Jim Rogers says that European countries are still avoiding their main problems — too much spending and too much debt. He tells Bloomberg that proposed solutions to the Eurozone crisis that don’t address those issues may make markets rally in the short term, but won’t solve the long-term issues. Rogers also questions whether the Euro currency will make it another 10 years. He says he’s shorting European stocks, American tech stocks, and emerging market stocks, and long commodities and certain currencies. Rogers also discusses why he thinks the Federal Reserve is misleading the public.
Each week, we take a look at which stocks John Reese’s Validea.com Guru Strategy computer models have newfound interest in, and which they have soured on. Here’s a look at some of the stocks John’s strategies have upgraded or downgraded today.
Are historically high profit margins for U.S. firms sustainable, or will they come bouncing back to the mean — and throw a wrench into the stock market in the process? Blackrock’s Bob Doll and GMO’s Jeremy Grantham have very different takes, according to Bloomberg. Doll says a weak job market and labor-saving technologies have helped push margins to their current record high levels. And, he doesn’t see either of those trends abating. Sluggish job growth and low interest rates mean that an increase in costs isn’t a threat right now. “We didn’t need a strong economy to get margins high,” […]
Marc Faber of the Gloom, Boom & Doom Report says equities may rally in the short term, but he doesn’t think it will be a long-lasting bullish move. “The rally came from a very oversold level,” Faber tells FOX Business Network. “We have a very strong support on the S&P between 1100-1150. And usually the December month is a strong month as well as January so we have seasonal strength and oversold conditions and we can rally, but I don’t think you should expect too much. I think we’ll get into overhead resistance when the S&P rallies another 5% or […]
While the success of retailers on Black Friday can send stocks up or down in the very short term, Mark Hulbert says investors shouldn’t think that such market moves are a harbinger of things to come for the rest of the year. “The initial reports of how retailers are doing on Black Friday are an unreliable guide to how the stock market performs through the end of the year,” Hulbert writes for MarketWatch. “In fact, more often than not, it’s been a bad omen whenever those initial reports are especially positive and stocks soar.” Hulbert says that’s the conclusion he […]
History has shown that investors who stick to disciplined, fundamental-focused strategies give themselves a good chance of beating the market over the long haul. And one of the investment gurus who has compiled the most data on that topic is James O’Shaughnessy, whose book What Works on Wall Street became something of a bible for investment strategies when it was released 15 years ago. Now, O’Shaughnessy has released an updated version of his book, with a plethora of new data on various investment strategies. Using data that stretches back to before the Great Depression in some cases, O’Shaughnessy back-tests numerous […]
In his latest article for Seeking Alpha, Validea CEO John Reese says that Warren Buffett’s recent IBM buy actually isn’t all that out of character for the tech-wary Buffett — and says other “Buffett-esque” tech stocks are out there right now. “While Buffett’s IBM move was surprising given [his previous tech sector] comments, it wasn’t all that surprising if you look at the fundamentals — which are what my Buffett-inspired Validea.com ‘Guru Strategy’ does,” Reese writes. “My Buffett-based model identifies stocks that have the quantitative characteristics Buffett looked for while building his empire. It doesn’t always jive with Buffett’s real-time […]
Top value investor Mario Gabelli says increased efforts in the shale and natural gas arenas would help spur job growth, make the U.S. less dependent on imports for energy, and help with the country’s deficit. Gabelli also tells FOX Business Network that tax reform is key to helping American competitiveness, and says he’s finding interesting opportunities in utilities right now. He adds that he does not expect China’s economy to have a “hard landing”.
Blackrock’s Bob Doll says that he thinks Europe is already in a recession, and that solving the continent’s debt crisis is not a matter of economics but instead one of political will. Doll tells Yahoo! Finance’s Breakout that he thinks political leaders will eventually show that will, but that the longer they wait the worse the situation will get — and the more expensive it will be to fix it. Doll says the global economy is in a slowdown — “with the notable exception of the United States”. He says the European Central Bank needs to increase the rate of […]
The field of neuroeconomics has gained a lot of traction in recent years. But Yale Economist Robert Shiller says a “neuroeconomics revolution” has only just begun. In an article for Project Syndicate, Shiller says this revolution has “passed some key milestones quite recently”, in particular the publication of Paul Glimcher’s Foundations of Neuroeconomic Analysis. “Much of modern economic and financial theory is based on the assumption that people are rational, and thus that they systematically maximize their own happiness, or as economists call it, their ‘utility,’” Shiller writes. Glimcher and others are skeptical of that, and are looking for a “physical […]
Hedge fund guru Barton Biggs has turned bearish, saying he thinks the odds of a recession in the first half of 2012 have increased to about 60%-70%, and that the “current spurt in the U.S. economy … is going to fade as we get into next year.” Biggs tells Bloomberg that the apparent failure of the U.S. deficit-reduction supercommittee and the continuing trouble in Europe are behind his change in tune. He thinks we’ll see the stock market decline “at least back to the lows of last summer, and God forbid maybe even a testing of the lows of 2008-2009,” […]
Top fund manager David Winters says he’s finding value in Western companies with exposure to emerging markets, the type of companies that have helped his Wintergreen fund produce strong returns over the past few years. “We continue to see well-run companies with meaningful exposure to the growing markets of Asia, South America, and Africa selling for attractive valuations,” Winters tells Morningstar.com. “Many of these companies are based in Western countries with Western-style management and well-established rule of law and accounting standards, but they derive a meaningful amount of business from the growing economies of the developing world.” Winters says that […]
Warren Buffett is looking for investment opportunities in Japan, saying that neither the huge earthquake that devastated the country earlier this year nor the recent scandal surrounding Olympus Corp. have soured him on Japanese firms. “There are lots of opportunities in Japan,” Buffett said during a visit to the country to visit a tool-making company that is majority-owned by one of the subsidiaries of his Berkshire Hathaway, Bloomberg reports. “We’re looking for companies that have some kind of sustainable competitive advantage. … The fact that Olympus happens here or Enron happens in the U.S. doesn’t affect our attitudes at all.” […]
As emotional creatures, human beings are prone to a multitude of behavioral biases that can help them in daily life, but hurt them badly in the investing world. Even the best investors can slip up and let these biases lead them astray, so today we’ll take a look at an article written earlier this year on “confirmation bias” by Kiplinger’s Bob Frick. Confirmation bias, Frick writes, is “the human tendency not only to hear what we want to hear but also to seek out those with similar opinions. This confirmation bias is a key component of investor overconfidence, which leads […]
In his latest column for Forbes.com, Validea CEO John Reese takes a look at several stocks from the oil and gas industry. “When it comes to big oil and gas companies and their stocks, it’s hard to look past the negatives,” Reese says, citing BP’s huge 2010 spill, and political and environmental pressures. “But whether you like it or not, big oil companies are likely here to stay for quite a while. While alternative fuels have made some inroads in the energy sector, oil and gas remain the dominant players. And many of the big oil companies have been dipping their […]