- - Page 5 of 23 The Finance Gourmet

Market Correction… Barely

February 23, 2022 by Finance Gourmet

So, the S&P 500 closed low enough on Tuesday to make it 10% lower than its closing high on January 3rd marking, officially at least, a correction in the stock market. If you aren’t seeing a lot of fuss, that’s because it really isn’t that big of a deal. Back on January 3rd, you couldn’t swing a dead cat without hitting someone who thought the market was overvalued, that it had run up too high for too long. So, when the market began a slow sideways, sloping down, trend over a two-month period, nobody really worried about it. It’s as if those prices on January 3rd weren’t real and the market was getting back to reality. Even now, there are plenty of people out there saying that the market is still too high. They might be right, and frankly another two-month long drop down another 10 percent probably won’t be much of a fuss either. After all, while this correction is a market down 10 percent from its peak, it’s a market that is zero percent down from last October, and zero percent down since last July, and still very much up from before that. In other words, unless you …

Is Draft Kings Stock a Buy?

February 19, 2022 by Finance Gourmet

Draft Kings stock got hammered on Friday (2/18/22). Why? Well, there are plenty of self-important, chest-puffing, stock analysts’ pieces out there for you to read up about if Draft Kings is a sell, a buy, or hold, but you don’t have to read them. The promise of far too many recent IPO stocks, stocks heading for IPO, and plain old venture capital backed unicorns is “unlimited growth potential.” This is the key to big venture capital raises, and huge IPO numbers. Profits? Nope. Stable customers? Puh-lease. Silicon Valley tech bros and their Wall Street counterparts don’t like being shackled down by old world metrics like GAAP and reality. They prefer knowing exactly how much potentially unlimited limitless is out there. Everything else is for brick and mortar stocks. How Draft Kings Got Unlimited Potential Once upon a time almost no states allowed online gambling and betting. In fact, it was just over two decades ago that the Feds got mad at all the online gambling websites out there pretending they weren’t violating U.S. law by having some part of their operation outside the United States. It took the Feds about a year to scare the banks into cutting off the …

Is Ark Innovation a Scam?

February 18, 2022 by Finance Gourmet

Sometimes, a fast rise comes with expectations that are difficult to live up to. Sometimes the person rising fast doesn’t really help matters. Cathie Wood came into the “mainstream” of financial news with a prediction of a huge rise for Tesla. She was “right,” at least over that sample period, and then some guy anointed her best stock picker of 2020. That will attract some eyeballs. But, just like Abby Joseph Cohen rose to fame by always being more optimistic than the next stock market analyst who said, “Are we really sure all of these no-earnings, no-profit, internet stocks should be pulling everything this high?” while the market rose and rose during the internet bubble, being right isn’t always so much being right, as being the last one to ignore the iceberg. Cohen told investors to “buy the dip” as the internet bubble popped, and the market crashed. I hope everyone who thought she was amazing just didn’t listen to her that time… Wood’s problem is that when you become famous for catching unicorn, people only think you’re amazing while you still have one. Since finding another one is almost impossible, there is a tendency to hold on too long, …

AT&T Slashes Dividend

February 4, 2022 by Finance Gourmet

AT&T is making big moves, are they good for AT&T, or bad for AT&T. As everyone knows, I’m a dividend guy. I believe in buying the stocks of good companies and then treating them like bonds, collecting interest payments while ignoring price movements. Usually, when you buy a solid, US company stock with a dividend, that dividend is yours more or less forever. If you buy Apple today (2/4/22) you’ll get about a 0.50% dividend yield. If you like, you can choose to think of it as buying an Apple CD that pays 0.50% with a five-year (or 10, or 3, or whatever) maturity date. When you do that, the daily price movements of Apple stock are irrelevant to your financial plans which count on nothing more than receiving 0.50% interest, and some day getting your principal back (with some risk). AT&T Dividend Cut But, sometimes, a company can cut its dividend. Usually that isn’t a huge surprise. In the case of AT&T, there has been talk of changing (cutting) the dividend for some time now. That being said, a 50% cut is a big deal. As of yesterday, the annual dividend yield for AT&T stock was over 8%. As …

Crypto Collapse?

February 1, 2022 by Finance Gourmet

If you’re way into crypto, you probably don’t care what crypto is trading at today because you know it will be way up tomorrow. This is the Cult of Crypto. For everyone else, what is going on with crypto? Warning I’m just spit balling here folks. Do NOT try and follow me when it comes to cryptocurrency. I’m new. I know nothing. Proceed at your own risk. Analyzing Crypto I’m not going to lie, I’m pretty new to crypto and I while I have some money invested in some different cryptocurrencies, it’s nothing compared to my overall investments. That being said, I’ve been researching, and I’ve seen some things. Let’s do this. First off, crypto moves very much like other assets, including stocks. I don’t mean to say it moves the same as stocks, or even in relation to stocks, but if you looked a crypto price chart, the movements are very similar to what you would see for a chart of a stock like Apple, or the S&P 500, or other securities. Since it moves like a stock, I wonder if it can be analyzed like one. For many years there have been various theories that you can predict …

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 …

Acorns Review Automated Investing Made Easy?

September 7, 2024January 8, 2022 by Finance Gourmet

Note: This Acorns review article has been updated with the latest information as published on the acorns.com website. No sooner than I finished my Digit review, than I saw an ad for another automated savings app on Facebook that takes a different tack for building up your savings automatically with the help of an app and online financial service. This one is called Acorns. Let’s check it out. Is Acorn legit? Is Acorns a scam? Read on while I do my Acorns app review. Acorns Review – Legit, Scam, Worthwhile? Acorns vs Digit Whereas Digit monitors your bank balance and transfers money its algorithm determines is “extra” into a savings account for you, Acorns rounds up the change on every purchase you make to the next whole dollar amount and automatically saves that money for you. Another version of this type of automatic investing and savings app is Grifin. Grifin does away the clever sounding “round up to the next dollar.” Grifin is a user-controlled automatic app investing. Instead of gathering up a few dollars’ worth of transfers and sending them down into mutual fund land, Grifin take every transaction you make and invests $1 in the stock you just bought something …

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 …