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Article Index

The Nobel Prize for Market Timing Goes to… Cliff?

By , Editor, Permanent Wealth Investor -

According to the Efficient Market Hypothesis (EMH), the best - and perhaps only - way to outperform the market over time is simple:
First, claim that beating the market over time is virtually impossible. Then, take home $1.2 million for "proving" it.
That was Professor Eugene Fama's approach, anyway, after co-winning the Nobel Prize in economics.
Don't get me wrong. As a professional investor and portfolio manager, I believe Professor Fama's EMH has many valid ideas. But fundamentally, people like us (and Buffett, and Soros, and Rogers, and Lynch, and Einhorn, and Paulson, and Icahn, and Ackman) never swallow EMH whole.
Ironically, neither does Clifford Asness.
Why would one of Fama's brightest students decide to ditch EMH, and pick stocks and time the market instead?

Proving EMH "right" may be worth millions (to Fama). But proving it "wrong" is worth billions..

Stock Market News Today Why We Predicted This 10% Gainer Would Soar

By , Money Morning -

Stock market news today focuses on winners and losers in the tech and consumer spaces, as well as how the S&P 500 will come off of its largest weekly decline since June.

Last week was tough for stocks since this year has been filled with rallies. Stocks fell as investors tried to understand the timing of the Fed's tapering of its bond-buying program.

Surprisingly, the market still seems very sensitive to any news on the Fed cutbacks.

This week, the market may continue to react to any news from the Fed, although other economic indicators are likely to be in the foreground of investors' minds.

Stock market news today starts with Japan, which we learned saw gross domestic product rise 2.6% at an annualized pace from April to June - well short of the 3.6% growth economists expected. The Nikkei was down more than 5% last week and is down another roughly 1% this morning.

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Stock Market Today: Can Earnings Drive Market Higher in July?

By , Contributing Writer, Money Morning -

The bulls came out of the gate at full-speed at the opening of the stock market today.

Less than a half-hour into trading, the Dow Jones Industrial Average jumped 121.99, or 0.81%, to 15,241.40 The Standard & Poor's 500 Index climbed 12.19, or 0.75%, to 1,644.08. The Nasdaq added 14.01, or 0.41, at 3,493.60.

Optimistic investors appear to be betting the second quarter's earnings will come in ahead of scaled-down forecasts.

Pre-announcements have certainly been extremely negative. According to Thomson Reuters, the ratio of negative to positive comments is 6.5 to 1, more than two-and-a-half times the normal pace and the most negative reading since 2001.

Overall, S&P 500 earnings are projected to have grown 1.6% in Q2 from a year ago, while quarterly revenue is expected to increase 2.9%.

But those estimates could be on the light side.

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Deal Making is About to Get White Hot

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

Not only is the market rally on, but trigger-happy bankers and private equity wheeler-dealers are about to send it even higher.
The reason is simple: There are trillions of dollars of cash just sitting on the sidelines looking for a deal.
That means deal action - of all kinds - is about to get white hot.
In fact, the combination of positive capital flows and the pursuit of greater economies of scale has us at the beginnings of a multi-year deal-driven bull market.
Here's where we are and where we're going next.

Stock Market Today: QE3 Sugar High Boosts These Stocks

By , Money Morning -

The major headlines in the stock market today include the markets' reaction to QE3, consumer prices rising, and shaky retail sales.

  • The QE3 rally climbs higher - After the Federal Reserve announced its latest stimulus measure, QE Forever, as some are calling it, the markets soared, all reaching multi-year highs. Commodities and financials in particular did well. Oil is approaching $100 a barrel, gold is nearing $1,800/oz., Bank of America (NYSE: BAC) has gained over 10% this week and JPMorgan Chase & Co. (NSYE: JPM) has now made up all its losses since the "London Whale Trade." The dollar as expected took a beating, falling to its lowest level since May, and the euro is now over $1.31. Yet, the question is whether QE3 will be a short-term or long-term rally. "It was a strong signal from the Fed and a very welcome move but we'll have to wait and see if this is more than a one or two-day wonder for the market," Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London told Bloomberg News. "All of this central-bank policy removes a degree of uncertainty that has been plaguing markets."
  • Retail sales rise but outlook grim - The Commerce Department reported that retail sales increased 0.9% in August from a month earlier following a 0.6% gain in July. This was spurred by better auto and gasoline sales, but outside of those categories there was little good news. Excluding those two items, retail sales inched up 0.1% with weak electronic, clothing, and appliance sales. Core retail sales, which exclude automobiles, gasoline, or building materials fell 0.1% and is more closely related to consumer spending within the U.S gross domestic product calculation.

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