetary policy failures, gold prices are tied to a physical commodity whose supply cannot be manipulated by the stroke of a pen. You can really get cash back with Rakuten This …

Dodge & Cox Stock Fund Analysis

January 13, 2022January 7, 2022 by Finance Gourmet

Updated January, 2022 Great Large Cap Value Stock Mutual Fund One of my favorite mutual funds is the Dodge & Cox Stock Fund (DODGX). This isn’t some flashy hey-look-at-me mutual fund. In fact, this is exactly the kind of fund that people started questioning during the Internet bubble, and that is a good thing. It did not get caught up in the Internet bubble like many other stock funds. Its returns of just 5.4% and 20.21% in 1998 and 1999 respectively earned it a lot of scorn when Janus Funds were near 100% returns, but the proof of greatness isn’t riding along with crowd hysteria. The proof of greatness comes in 2000 and 2001. When other funds were getting crushed, DODGX was making money! In 2002, it managed to drop just 10.5%, almost half of what others were losing. The real proof of greatness is that it did not achieve these results by hiding and investing in “safer” places. In 2003, when the market turned back up, they were right there. This is what a great fund looks like. Limited Time Offer? For the last several years, the Dodge & Cox Stock Fund has been closed to new investors, so …

Finding a Good Stock Trade

January 6, 2022 by Finance Gourmet

I preach that long-term investors should have a diversified portfolio tailored to their time frame and risk tolerance until I’m blue in the face around here. If you already have a that portfolio and you are fully funding it, only then should you think about shorter-term investing. Finding a good stock trade is the mission for short-term investing. What Is The Difference Between Trading and Investing? First, let me just say that day trading is a different thing. If you are interested in day trading, you’ll have to read about that elsewhere. Second, what is the difference between a stock trade and a stock investment? The answer is your intentions. A trade is something you plan to start and complete. If you plan to hold the stock without a trigger for ending your ownership, then that is an investment. For example, if I think XYZ Corp is trading too low at $50 per share, I might buy XYZ Corp with the idea of selling it for $60 per share. Whether or not this ends up being a good trade depends on whether I do get to sell it for $60 per share, and how long it takes for that to …

Is There Really a Santa Claus Rally?

April 22, 2022December 16, 2021 by Finance Gourmet

There are so many investing maxims that it’s hard to know why anyone needs to do any research into stocks and bonds at all. I mean, how hard can it be to invest? Why do people put so much effort into it? At any time of year, there is a tried-and-true maxim to tell you where to invest your money right now. Stock Market Sayings *To the tune of Here Comes Santa Clause* Here comes platitudes, here comes platitudes… *End song* The most famous Wall Street market saying is: Sell in May, then go away. It rhymes! It must be true. The idea is that historically the market sort-of, kind-of, under-performs during the summer months. Of course, there are plenty of years where this isn’t true, especially now that Manhattan bankers don’t head for the country and stay there all summer long. There’s also a Super Bowl Stock Market Indicator which says that if the team from the AFC Division wins the Superbowl, then the market will have a down year. Conversely, if the NFC Division team wins, then the market will have an up year. My personal favorite is the Hemline Theory, or the Skirt Length Theory which suggests …

Galera Therapeutics Decides Its Drug DOES Work

December 14, 2021 by Finance Gourmet

So, I’ve been examining (procrastinating by looking at other stuff) the various tools that come with all of these no-cost investing apps like Webull, Stash, Robinhood, and the like. I’ve also been playing around with the idea of delivering some micro-posts here on FinanceGourmet. Usually, I try and fully cover financial advice, or financial independence strategies and topics, in full detail. However, maybe some quick hits would be valuable along the way as well. We’ll see how it goes. Galera Therapeutics Stock Rises 100% On Error Typically, when a company reports a big-time error, its stock goes down. Not Galera Therapeutics. Today, the company issued a press release before the market opened stating that it’s Phase 3 drug trial DID achieve statistical significance after it reported earlier that it DID NOT achieve statistical significance. The Company previously announced the Phase 3 ROMAN trial of avasopasem in SOM did not achieve statistical significance on the primary endpoint. Upon further analysis, an error by the contract research organization (CRO) was identified in the statistical program. Correction of this error resulted in improved p-values for the primary and secondary endpoints. Galera Therapeutics – Galera Announces Primary Endpoint Met Statistical Significance in Corrected Topline Efficacy Data …

How High Will Bitcoin Go?

August 14, 2023November 18, 2021 by Finance Gourmet

Wondering how high bitcoin will go? One analyst says $55,000+ by end of year 2021. Let’s keep an eye on him. Update: Analyst accountability is a big thing at Finance Gourmet. Sometimes, I wish watching, rewarding, and outing analysts was a full-time job I could get somewhere. Until then, it’s time to give out some credit, where credit is due for bitcoin analyst Michael Novogratz and his November 2020 call, as bitcoin prices hit 40,000, just below his bitcoin prediction of $55,000 by EOY 2021. Originally published 11/18/2020. Michael Novogratz – November 18, 2020: Some recent bitcoin buzz comes courtesy of Michael Novogratz who is out saying that bitcoin prices could rise to $55,000 or $60,000 by the end of 2021. With bitcoin trading near $18,000 that’s more than just being bullish. Is he right, and just how high will bitcoin go? Good Bitcoin Analysis? Unlike most financial publications, I believe in financial analyst accountability. Anyone can blurt out a prediction, hope to be right, and then go around telling people that you called it, while failing to mention any other “calls” that weren’t so good. So, let’s take a look at Mr. Novogratz’s track record as a bitcoin predictor. …

Is Best Buy Stock a Buy?

November 16, 2021 by Finance Gourmet

Do you feel lucky? Well, do ya? Punk. Best Buy reports earnings next week on Tuesday 11/23/21. Is Best Buy stock a buy before earnings? As you can tell from the subheading, there is a lot of uncertainty around buying Best Buy stock here. Don’t get me wrong. Best Buy is doing really well. Sales are up. Some of that is from the pandemic. If you’re going to be stuck in your house you want a bigger TV, better speakers, a new Nintendo Switch, an Oculus VR headset. You get the idea. But, Wall Street is not stupid. They know that about Best Buy’s sales and it is all baked into expectations for the retailer. However, here is where it gets interesting. According to the Best Buy stock quote page on Yahoo Finance, the consensus projected earnings for Best Buy to report in Q4 is the same as it was for last quarter at 1.85 per share. Last quarter, Best Buy shattered that expectation by reporting 2.98 per share. So, where does that put us? There is the possibility that Best Buy and its upper management are strict, straight-arrow, by the books executives. On the other hand, there is the …

Tesla Shares Fall as Musk Offers To Sell

November 8, 2021 by Finance Gourmet

People are always saying things like Bill Gates is worth $XX billion based upon the current Microsoft share price times the number of shares Bill Gates owns. While this is a reasonable approximation –and unless Gates is going to throw open his books, the only one we have– it is actually completely unrealistic. The same thing is true of Elon Musk, even though he has two big chunks of stock. Big Sells Equal Big Falls One of the problems with deciding that anyone is worth their shares times the share price is that the reality is that their shares are at once worth both more, and less, than the current share price. Ever wonder is Zelle a scam? In sort of a Schrödinger’s Cat of stock prices one can see how someone like Musk’s stock is worth both more and less than the current price per share. We got a nice example of the “less” thanks to Musk’s weekend tweet. On Saturday, Musk proposed selling 10% of his Tesla stock, if the people voted for it. By the time the poll ended, over 3.5 million people had voted (or more specifically 3.5 million Twitter accounts had voted). The result was …