stock market

Apple Stock Good Investment or Passing Fad

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People are always asking me if I think certain stocks are a good investment. There is a flaw in the question, but we’ll get to that in a minute. Right now, let’s get right to the real question people are always asking me these days. Is Apple Stock a good investment? What people mean when they ask me that is not whether or not Apple is a good investment, but whether or not I think Apple stock will go up a lot … soon … really soon. They also want to know whether or not I think Apple stock will go down, but that is not why they ask the question. They want to buy Apple stock because it sounds like a smart investment, or because it feels like a smart investment. Of course, none of this has anything to do with an in-depth analysis of the company’s stock and it’s prospects for future growth and earnings. It’s all about buzz. They heard about the iPhone and it’s a big hit! They heard about the iPad and it’s a big hit! They heard about the NEW iPhone, and it’s a big hit! Now, they hear that Apple’s earnings are higher …

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Are Share Buybacks Really Good For Shareholders?

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IBM released their quarterly earnings. As is customary, the company announced various financial numbers like how much it earned per share and how much revenue it generated for the quarter, and so on. As is customary for IBM, the company also announced yet another giant share repurchase using shareholder money to buyback IBM shares of stock. The idea of a stock buyback is that the company figures that its stock is undervalued on the stock market. By buying shares of stock at those low prices, the corporation is increasing shareholder value by making a good investment in itself. Theoretically, those shares repurchased by the company at a low price can be used to pay out earned stock options, for example, at a lower cost. But, IBM — along with many other companies — has perverted the concept of a share repurchase or stock buyback. IBM Stock is currently trading near an all-time high stock price. While, it is possible that even at that price per share the company believes its shares are undervalued, that is not what is really going on here. IBM Stock Buybacks Share Repurchase Run Amok IBM is not a “new” tech company like Microsoft, Google, Amazon, …

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Yahoo Buys Associated Content

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There are plenty of other things Yahoo gets from buying Associated Content, not the least of which is a big fat swath of Internet real estate that ranks obscenely high in Google search results and Bing search results. A great deal of the traffic generated from these high ranking searches is monetized via, you guessed it, Google AdSense which pays content publishers based upon ads placed by Google on those websites. Yahoo, can now switch out those Google Ads and replace them with their own Yahoo Ads.

Stocks In Dow Jones Industrial Average and Dow Jones Transportation Average

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Dow Jones Indexes publishes lot of averages and indexes. They are best known for the Dow Jones Industrial Average and the Down Jones Transportation Average. Personal financial planning on FinanceGourmet.com The Dow Jones Industrial Average is featured on most stock market news reports and makes an appearance on the nightly news. It is often referred to as just The Dow, or Dow Jones. The Dow Jones Index is composed of the stocks of 30 big U.S. companies which are supposed to represent the majority of the US economy and industry, with the exception of the transportation industry; they have their own index. Dow Jones Industrial Average Components The Companies In the Dow Jones Industrial Average 3M Company (MMM) Alcoa Inc (AA) American Express (AXP) AT&T (T) Bank of America (BAC) Boeing (BA) Caterpillar (CAT) Chevron (CVX) Cisco (CSCO) Coca-Cola (KO) du Pont (DD) Exxon Mobile (XOM) General Electric (GE) Hewlett-Packard (HPQ) Home Depot (HD) Intel (INTC) IBM (IBM) Johnson & Johnson (JNJ) JPMorgan Chase (JPM) Kraft Foods (KFT) McDonald’s Corp (MCD) Merck & Co (MRK) Microsoft (MSFT) Pfizer (PFE) Procter & Gamble (PG) Travelers Companies (TRV) United Technologies Corporation (UTX) Verizon Communications (VZ) Wal-Mart Stores Inc. (WMT) Walt Disney Company (DIS) …

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Google Posts Higher Than Expected 3rd Quarter Numbers – Is The Recession Over

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To hear many of the newspapers and other media outlets tell it, Google’s blowout third quarter is the official signal that the recession is over and that businesses are spending again, because customers are spending again, and everything is fine again. The logic goes something like this. Google is not only the largest search engine, but it is also the largest provider of Internet advertising, particularly in America where its ad market share is something like 75% or so. Thus, Google acts as a bit of a proxy for the online advertising market in general. Online advertisers, then, spend money on online advertising only when, a) they have the money available to spend, and b) there are customers out there spending money to attract. So, theory is that since Google’s earnings came in above expectations, then that shows that advertisers are spending more money on online ads, which therefore means that more consumers are spending money online. That’s the idea, anyway. Google Is Not The Economy It is tempting to pronounce everything that Google does and everything that happens to Google as very important to major aspects of American life, including the overall business environment, and the U.S. economy. After …

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Abby Joseph Cohen at Goldman Sachs Declares Recession Over

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indicator light

You’ll forgive me if I don’t give a flying leap about whether or not Abby Joseph Cohen thinks the recession is over.  The Goldman Sachs perma-bull was famous for being “right” about the ever rising stock market of the 1990s.  Too bad she has never been right about a single declining stock market. Imagine you had a warning light that would light up red whenever the market was going to decline.  Imagine that light was broken and could never light up.  That light would be exactly as accurate as Abby Joseph Cohen has been since the 1990s. Compare the light to Cohen and you’ll find they have the exact same track record. Cohen Always Predicts Bull Markets The recession may actually be over.  In which case, her apologists will trot out this proclamation as another example of her being “right.”  Just keep in mind, the warning light is always making the same prediction.

Sell Banks Stocks or Buy Bank Stocks

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Ok, here it comes. After the government released the results of its stress tests, banks are scrambling to come up with ways to raise huge amounts.  It seems that the government money that was a much vaunted and absolutely necessary lifeline to banks has become tainted now that it comes with, horror of horror, strings on how the money can be spent.  As if the banks ever handed out a huge loan to anyone without some sort of control on the collateral. Be that as it may, banks want out of TARP and they want out now.  Even banks that would be much better off holding on to their TARP dollars are looking to buy back the government shares of preferred stock that they had to put up in order to their money.  Seems there is a feeling that the banks that do keep their TARP funds will be viewed as sickly or less stable than their counterparts who repay, regardless of the cost or wisdom of doing so. The only way for these banks to raise the kinds of dollars being thrown around is by selling off assets, which is fine if they are not part of the core …

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2009 Stock Market Recovery Starts Now?

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Recently, people have begun to draw all the wrong conclusions about the stock market for all the wrong reasons.  It is a common phenomenon and it happens every time the stock market moves up or down long enough for the average citizen whose only market investments are in IRAs or 401(k) plans to notice. The first bad conclusion is that now is the time to pull money out of the market.  While this market has fallen long and fallen fast, it is almost always the case that when the average person looks to get out of their investments, they have already fallen significantly which means that getting out now just means locking in losses, especially because precious few of them have any idea about when or how they will get back in. The second miscalculation that continuously happens to virtually everyone who is not a seasoned investor is the mistaken notion that the stock market is moving and pricing based on now, as in today.  It isn’t. The stock market is now, and has always been, priced based on the future.  Investors buy stock not because the stock will be higher today, but because it will be higher in the …

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January 2009 Stock Market Update

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To no one’s surprise, all of the major stock market averages ended January down for the month.  This has drawn out the media to file their annual (when the market is down in January) stories about how sometimes January being up or down can predict how the year goes as well. This is about as accurate as which conference wins the Superbowl, the AFC or NFC, predicting how the stock market will perform for the year.  That is, not accurate at all. The flaw in both is a fundamental misunderstanding of the nature of mathematics and statistics.  Just because something is true 75% of the time in no way makes it a reliable predictor of anything, and yet, here we are. I’ll write up an article on this later, but for now just keep in mind that smart investing is about facts, not old wives tales, and arthritic knees predicting the weather.  Watch the numbers, not the headlines. By the way, don’t expect February to be any better, but after that…well, we’ll just have to watch the numbers.

Buy Real Estate Now – Or Maybe Not

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I’ve been a professional writer and business consultant for over a year now, but many people still remember me from my financial advisor days.  So, I get plenty of questions about investing, the stock market, and real estate.  The number one question I get these days, is, “Should I be buying real estate now?” The answer? Yes, if you need a new house. Real Estate Investment Cycles are Long The funny part about all of this to someone who has been “on the inside” is that these are the very same people who refused to have anything to do with the stock market following the Internet bubble of the late 1990s.  While I patiently tried to explain to them that buying low and selling high meant buying now, when things looked at their worst, they shook their heads and said they were going to do something else.  The same thing about the stock market holds for all investing.  Buying low and then selling at a higher price is how you make money.  But, here is the thing everyone seems to have forgotten, or maybe they just never knew.  Real estate market cycles take much longer than stock and bond investment …

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