Are Buybacks Keeping the Bull Market Alive?

Archive for October, 2018

Are Buybacks Keeping the Bull Market Alive?

By Jim Walker on Wednesday, October 31st, 2018 | Comments Off

The bull market has had a historic run. And, even as it ages and becomes more volatile, the S&P 500 has still not had the substantial correction that has been predicted by many. One factor that keeps stock prices from falling too far is stock buybacks. We are wondering, are buybacks keeping the bull market alive? And, what else are they doing?
Stock Buybacks
Just a couple of months ago Forbes wrote about stock buybacks by Apple and other companies. The article is informative and helps shed light on one of the reasons that the market and especially the FANG […]

Should You Invest in the FANG on the Correction?

By Jim Walker on Wednesday, October 24th, 2018 | Comments Off

The long-running bull market is starting to correct. We, and many others, have suggested that investors may want to get out of growth stocks and switch to value stocks in preparation for a market crash or at least a painful correction. The rationale is that value stocks are companies with low debt, cash in the bank, and property unencumbered by excessive debt. However, the basis of intrinsic stock value is forward looking earnings. And, the best earnings in recent years have come from tech stocks like the FANG (Facebook, Amazon, Netflix, and Google-Alphabet).
Protected from a Trade War with China
One of […]

Defense Stocks for a New Nuclear Era

By Jim Walker on Monday, October 22nd, 2018 | Comments Off

The USA is about to exit a Reagan Era nuclear weapons treaty with the Russians. This could set off another arms race in weapons of mass destruction. It could also provide profitable investments for defense stocks in a new nuclear era. Zacks suggests two defense stocks to buy if we end up in another nuclear arms race with the Russians and Chinese.
President Donald Trump has decided to withdraw the United States from the landmark nuclear weapons deal signed with Russia in 1987 that banned both nations from owning, producing and test-flying nuclear missiles.
While Trump’s recent decision may not be a […]

How Long into the Selloff Should You Wait to Pick Up Bargains?

By Jim Walker on Wednesday, October 17th, 2018 | Comments Off

The S&P 500 is down 7% within the last month and was down 9% before recovering slightly. Many bears are now convinced that the end of the bull market is upon us and that the market is due for a more significant downturn. Our question is how long into the selloff should you wait to pick up bargains? CNBC writes that the selloff is not over.
“This is the second decline of this year of 5 percent or more and two out of every time we had more than one decline in a year, the second decline was sharper than the […]

How to Minimize Your Investment Losses in the Next Recession

By Jim Walker on Monday, October 15th, 2018 | Comments Off

The current volatility in the US stock market is reminiscent of the days preceding both the dot com crash and the 2008 market crash that ushered in the Great Recession. It may well be time to consider how to minimize your investment losses in the next recession. The 2008 crash destroyed about $7 trillion in equity value. A crash today might destroy as much as $20 trillion in equity value according to Investopedia.
The recent stock market retreat, which has sent the S&P 500 Index (SPX) down by 5.9% from its intraday high on Oct. 3, has intensified the debate between […]

How Will the Election Affect Your Investments?

By Jim Walker on Wednesday, October 10th, 2018 | Comments Off

The mid-term elections are almost upon us. It is almost a certainty that there will be a substantial shift in the balance of power in congress. Although smart investors keep their politics and their investment strategies separate, it is still a good idea to consider how the election will affect your investments. In this regard, Forbes has some thoughts about the risk to stocks from the mid-term election.
We currently think there is only one scenario that has a reasonable probability of happening, looking at current political polling. (Yes, we get that polls are flawed but, in the aggregate, they do […]

Which of Your Investments Will Suffer as Interest Rates Go Up?

By Jim Walker on Monday, October 8th, 2018 | Comments Off

The US Federal Reserve has raised interest rates again. And, more rate increases are in the cards for December of 2018 and into 2019. Which of your investments will prosper and which of your investments will suffer as interest rates go up? CNBC weights in on this question with an article about the best performing stocks in the Dow as interest rates go up.
While stocks like J.P. Morgan, Goldman Sachs and Visa do well when rates are surging, Walmart and Coca-Cola struggle.
Walmart averages a loss of 0.8 percent when rates rise 25 basis points or more in one month, the […]

Do Your Investments Have Pricing Power?

By Jim Walker on Wednesday, October 3rd, 2018 | Comments Off

A trade war is becoming more certain and the effects of the Trump tax cut are wearing off. Which of your investments will retain their value and which will correct? Earnings have been the driver in this bull market. But, which stocks will continue to display strong earnings in a full-fledged trade war? Companies that dominate their market niche are typically able to raise prices without losing many customers. This is pricing power. Do your investments have pricing power?
CNBC writes about stocks to buy to ride out a trade war with China.
Goldman Sachs says there is still an investment strategy […]

How to Spot Overpriced Investments

By Jim Walker on Monday, October 1st, 2018 | Comments Off

The S&P 500 has been on a steady upward climb for the last nine and a half years. As the market climbs higher and higher the smart investor needs to know how to spot overpriced investments. Ideally, one has bought low at the beginning of the bull market and can sell high before the market or individual stocks correct. The S&P 500 index is four times greater than it was in February of 2009. However, this year the vast majority of gains within the S&P 500 group have come from a handful of well-known tech stocks. CNBC noted that just […]

Archive for October, 2018