In my first “pullback buys” article, I went right after the thesis that we are going to have a catastrophe in housing and credit and gave you two stocks that are so misunderstood because of their industry affiliations that they are cheap enough to defend even amidst the terrifically broad selling we saw. Read the rest of this entry »

Yes, unfortunately, this article is going to be a continuation on the theme of “what does last week’s sell-off mean.” Also, Friday’s decline means that I owe readers another stock pick per my article on housing and credit plays. First though, some general economic commentary. Read the rest of this entry »

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This morning the market woke up to an announcement that Transocean (ticker: RIG) would buyout fellow drilling company GlobalSantaFe (GSF) in a deal that would create the world’s largest fleet of offshore drilling rigs. The combined company will be worth upwards of $50 billion, and will be able to offer a line of rigs that should be able to handle nearly any offshore location in the world. What does this deal imply about the state of energy? Read the rest of this entry »

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Looking at the two year chart on the QID (Ultra Short QQQ Powershares) one has to wonder who has been buying. The chart tells an interesting story of the pain that investors who have been short the markets have experienced over that time period. QID is leveraged, and designed to make a 2:1 move in the opposite direction of the QQQQ (the fund that holds all the stocks in the NASDAQ-100 index) which is accomplished through the use of derivatives and other financial tools. Given the past history that the broader markets trend up, buying into the QID would seem like an unwise decision… but is it? That is exactly what I wish to examine. Read the rest of this entry »

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I recently was reading Seeking Alpha when I stumbled upon on an article written by John Hussman. Hussman’s article, “Low Interest Rates Don’t Fuel Expensive Stocks,” piqued my interest because of all of the discussion and debate on Fed policy pertaining to interest rates have been generating of late. In the article, Hussman talks about the misconceptions that many investors have about the impact of interest rates on the return of the stock market. He takes on the view that low interest rates are always good and high interest rates are always bad. After reading this article one should have a pretty good understanding of how interest rates affect the stock market, but I feel that it is important to explain why the market reacts to interest rates in the way in which Hussman describes. Read the rest of this entry »