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Market Monday 1-24-2022

January 24, 2022 by Finance Gourmet

Hey, Boys and Girls, here comes an interesting week for investors. The following article is for informational purposes only and is not investment advice. This is not a recommendation to buy or sell securities. As always, the best investment strategy for long-term investing is building a well-diversified portfolio based upon your time frame and risk tolerance and then leaving it alone except for annual or semi-annual rebalancing. But… Short-Term Investing January 2022 The week of January 24, 2022 looks fun. And by fun, I mean interesting. The Fed meets on Wednesday. Everyone expects it to raise interest rates to help tame inflation, while also reducing its bond buying to do the same thing. If that weren’t enough, a bunch of big companies are set to report their earnings this week including Apple, Microsoft, and McDonalds. At least we don’t have to worry about options expiring, that was last week. As I write this, the S&P 500 hit the 10% down mark necessary to call the move from January 3 to now a correction. Remember a correction is a 10% reduction, although most people will require the market to close beneath that level to call it a recession. A 20% reduction …

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 …

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 …

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 …

Dell Spins Off VMware

November 8, 2021November 1, 2021 by Finance Gourmet

It was kind of weird when Dell bought VMware in the first place. It was billed as sort of a move to get Dell into the enterprise space by having sort of an inside track with VMware. If that wasn’t weird enough the mechanics of the merger were even weirder, where Dell basically bought a lot of shares of VMware, but not all of them, allowing VMware to continue trading on the stock market, even though it was functionally a part of Dell… or sometime. Ironically, just when it seemed like VMware would be a significant part of the future of enterprise computing, it was made superfluous by the rise of cloud providers like Amazon, Google, and Microsoft providing their own virtual hypervisor platforms and management systems. Much of VMware’s market share these days is simply the inertia of companies that haven’t moved on. Anyway, Dell spun off VMware today by giving the 81% of VMware stock that it owned to Dell shareholders. For each share of Dell stock, shareholders get 0.440626 shares. In lieu of fractional shares, the company will pay out cash, so if you have 100 Dell shares, you’ll get 44 shares of VMware and cash for …

Is Verizon Stock a Buy Right Now?

October 20, 2021 by Finance Gourmet

Verizon just reported its third-quarter results. As always, the finance news is reporting whether or not Verizon stock beat estimates. If that’s the kind of quick news you need to see, then yes, Verizon stock beat estimates for earnings, but revenue was slightly under estimates. Now that we’ve gotten the skin deep financial analysis out of the way, let’s dig in and see if Verizon stock will help us achieve financial independence. Verizon Stock Analysis I’ve owned Verizon stock forever. It pays a solid dividend and as an enormous telecommunications it isn’t going away without a big warning, so it fits perfectly in my non-retirement stock portfolio as a bond-stock, or value stock, if you prefer. Thanks to those decent earnings, Verizon stock is rising today, but it’s still down for the year, and year-to-date. As of yesterday’s close, the 12-month dividend yield stood at almost 5%, at 4.89%. You can’t get an interest rate like that anywhere today. So, if you’re willing to hold Verizon stock as a dividend paying bond-like investment for a few years, chances are good that you can at least get your principal (cost basis) back. And, if Verizon happens to have a good few …

Uber’s First “Profit”

September 22, 2021 by Finance Gourmet

One of the reasons I write Finance Gourmet is because of all the bizarre finance articles out there masquerading as news while actually serving as cheerleading, PR pieces for companies. It’s a little bit like those articles from White House press briefings that are basically stenographers taking the White House pronouncements as the full news while leaving out all sorts of necessary information just because the Press Secretary didn’t serve it up on a platter. Uber Projects Quarterly Profit The headlines out there in the financial press all say that Uber projects that it might have its first every quarterly profit next quarter. The facts? Well… It’s always refreshing when the non-finance guys aren’t willing to go along with the company dog and pony show. I don’t get to quote Gizmodo a lot here on a blog about financial independence, but the guys over at Gizmodo, where they write about technology, get full marks for their headline, “Uber Says It’s on Track to Maybe Make a Fake Profit.” Now THAT’S a legitimate headline. Even the subheadline spits some truth. Uber’s profit will be based upon adjusted EBITDA. If you’re into investing enough, you’ve heard of EBITDA. It’s a real financial …