Atilla
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Pat494
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LONDON (ShareCast) - The main US equity benchmarks are now being called to open on a mixed footing, with a half percentage point loss in the Nasdaq (Nasdaq: ^NDX - news) -100 while the Dow Jones Industrials and S&P 500 (SNP: ^GSPC - news) are being called to open roughly flat.
Oil services group Schlumberger (NYSE: SLB - news) has announced that it will take a hit on its fourth-quarter earnings from contract delays in some regions and weaker-than-expected North America activity.
Shares of Adobe Systems (NasdaqGS: ADBE - news) are flying after the software company reported sales and profit that topped analysts' projections.
Upbeat economic data at first glance
Industrial (Mexico: ST2000.MX - news) production grew at a 1.0% month-on-month pace in November (Xetra: A0Z24E - news) , well ahead of the 0.3% gain forecast.
The US consumer price index rose at a 1.8% year-on-year pace in the month of November, after a reading of 2.2% for the month before (Consensus: 1.9%).
The core rate dropped to a 1.9% clip, after a rise of 2.0% (Consensus: 2%).
Slight rise in crude futures
Front month crude futures are moving higher by 0.70% to the 86.49 dollar mark on the NYMEX.
10 year US Treasury yields are now falling by 2 basis points to the 1.71%.
.
.
Oil services group Schlumberger (NYSE: SLB - news) has announced that it will take a hit on its fourth-quarter earnings from contract delays in some regions and weaker-than-expected North America activity.
Shares of Adobe Systems (NasdaqGS: ADBE - news) are flying after the software company reported sales and profit that topped analysts' projections.
Upbeat economic data at first glance
Industrial (Mexico: ST2000.MX - news) production grew at a 1.0% month-on-month pace in November (Xetra: A0Z24E - news) , well ahead of the 0.3% gain forecast.
The US consumer price index rose at a 1.8% year-on-year pace in the month of November, after a reading of 2.2% for the month before (Consensus: 1.9%).
The core rate dropped to a 1.9% clip, after a rise of 2.0% (Consensus: 2%).
Slight rise in crude futures
Front month crude futures are moving higher by 0.70% to the 86.49 dollar mark on the NYMEX.
10 year US Treasury yields are now falling by 2 basis points to the 1.71%.
.
.
Pat494
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The "Oracle of Omaha" and "America's Greatest Investor" are well-earned nicknames for the renowned Warren Buffett.
Through a long and storied track record of success, he's created billions in value for himself and his shareholders.
The heart of his investing strategy has been remarkably consistent. He seeks out undervalued assets -- things the market shies away from -- with "boring railroads" and "dead newspapers" being two more recent examples.
As a value investor, Buffett looks to buy companies cheap relative to their book value, with high return-on-equity (ROE) percentages.
Because of his prudence and approach, I'm not the first investor to say he's been one of my heroes through the years.
His style is a stark contrast to the day and age in which we live. It seems that investors want to play the momentum game of "buy high, sell higher." That's dangerous to do over time -- just ask all of the people who were flipping houses and got caught when the real estate bubble popped.
Additionally, many investors today seem to think that they need to have computers running their investments and making trades by the millisecond. "Long term" to them is days, maybe weeks at most.
However, Buffett has never been tempted to play this casino game. He thinks of investing as buying a company (or a piece of a company) via the stock market. He focuses on what the value of the company is and not just the price at which a stock trades in the market.
Learning his approach taught me how to properly analyze a stock from a fundamental perspective. That's important, considering that a number of companies that the stock market falls in love with are not fundamentally sound at all.
Take for example Amazon.com, (Nasdaq: AMZN). Yes, we all know that they're the world's largest online retailer and can offer thousands of new and used products like books and toys that you just can't get in stores. And unlike most of the other dot-com companies that went belly-up when the tech bubble burst, it's been one of the few to not only survive, but thrive.
But right now, the market is valuing the company at over $113 billion -- and it isn't even reporting a profit right now! While the company is expected to start making money again, it could still trade at over 70 times earnings. Given their slowing growth, it's tough to see why the company should trade at such a huge premium to the overall market.
And on the other hand, there are other stocks that the market doesn't view as being very attractive which are fundamentally very sound.
Take for example Brazilian mining firm Vale (NYSE: VALE), which has suffered on two fronts. Brazil used to be a hot territory for emerging market investors, until it decided to cut back on foreign investment to cool down its heated economy. And, of course, at a time when commodity prices have taken a breather, it's been tough to attract capital in that sector.
But it's a company that trades at 7 times forward earnings, and only a fraction above its book value (Amazon trades at over 13 times book value by comparison). While the market has low expectations, the company has an operating margin of nearly 30 percent and revenue growth is at 6.5 percent, a pretty good number for a commodity-backed business in today's market.
Finally, unlike Amazon, which doesn't pay shareholders to sit through the ups and downs of the market, Vale pays a 4.5 percent dividend yield.
It's counterintuitive to most, but I'd rather have the latter, because in the end, when it comes to your money and mine, there has to be some serious meat and potatoes behind the stock -- not just hype and hot air.
A Portfolio That Buffett Would Envy
Buffett, through fundamental analysis, avoids the hype that causes so many other investors to make bad judgment calls. It doesn't mean that every stock picked in this manner will become profitable, but it does provide an edge in the market because it's a consistent way to size up companies.
Thinking about all this recently led me to look up how the investments I have selected for members of my Ultimate Wealth Report portfolio stack up against the S&P 500, and Warren Buffett's company Berkshire Hathaway (NYSE: BRK-B).
The S&P 500 trades at a P/E in the 18s as of our press date, with a price-to-book ratio of around 2.45 and a dividend yield of about 2%. Berkshire Hathaway's stock (NYSE: BRK-A) is trading at a P/E of 16.8 and a price-to-book ratio of 1.38. Famously, it doesn't pay out a dividend at all. (There's never been a stock split on the Class A shares either, making it the world's most expensive stock at $160,000 per share.)
In comparison, we've bought our stocks at an average P/E of 9.30 with a price-to-book ratio of 1.12 and with an average dividend yield of 3.15 percent.
That means we're buying up companies that are 48 percent cheaper than what Warren Buffett's Berkshire Hathaway is trading at, when looking at its earnings. In addition, we're picking them up 19 percent cheaper when looking at it from the book value perspective.
And, we are getting paid an average 3.15 percent dividend to boot.
Does this mean our stocks can't go down? No. "Good stocks" aren't immune to stock market corrections, but they do come back from these corrections.
Bad stocks, however, sometimes do not come back from major stock market sell-offs. That's the difference.
----------------------------------------------------------------------------------------------------
interesting
Do feel free to post up financial articles that interest you
Through a long and storied track record of success, he's created billions in value for himself and his shareholders.
The heart of his investing strategy has been remarkably consistent. He seeks out undervalued assets -- things the market shies away from -- with "boring railroads" and "dead newspapers" being two more recent examples.
As a value investor, Buffett looks to buy companies cheap relative to their book value, with high return-on-equity (ROE) percentages.
Because of his prudence and approach, I'm not the first investor to say he's been one of my heroes through the years.
His style is a stark contrast to the day and age in which we live. It seems that investors want to play the momentum game of "buy high, sell higher." That's dangerous to do over time -- just ask all of the people who were flipping houses and got caught when the real estate bubble popped.
Additionally, many investors today seem to think that they need to have computers running their investments and making trades by the millisecond. "Long term" to them is days, maybe weeks at most.
However, Buffett has never been tempted to play this casino game. He thinks of investing as buying a company (or a piece of a company) via the stock market. He focuses on what the value of the company is and not just the price at which a stock trades in the market.
Learning his approach taught me how to properly analyze a stock from a fundamental perspective. That's important, considering that a number of companies that the stock market falls in love with are not fundamentally sound at all.
Take for example Amazon.com, (Nasdaq: AMZN). Yes, we all know that they're the world's largest online retailer and can offer thousands of new and used products like books and toys that you just can't get in stores. And unlike most of the other dot-com companies that went belly-up when the tech bubble burst, it's been one of the few to not only survive, but thrive.
But right now, the market is valuing the company at over $113 billion -- and it isn't even reporting a profit right now! While the company is expected to start making money again, it could still trade at over 70 times earnings. Given their slowing growth, it's tough to see why the company should trade at such a huge premium to the overall market.
And on the other hand, there are other stocks that the market doesn't view as being very attractive which are fundamentally very sound.
Take for example Brazilian mining firm Vale (NYSE: VALE), which has suffered on two fronts. Brazil used to be a hot territory for emerging market investors, until it decided to cut back on foreign investment to cool down its heated economy. And, of course, at a time when commodity prices have taken a breather, it's been tough to attract capital in that sector.
But it's a company that trades at 7 times forward earnings, and only a fraction above its book value (Amazon trades at over 13 times book value by comparison). While the market has low expectations, the company has an operating margin of nearly 30 percent and revenue growth is at 6.5 percent, a pretty good number for a commodity-backed business in today's market.
Finally, unlike Amazon, which doesn't pay shareholders to sit through the ups and downs of the market, Vale pays a 4.5 percent dividend yield.
It's counterintuitive to most, but I'd rather have the latter, because in the end, when it comes to your money and mine, there has to be some serious meat and potatoes behind the stock -- not just hype and hot air.
A Portfolio That Buffett Would Envy
Buffett, through fundamental analysis, avoids the hype that causes so many other investors to make bad judgment calls. It doesn't mean that every stock picked in this manner will become profitable, but it does provide an edge in the market because it's a consistent way to size up companies.
Thinking about all this recently led me to look up how the investments I have selected for members of my Ultimate Wealth Report portfolio stack up against the S&P 500, and Warren Buffett's company Berkshire Hathaway (NYSE: BRK-B).
The S&P 500 trades at a P/E in the 18s as of our press date, with a price-to-book ratio of around 2.45 and a dividend yield of about 2%. Berkshire Hathaway's stock (NYSE: BRK-A) is trading at a P/E of 16.8 and a price-to-book ratio of 1.38. Famously, it doesn't pay out a dividend at all. (There's never been a stock split on the Class A shares either, making it the world's most expensive stock at $160,000 per share.)
In comparison, we've bought our stocks at an average P/E of 9.30 with a price-to-book ratio of 1.12 and with an average dividend yield of 3.15 percent.
That means we're buying up companies that are 48 percent cheaper than what Warren Buffett's Berkshire Hathaway is trading at, when looking at its earnings. In addition, we're picking them up 19 percent cheaper when looking at it from the book value perspective.
And, we are getting paid an average 3.15 percent dividend to boot.
Does this mean our stocks can't go down? No. "Good stocks" aren't immune to stock market corrections, but they do come back from these corrections.
Bad stocks, however, sometimes do not come back from major stock market sell-offs. That's the difference.
----------------------------------------------------------------------------------------------------
interesting
Do feel free to post up financial articles that interest you
Atilla
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Apologies for the late write up guys,
Here is the 7th week predictions in order of bulls to bears...
It looks like the Charge of the Light Brigade with the new highs - but what do I know...
Did someone mention Fed's bond-buying being wound back :?::?::?: yet?
Wishing you all good luck
Here is the 7th week predictions in order of bulls to bears...
It looks like the Charge of the Light Brigade with the new highs - but what do I know...
Did someone mention Fed's bond-buying being wound back :?::?::?: yet?
Wishing you all good luck
Attachments
Wow what a week.
That end of week breather was all of 40 odd Dow points yesterday and with normal action resumed today.
To think it was only 2 weeks ago people were talking about 1600 S&P and next two weeks we could be talking 1700 S&P.
I think 1700 is looking more and more likely now.
I doubt it will be next week, I think it will need some sort of a retrace before it breaks through 1700 In my opinion volume is too low to do it, but then what do I know, this market is on viagra so I'm going for 1685.
Who said sell in May?
:cheesy:
That end of week breather was all of 40 odd Dow points yesterday and with normal action resumed today.
To think it was only 2 weeks ago people were talking about 1600 S&P and next two weeks we could be talking 1700 S&P.
I think 1700 is looking more and more likely now.
I doubt it will be next week, I think it will need some sort of a retrace before it breaks through 1700 In my opinion volume is too low to do it, but then what do I know, this market is on viagra so I'm going for 1685.
Who said sell in May?
:cheesy:
Atilla
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Yes WOW indeed... That begs the question are these levels justified in terms of value offered by equities at these levels? imo I don't see a sudden explosion in pent up money waiting to be spent. I just see necessities that have to be met. So I'm more in the WOOWHAA - hold your horses Ted stage.
It also shows where my position is in the leagues tables.
Here are the results for week 7 and delighted to see papa smurf Pat take podium centre stage with the gold medal whilst Samspade and Gaffs make Silver and Bronze.
Well done to all three :clap::clap::clap:
I present to you papa smurf Pat when he was a sprightly Lad. A rare footage to be treasured.
. . .samspade79 .... . . . . ............. Pat ............... Gaffs1964
It also shows where my position is in the leagues tables.
Here are the results for week 7 and delighted to see papa smurf Pat take podium centre stage with the gold medal whilst Samspade and Gaffs make Silver and Bronze.
Well done to all three
:clap::clap::clap:I present to you papa smurf Pat when he was a sprightly Lad. A rare footage to be treasured.
. . .samspade79 .... . . . . ............. Pat ............... Gaffs1964
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M
malaguti
1670 for me please
Atilla
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1640 for me...
. Old image has been removed . Here's another
Yes WOW indeed... That begs the question are these levels justified in terms of value offered by equities at these levels? imo I don't see a sudden explosion in pent up money waiting to be spent. I just see necessities that have to be met. So I'm more in the WOOWHAA - hold your horses Ted stage.
It also shows where my position is in the leagues tables.
Here are the results for week 7 and delighted to see papa smurf Pat take podium centre stage with the gold medal whilst Samspade and Gaffs make Silver and Bronze.
Well done to all three
I present to you papa smurf Pat when he was a sprightly Lad. A rare footage to be treasured.
. . .samspade79 .... . . . . ............. Pat ............... Gaffs1964
. Old image has been removed . Here's another
Last edited:
wackypete2
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1641.5
