Of course there is a thousand different ratios, indicators and indexes that attempt to measure the value in today’s stock market. Today we are going to look at one of the most popular ratios in particular, Shiller’s PE10 ratio, also known as CAPE ratio. What information can we get from looking at 100+ years of history between stock returns, treasury yields and CAPE ratio readings? [click to continue…]
Regional bank stocks have been hit hardest by the flattening of the yield curve lately. As a result of traders fear that bank earnings may fall, the KBW Regional Bank Index has underperformed the S&P 500 by more than 18% so far this year.
At what seems like the worst possible time to invest in small banks, why look now?
Here’s were I think there is some value, and one bank in particular that is set up to weather the storm:
Big news this week as the U.S. yield curve has been flattening rapidly. Why should you care?
Here Bloomberg takes a look at the spread (or difference in interest rates) between 3 month treasury bills and 10 year treasury notes. Notice how inverted spreads (where short term treasuries yield more than long term treasuries) have often been a sign of an imminent recession:
A high dividend yield can be a sign of a strong, stable company and investment. However a large dividend yield may also be a signal of trouble and a hint that the company’s dividend may be unsustainable and cut in the near future.
Thankfully for investors, there are several quick checks you can do based on a company’s financial statements to see how sustainable that dividend really is. [click to continue…]
Finding a company with a competitive advantage means finding an investment that will offer solid returns for decades to come. What identifies a company with a strong competitive advantage? Some results may surprise you. [click to continue…]
The announcements today of charges against former Trump campaign chairman Paul Manafort have woken up markets this morning. The charges are not against anyone currently in the government, and no charges seem directly related to the investigation into Russia’s interference with U.S. elections or collusion with Russian officials. But, where there is smoke there is fire, and this announcement has a lot of people wondering what else remains to be discovered.
It is not an direct comparison, but let’s say this gets as bad as Watergate and cover ups exist all the way up the ladder at the White House, what can investors expect to happen? [click to continue…]
The week starts off with an ominous article in the Wall Street Journal. Margin debt, or loans investors have taken out with their investments as collateral has hit an all time high. Higher than just before the 2000 bursting of the tech bubble, higher than just before the 2007 financial crisis.
Investors have to interpret a lot of numbers, and make sense of a lot of forecasts in order to come to well educated investment decisions. But many of us went through the math class that taught us how to do this asking the teacher, “When are we ever going to use this?” and spacing out.
Jordan Ellenberg does an excellent job giving you a crash course in some basic math principles that have great benefits for investing.
Pioneer Natural Resources (Ticker: PXD) shocked oil investors when it released their second quarter earnings last week. Shares of the shale driller went from $163 a share to under $130,and other s hale oil names fell as much as 10%.
The company reported $233 million in net income, a 4% rise in production and lower operating costs. So why did Wall Street sell off the sector? They saw this graph:
What does it take to reach a retirement account of $1 million? Here we take a look at how much you would have to save each month, depending on your age, to reach the $1 million milestone. [click to continue…]
Emerging market stocks have had a rough decade. 3 year annual returns are flat and even long term 10 year annual returns are barely over 1.5%. But there is new life appearing in the emerging markets. This year the FTSE Emerging Market Index is up 18%, breaking a long term downtrend:
Are emerging markets turning the corner?
What’s the best way to invest in emerging markets? We take a look at a few options: