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Sovereign Debt

The Dow Jones Transportation Average is still very close to its all-time high, and so are countless component companies. The airlines, in particular, have been very strong in a classic bull market breakout performance. Many of these stocks have roughly doubled over the last 12 months. Commensurate with…

It is earnings season and corporate numbers are plentiful. Blue chips are mostly reporting decent financial metrics, but I want to address the other side of the equation. Investment risk in many capital market assets is still very high. And the reason why it’s very high is the…

Something big happened at the beginning of the year—Wall Street gave up on Washington. I’ve been trying to figure out how this incredible stock market action started at the beginning of the year. Things were trending fairly normally, and then institutional investors just started buying—blue chips first, a…

“Opportunity cost”—it’s a phrase used in microeconomic theory to denote the costs that are forgone by not having your resources in the highest returning assets. It is a phrase that’s pertinent to the stock market. Without question, I remain completely taken aback by what has transpired with the…

The biggest economic center in the global economy, the U.S., showed dismal growth in the last quarter of 2012. Sadly, the first quarter of 2013 is looking to be the same. Demand in the country is anemic at best as consumers are struggling. New durable goods orders in…

A report from Standard & Poor’s (S&P), the credit rating agency, indicates there is more than a one-third chance that Japanese sovereign debt could face a downgrade. The report stated, “…the continuing prospect arises from risks associated with recent government initiatives and uncertainty of their success.” (Source: Janowski,…

It is absolutely critical that you evaluate all your holdings for risk. The U.S. stock market needs to correct, but the sovereign debt crisis in Europe and the euro currency together remain a festering powder keg. The real problem for the euro is the lack of leadership—in banking…

When the U.S. equities market crashes, most foreign stocks do as well. But when it comes to capital appreciation, the correlation ends. Domestic Chinese stocks experienced a small resurgence lately, but they are still well down from their peak in 2007. China is still very much an emerging…

There is a serious problem in the gold mining business these days, and it’s not because of the stagnant spot price. Costs are going up industry-wide, and it is making buying gold stocks much less attractive. Gold prices have been in consolidation for about a year and a…

Over the years, I’ve seen a lot of wacky things in the stock market, from spectacular capital gains to equally spectacular wealth destruction (often from the same companies). Even the best companies on the stock market that offer rising dividends can crash. Remember the dot-coms? Those stocks shot…

The breakdown in Apple Inc.’s (NASDAQ/AAPL) stock market price continues to be significant, and if the position drops to the $500.00-per-share level, it will represent a 29% drop from its recent all-time high on the stock market. It’s fair to say that Apple’s profitability is now well entrenched,…

The S&P 500 had a pretty good year in 2012, up approximately 11.5% not including dividends. But, as is the norm in the current stock market, trading action remained choppy without any real trend. The S&P 500 began 2012 strongly, rising consistently until May, when the index gave…

If you’ve heard the old stock market adage “Sell in May, and go away,” you might consider 2012 as being the perfect year to represent this trend. The S&P 500 had a strong start to the year, appreciating to over 1,400 from 1,250. At the beginning of May,…

There is now more evidence that companies with huge cash hoards are returning the money to shareholders, rather than making any bold new investments themselves. Last Friday, General Electric Company (NYSE/GE) announced that it would increase its quarterly dividend to $0.19 a share, up from $0.17, and it…

This morning there’s news that Italy’s Prime Minister Mario Monti could be out and former Prime Minister Silvio Berlusconi back in, clouding the future of the eurozone’s third largest economy. With politics at play in many troubled eurozone countries, and as I have been harping on in these…

Auto sales data just released for the month of November have caught my eye. Auto sales in the U.S. economy have increased to a level similar to the level in January 2008—15% in November 2012 from November of 2011. Car sales are now running at the annualized rate…