There has been a lot of talk recently about a possible double-dip recession. I think many investors are overreacting, not because I think another recession is unlikely, but because most people don't really know much about the economy and how economies work in general (myself included). The economy is too large and complicated for anyone to fully comprehend. It's a worldwide complex adaptive system with billions of moving parts. Trying to predict the economy is like trying to predict the stock market.
The cover of the August 30th issue of Barron’s might well have read “Abandon Hope All Ye Individual Investors Who Enter Here” (apologies to Dante Alighieri). First, Alan Abelson informs us that the deck is stacked against us, then Vito Racanelli tells us it’s not a stock picker’s market, and later on Jim McTague explains how the May 6th Flash Crash might have been rigged. What’s an independent investor to do? Follow the herd into the bond market? Find refuge in cash?
is is my August investment letter regarding my dividend value model (J:HDGB). As you know the models goal is to seek and attain above average dividend yield with some capital appreciation while minimizing market risk. I must admit that beating the index was not the intended goal of this model. However I am proud to point out that the model is still beating the S&P 500 as of September 3, 2010, which remains remarkably encouraging.
The S&P 500 has fallen approximately 13% between August 27, 2010 and its recent April 23, 2010 high and being 90% cash during this period was not a bad place to be. The lower market in August allowed us to put a bit more money to work. We added Chipmos Technologies (IMOS) and Bank of America (BAC). We believe both will contribute to long term future performance.
August 30, 2010: The S&P 500 index is down 4.94% for the month of August through August 26, 2010. I see a lot of good values among the top ten stocks in the S&P 500 by market cap. Exxon Mobil (XOM), Apple (AAPL), Microsoft (MSFT), and Proctor & Gamble (PG) are the top four and trade at comparatively low forward earnings estimates. Apple is the only one on the list with significant growth prospects over the next ten years or so and it trades less than twenty times trailing earnings as of August 30, 2010.
Despite the good economic news investors enjoyed late last week, U.S. markets fell today, the first trading day after the Labor Day holiday weekend. The Dow Jones Industrial Average fell 106.86 points to 10,341.07 and the Nasdaq lost 24.86 points to close at 2,208.89. The S&P 500 closed at 1,091.85 […]
Covestor Model manager James Hofmann’s Dividend Growth model has not only outperformed the S&P 500 for the past two months, but it has also managed a 9.24 percent return in July. We sat down with James to learn more about his investing decisions and to find out how he finds […]
The below text is licensed to Covestor Ltd. (“Covestor”), by Dan Plettner. Such text may be disseminated only by Covestor. Dan Plettner invests and receives income for securities research, including “buy-side” research. Dan licenses his own real time trading data to Covestor Ltd. (“Covestor”). Covestor is a Registered Investment Advisor […]
The below text is licensed to Covestor Ltd. (“Covestor”), by Dan Plettner. Such text may be disseminated only by Covestor. Dan Plettner invests and receives income for securities research, including “buy-side” research. Dan licenses his own real time trading data to Covestor Ltd. (“Covestor”). Covestor is a Registered Investment Advisor […]
The Department of Labor released August’s employment numbers on Friday. Overall, August saw a gain of 67,000 jobs in the private sector, a number that exceeded expectations. Although the unemployment rate also increased to 9.6 percent, the news was not devastating because most of that increase was the result of […]
Covestor model managers Epic Advisors added a couple of new positions to their Bottom Up Analysis Agg model this week. In this model, Epic Advisors uses fundamental analysis and market timing when determining which positions to add. The model is aggressive and mixes core, long-term hold purchases with day trading […]
The National Association of Realtors (NAR) released the July results for the Pending Home Sales Index today. Thanks to contracts for home sales signed in July, the index rose 5.2 percent. The chief economist for the NAR said that home sales will still be “soft” in the coming months. This […]