Weekend Reading

by Adam Zuercher on August 5, 2011

in Uncategorized

With all of the action and volatility in the markets this week there will not be a shortage of information and opionions on the web.  Here are a few things I read this week that I thought were relevant to our readers.

  • If you only read one thing this weekend it should be this note from Brian Wesbury and Bob Stein at First Trust.  The report was written after the 500 point drop in the Dow on Thursday.  They do a nice job of pointing out the best possible explanation for the drop: European debt problems, specifically Italy.  I agree with their conclusion that the recent selloff in the market appears to be more of a technical correction than a fundamental change in direction.  Of course that doesn’t mean that the correction is over.  The market has created some nice buying opportunies for value based investors looking for strong fundamentals.
  • Next, I want to point out that as of last week Apple has more cash than the US Government. As I like to tell clients, we are investors in businesses, not the US Government.  Apple is a great example of a company that has thrived throughout the past recession.  Even though the US economy was in the tank, Apple continued to innovate and grow their business.  Each quarter they were profitable and even more important they have continued to grow their earnings at an incredible pace.  The company has a fortress-like balance sheet.  The stock price has followed the fundamentals of the company.  This is why we believe investors can still make money even during a recession or at a time when all of the headlines are focused on a slow growing economy.

Enjoy the weekend!

Disclosure: Long AAPL.

 

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Much has been said about the US debt.  In July alone the Google search traffic for “us debt” has surged to over 7.5X the average search volume for this term.

It is projected that, unless the U.S. government fixes the budget, the  US national debt (credit card bill) will topple 15 trillion by Christmas 2011.

$15,000,000,000,000!

Ever wander what $15 Trillion looks like? Click here for a nice visualization.

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Q4-2010: Another Great Year for Stocks

January 11, 2011

Stocks finished the fourth quarter with a strong December.  2010 was the second straight year of gains for stocks. Here are the details: Dow Industrials Up 789.46 points this quarter, or 7.3%, to close at 11577.51. In December, the Dow was up 571.49 points, or 5.2%. Up 31.9% over the last two years. Up 1149.46 [...]

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Proclamation of Thanksgiving

November 23, 2010
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As we approach Thanksgiving, I am reminded of how often our culture overlooks this important holiday.  The stores are already lines with Christmas trees and Black Friday sales that will draw the shoppers attention toward the most profitable holiday in December, rather than the holiday that begs us to stop, and be thankful.  The following [...]

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Think Twice about your Password

November 22, 2010
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It took researchers at Georgia Tech 2 hours using graphics cards to crack 8-character computer passwords.  This compares with the 17,000 years (149,022,000 hours) it would take them to crack 12-character passwords. Bottomline:  With much of today’s consumerism taking place via usernames and passwords on the Internet, you may want to think twice about your [...]

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Friday Fun

November 19, 2010
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Turns out that there are 500 boxes of all Cheerios varieties sold per minute in fiscal year 2010.  Of the 500 sold, Honey Nut Cheerios (my personal favorite) claims the top spot followed by regular Cheerios.  Those 2 cereals hold the #1 and #2 spot among top-selling cereals in the US.  Cheerios is a brand from [...]

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Point to Ponder – Uncertainty

November 5, 2010

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” – George Soros

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Q3-2010: Stocks Surge Ahead

October 1, 2010

After a sell-off in the second quarter, stocks reversed course during the third quarter to stage a nice recovery.  Most of the gains for the quarter came during the month of September.  This was a surprise by many as September has historically been a bad month for stocks. Here are the details: Dow Industrials Up 1014.03 points this [...]

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5 Books That Have Shaped My Investment Philosophy

September 28, 2010

This morning Adam Joyce asked this question on LinkedIn: I responded with the following answer: This got me thinking about how I’ve educated myself about investing.  The internet has, by far, been my number one source of information.  However, if I really want to dig in to a topic or learn about something in detail [...]

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Cheap Stocks

September 16, 2010

One way to evaluate stocks and bonds is to compare the earnings yield of the S&P 500 with the yield on the 10-year US Treasury bond. In total, S&P 500 companies reported after-tax annualized earnings of $716 billion in the second quarter and had a market capitalization of $9.3 trillion. In other words, for every $100 [...]

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