Companies buy fewer shares, but issue even less, reducing their share count and pushing up EPS

Companies continue to increase their shareholders’ returns through buybacks and cash dividends. These two expenditures, combined, reached $214.4 billion in the fourth quarter – the second highest level (Q3 2007 holds the record at $233.2 billion) and three times the Q2 2009 Bear market level ($71.8 billion). Helping companies do this are record earnings, record Read more […]

Don’t just do something, sit there.

At the beginning of this year, we suggested that 2013 might well have been a another tough year for active managers. Judging from the response received at the time, this expectation was somewhat controversial: the more common refrain was to point to falling correlations during 2013 and predict a return to “stock-pickers’ market.” In such an environment, Read more […]

Earnings Per Share 101

Types And Sources In the U.S., there are two main types of income: as reported and operating. As reported income, sometimes called Generally Accepted Accounting Principal (GAAP), is income from continuing operations and it excludes discontinued and extraordinary income. Both of these terms are defined by the Financial Accounting Standards Board (FASB) under GAAP. As Read more […]

The Fed’s March Rate Decision Could Determine If This Week Is A Lion or A Lamb For Bonds

Treasuries closed the week returning 1.32% as measured by the S&P/BGCantor Current 10 Year U.S. Treasury Bond Index.  The index is now returning 0.18% for the month and 4.13% year-to-date.  Continued concerns over the Ukraine political situation may have led to a demand for Treasuries as a flight to safety trade.  The auctions of $64 Read more […]

Touching Clovers Is Like Gold, Not VIX

Thus far on the blog, we have written a few pieces about busts in the stock market. David Blitzer wrote, “Whenever this bull market ends, it is likely to be with a bang, not a whimper.” He also wrote about Deflation, Debt and Disaster where he pointed out we may be on the edge of deflation, which Read more […]

Recent Interview: Commodities To Upstage Stocks

I thought you might be interested in a recent article, Gunzberg: Commodities To Upstage Stocks, written by Cinthia Murphy on March 11, 2014 on etf.com. Many of the discussion points cover the concepts from one of my prior posts, COMMODITY COMEBACK.   Commodities markets have been major underdogs relative to record-breaking U.S. equities for much of the past six Read more […]

A Bang not a Whimper

Whenever this bull market ends, it is likely to be with a bang, not a whimper. The bull market began on March 9th, 2009, five years ago.  The last bull market lasted exactly five years from October 2002 to October 2007; the one before that – the great tech boom – lasted 10 years. This Read more […]

Some Inconvenient Truths

Today’s Wall Street Journal brought the latest in a string of articles suggesting that we have entered a period of particular opportunity for active investment management — a so-called “stock-picker’s market.”  Because the average correlation of stocks within the S&P 500 or other major indices has declined, it’s argued, “active managers are going to do Read more […]

How Smart Is Dr. Copper?

Copper is reputed to have earned a Ph.D. in economics because of its ability to predict turning points in the global economy.  This is since copper is so broadly used across industries from building construction, machinery, power generation and transmission, electronic product manufacturing and in transportation vehicles. As the demand for copper rises, its price likely Read more […]

The Price of Risk: Market Readies for $3billion Puerto Rico Junk Bond Sale

Puerto Rico general obligation bonds tracked in the S&P Municipal Bond Puerto Rico General Obligation Index have rallied 13.67% this year ahead of the planned $3 billion bond sale by Puerto Rico this coming Tuesday.  Yields of bonds in the index have dropped 122bps to end March 7th 2014 at 7.12%.  The success of the pending bond Read more […]