Stocks

Retail Stocks and 2017

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retail stocks 2017

Wheee! Well, looks like 2017 is going to be a lot of fun, and by fun, I mean volatile and sketchy all the way through. First up, are announcements by retail stocks such as Macy’s and Sears, both of whom announced that they would be cutting staff and closing stores. Kohls also announced sluggish holiday sales. That means that the 2016 holiday shopping season was not strong enough for a lot of traditional retailers. Look for earnings on the low side, that disappoint Wall Street for most retail stocks. This is a big deal, because this was supposed to be the “up” year for the economy. The stock market is up, closing in on 20,000. Job reports show that unemployment is as low as it’s been since before the Great Recession. The Fed even finally got to raise interest rates in December. If this holiday season wasn’t good, then things maybe aren’t going as well as everyone might have hoped. Of course, it is possible that there was still plenty of consumer spending and it just went different places like online retailers, or specialty stores, but so far, no one is pushing that theory. Trump, The Fed, Inflation and a …

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2017 Finances and Money Issues

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investing in hsa account calculator

Welcome to 2017! Relax. Take a deep breath. There. Feel better? Good. Then let’s jump in. Finances Updated in 2017 With a new year, come some new numbers. There will be updates to the maximum 401k contributions, income limits for Roth IRAs, and others. Plus, there will be adjustments to the 2017 income tax brackets, the 2017 standard tax deduction, and more. And, of course, there is a new IRS mileage rate for 2017 as well. What about 529 plans? There aren’t a lot of updates to those numbers each year, primarily because most facets of 529 college savings plans are administered through the states, who aren’t always as keen on changing and updating everything. You’ll want to re-evaluate your financial plan for the new year, and you’ll want to review how your financial plan did in 2016. Plus, you’ll want to rebalance your portfolio, if you didn’t do it at the end of 2016. Retirement Plans 2017 A big part of most retirement plans are tax-advantaged savings accounts like your 401k plan, IRA accounts, and, for some of you, 457 plans, 403(b) plans, and various differed compensation plans. All of those need adjusted and reviewed for 2017 as well. …

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FCC Fake Fines T-Moble $48 Million

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tmobile fine

When is $48 million not $48 million? When it is a FCC fine. T-Mobile was fined $48 million today by the FCC for misleading customers about its unlimited data plans. As it turns out, T-Mobile’s unlimited data plan was actually a 17 GB per month plan. After that the company “de-prioritized” the customer’s traffic making it so slow as to be pretty much unusable. Most unlimited plans work this way, of course, because unlimited isn’t really feasible. The reality is that there is only so much data a “normal” user would use in the course of a month, and racking up 17 GB would require some pretty heavy effort. This is a problem of the cell phone carriers own making. They market against each other in such a way that customers now believe that they must have unlimited data even though many of them don’t use anywhere near that much. So now, carriers work overtime to shout UNLIMITED whenever possible, and then hide actual limits in the fine print. In this case, T-Mobile even tried to not be honest in the fine print, and that’s when the FCC struck with its huge fine, except… It’s Not Really $48 Million The …

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Apple Stock iPhone 7

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apple stock outlook logo

I write more about Apple stock than I ever mean to, but people just love to talk to me about it, so here we go. New iPhone New Apple Stock Moves Apple stock is one of those stocks that gets a lot of attention, and action, from people who otherwise don’t invest in individual stocks much at all. That is, among your own friends, chances are that there are people who own Apple stock, and nothing else other than some company stock, or maybe some ETFs or mutual funds. These investors are, not surprisingly, often moved by news, other than any sort of analysis. In addition to these investors, there are a lot of very experienced investors with Apple stock in their portfolio, and they both watch the fundamentals, AND try to guess how others will reaction to Apple stock. All of this adds up to a stock that likes to move A LOT based on any single news event or earnings report. For the last several months, Apple stock has not done well. There were concerns that the company could no longer innovate, and the momentum left behind by Steve Jobs had finally run out. But, last week, Apple …

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Calling a Market Top

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As a financial planner a few years back, I noticed that my clients’ attitudes about stock market investing changed along with the tenor of media reports. That isn’t surprising. Many of our ideas are influenced by various media. But, if you look closer, you can see that it isn’t really the media, it’s the same mindset that occurs in the general population about any phenomenon in live. Trendy Stock Market Opinions Think about a recent trend. Not some edge trend that never was mainstream, but some big trend that “everyone” got into at one point in time. It doesn’t really matter what the trend was, whether it was a new band, a fashion trend, or something else. How about we use Pokemon Go as an example? These trends follow a familiar pattern. First, the initial wave of popularity gets going. These people love whatever it is, and tell everyone they know about it: friends, family, co-workers, you name it. Your friends ask you to download the app. The news is all about how there is this great new thing. Their motivation is just that they like something and want to spread the word. The next phase are the people who …

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Walmart Buys Jet.com

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walmart buys jet plan

A couple years ago, when Yahoo bought Tumblr for $1 billion, I wasn’t the only one who wondered what value Yahoo saw in the acquisition. It takes a special kind of Silicon Valley mind to think that a money losing internet business plus a money losing internet business somehow adds up to profit. It turns out that even the modest goal of $100 million in annual REVENUE, not profit, set by Yahoo, was too much for the internet property supposedly worth so much that Yahoo shelled out $1.1 billion for it. It seems that the great lesson of the internet bubble years earlier, that eyeballs and name recognition, do not equal money, still isn’t something tech companies are ready to learn. Which brings us to today’s multi-billion dollar buyout of Jet.com, a money-losing online retailer that goes head to head with Amazon. It’s just over a year old now, and it crossed the $1 billion in revenue line earlier this year. Revenue, not profit. The company, by all accounts, hemorrhages cash and funds its operations by taking on more investors. But, somewhere in there, Wal-Mart sees something worth $3 billion, plus an additional $300 million in Wal-Mart stock. I guess tech companies …

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Sell In May and Go Away 2016

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sell in may and go away 2016

There are all manner of investing sayings and “wisdom” out there. One of the most common is a little rhyme that goes: Sell in May and go away. Don’t come back ’til Labor Day. This saying comes from older days when traders actually needed to be in New York City. So, when they ran for the cooler pastures of their summer homes, the volume of trading would decrease, and the volatility would ramp up. Of course, these days, you can trade from anywhere at any time, and a great deal of the market’s volume is actually made up of computers that don’t care how hot it is outside. Does Sell in May and Go Away Actually Work? Pretty much everything works sometimes if it is a Yes/No question. If you go to Vegas and bet on black, you’ll win eventually. Same thing with betting whether it will or will not rain. For 2016, the sell in May and go away strategy isn’t officially over, so it might still end up being correct. But, today, the S&P 500 hit an all time hight, making the strategy a loser, so far at least. In fact, very little of this summer has been …

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Did He Really Recommend Stock Picks?

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“He recommended Amazon and Apple. What is he recommending now?” “He predicted the market crash of 2007. Here’s what he says now.” And so on. You may have seen ad headlines just like the ones above recently. The specifics change, but the idea is always the same. Here is a person who predicted a certain event, or recommended certain stocks at the perfect time, and if you would have followed that advice, you would have made a ton of money. That being the case, shouldn’t your find out what they are recommending or predicting now? Did He Really Predict Stock Market Moves? If you doubt that these people made these recommendations, or predictions, I admire your skepticism. However, these ads and their subjects can often back up these statements with records showing that they did, indeed, predict or recommend the perfect stock moves at the perfect time. So, should you run out and give them your money and subscribe to their newsletters? To answer that question, let’s backup for a second. There is a scam whereby a company claims to be able to predict the winners in certain sporting events so you can bet on them and make money fast. …

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Microsoft’s LinkedIn Mistake

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There is an interesting post over at Mashable about the failure of Tumblr to make any progress in righting the ship at Yahoo. The author makes the argument that Yahoo, and Marissa Meyer, somehow “derailed” Tumblr, when the reality is that Tumblr was a money burning machine about to go bankrupt without yet another infusion of financing when Yahoo rode to the “rescue” with a billion dollar buyout offer. Most analysts expect Yahoo to write off every single dollar related to the acquisition. In other words, it was a billion dollar waste of money. Microsoft’s $26 Billion Blunder This brings us to this week’s stunning blunder by Microsoft. The company announced that it would pay $26 billion to acquire LinkedIn. LinkedIn, like Tumblr, does not make a profit, though it isn’t teetering on the verge of shutdown. LinkedIn, like Tumblr, has a very specific user base that has peaked. The company reported a $66 million loss for last quarter, and a loss of $166 million for 2015. In other words, Microsoft just paid billions of dollars for a company that will cost it hundreds of millions of dollars. The truly bizarre part of this acquisition is that Microsoft’s current CEO, came on …

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Stock Market Back Up Over 18,000

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I spend a lot of time telling people not to read too much into the short-term moves of the stock market, no matter how compelling the narrative is at the time. In the past 12 months, there have been two pretty significant meltdowns attributable mainly to investors worried about China or Europe, or whatever. I plan to develop a system that takes a screenshot each day of Marketwatch and CNN Money, or others just so that you can scroll through the comings and goings of each day. I can clearly remember numerous articles as the markets were falling in January and February about how this was only the beginning of a massive collapse, and others like that. Now, just a few months later, the same website is publishing articles about the market being back up above 18,000 for the first time since July last year. The point I’m making is that with the value of a little hindsight, or just a longer term view, it is clear that a lot of the recent volatility is a result of a market that went too high, too fast, for too long without any sort of correction. A couple of correcting down blips …

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