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Why Are We Such Suckers For Prediction?

Trading School (August 30th, 2009) Writes:

It doesn’t matter what news source is your “go to” they tons of insane, and often, wrong market analysis…so why do we still watch? In this article Charles Maley from ViewPointsofaCommodityTrader.com takes a stab at digging into our psyche…enjoy the article!

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I keep CNBC on all day while I work. Perhaps I think I will miss something, or maybe it’s the background noise that’s appealing. In any event, what I always find amazing is the parade of experts making one prediction after another. I think I would fall out of my chair if I heard one of them say “Well, to tell you the truth Mark, I have no idea”.

What’s most surprising is the arrogance in which these forecasts are made. The forecaster always seems convinced he is right. I think the world is far more complicated than we think, yet we always seem to place way

...

The Fate of This Rally May Rest in China’s Hands

Justice Litle (June 12th, 2009) Writes:

The fate of the global equity market rally now comes down to China. Will it continue to stockpile hard assets? Will the data points continue to soothe and impress? Much is at stake either way…  

If you grew up in the United States, you know that English literature is one of those subjects they foist upon you in 10th grade or so. I recall very little from English Lit 101. Most of the stories and poems we read (or pretended to read) have become a hazy blur.

But after all these years, one poem still stands out. Due to its oddness and simplicity, I have never forgotten it. The poem is “Red Wheelbarrow” by William Carlos Williams, and it goes like this:

so much depends

upon

a red wheel

barrow

glazed with rain

water

beside the white

chickens.

Make 130 Times Your Money With New $1 Government-regulated “Silver Shots!”

Imagine transferring $10,000 from your

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Wall Street’s New Bull Market: 7 Signs the Bear is Dead…

Louis Basenese (April 8th, 2009) Writes:

Believe it or not, but based on the classic Wall Street definitions, we’re in a new bull market. As of last Friday, all three major market indices recovered more than 20% from their March 9 lows.

Of course, we’ve been here before. Or as Yogi Berra liked to say, “It’s like déjà vu all over again.”

Recall, back in November of 2008 the markets began an impressive run-up, hitting the 20% milestone, too. Then all hell broke loose.

As a result, not every market observer, myself included, is completely convinced by the recent move. But I will say this - seven notable differences exist between then and now, leading me to believe this very well could be the start of a new bull market.

There’s hope for housing.

On Tuesday CNBC did a feature story on home sales in foreclosure central - California. In one suburb outside Stockton, where one out of every 67 homeowners

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Bank Stocks Up, Perhaps a Wee Bit Early – Analyst Blog

Zacks Market Commentaries (March 10th, 2009) Writes:
Headlines, to include Ben Bernake's statement and expectations for Thursday's U.S. House Financial Services Subcommittee on potentially revamping the mark-to-market accounting rules, today helped to stimulate a better than 30% inter-day movement in the shares of Citigroup (C), as well as positive price movement in other financial entities, including, but not limited to, Bank of America (BAC), JP Morgan (JPM), Comerica (CMA) and State Street (STT). We suspect financials could experience lift through this Thursday.

But to paraphrase Hans Solo and Yogi Berra --- While Citigroup's share price movement is “Great, let's not get cocky." The share price was basically at a penny stock level. This economic downturn is far from over, and unfortunately “it ain't over, 'til it's over.”

We suspect the trajectory of the economic downtrend has begun to shift from a parabolic downward angle, but the economy could be poised for

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New Bank Bailout Revives Some Policies That Triggered Crisis

Shah Gilani (February 12th, 2009) Writes:

TheTreasury Department’s new bailout plan would require participation from private investors and would include government guarantees to limit losses. The details remain explained, but skepticism and fears of another crash are running high. For more information, read the following article from Money Morning:

By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.

This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjà vu all over again.”

The only difference this time around is that the U.S. Treasury Department is calling the plays.

Backdrop on a bailout

In a press conference Tuesday, U.S. Treasury Secretary Timothy …

Tags for this Post:
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The New Banking Bailout Plan Reconstitutes Some of the Same Ingredients That Touched Off the Financial Crisis

Shah Gilani (February 12th, 2009) Writes:
By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place. This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjàvu all over again.” The only difference this time around is that the U.S. Treasury Department is calling the plays. Backdrop on a Bailout In a press conference Tuesday, U.S. Treasury Secretary Timothy F. Geithner unveiled the long-awaited successor to the Bush administration’s Troubled Assets Relief Program (TARP).  The reaction was swift. Stocks plunged after the 11 a.m. press conference began when Secretary Geithner introduced a new rescue plan that was light on ...
Tags for this Post:
aggregator bank;, Andrew Feldstein;, bad bank, bank balance sheets, bank of america corp, Bank of New York Mellon, bank rating agency, Banking, Barack Obama, BlackRock Financial Inc.;, Blue Mountain Capital Management LLC;, bush administration, Car Loans, central bank, Citadel Investment Group LLC, Co. LP, Congress, D.E. Shaw;, Federal Reserve System, Fifth Third Bancorp, finance buyouts;, Henry M. "Hank" Paulson Jr ., Hudson City Bancorp;, longer-term solution;, mark-to-market accounting, Market Commentary, New York Mellon Corp., Pacific Investment Management Co., Paulson, separate accounting category;, Shah Gilani, Standard;, TARP, Term Asset-Backed Securities Loan Facility;, Timothy F. Geithner, U.S. Treasury Department, United States, Us Federal Reserve, Us Treasury, USD, World Health Organization, Yogi Berra;

Income Investors: Dump GE Buy This Safer Income Investment Instead

Investment U (January 29th, 2009) Writes:

Income Investors: Dump GE & Buy This Safer Income Investment Instead

by Louis Basenese, Advisory Panelist, Investment U Senior Analyst, The Oxford Club

We’ve endured three consecutive weeks of losses for the S&P 500 (.INX). Never fun. But if you’re an income investor, ala Charles Dickens, the worst of times is creating the best of times…

Dividend yields now rest close to 15-year highs. Plus, the premiums from writing covered calls (the only safe options strategy) are significantly higher thanks to the extreme market volatility.

As far as I’m concerned, that’s an attractive one-two income-earning punch we shouldn’t ignore.

So how do we play it?

Not with the usual suspects…

Income Investors: GE Is A Dog at Any Price

There’s something about an adolescent stock price on General Electric (NYSE: GE) that turns most income investors rabid. Much like they were last summer for Bank of America

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Averaging for Dollars

QualityStocks (January 8th, 2009) Writes:
“It’s tough to make predictions, especially about the future.”

So said Yogi Berra, whose tendency toward malapropisms arguably made him more famous than his exploits on the baseball field, which earned him a spot in the Hall of Fame.

Nonetheless, he was right. It is tough to make predictions, and yet investors must find some way to anticipate future events if they are to be successful. Fortunately, there is a method for investing in mutual funds that can help stem the risks associated with portfolio decision making.

This method, called dollar-cost averaging, involves investing a fixed amount in an investment at regular intervals. Because mutual fund share prices fluctuate on a daily basis, this method ensures that an investor buys more shares when prices are low and fewer shares when prices rise. As you can see in the table, the result can be a lower average cost per share.

Dollar-cost averaging does not ensure

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