By SIMON CONSTABLE
NEW YORK ( TheStreet)-- It turns out that Federal Reserve employees really are smarter than the rest of us about finance, but a majority of them would still benefit from reviewing the textbooks periodically. And that's a lesson for everyone else.
The findings are from a new report by the National Bureau of Economic Researchtitled, " Employee Financial Literacy and Retirement Plan Behavior: A Case Study." The study, conducted in 2013, used five questions to test the knowledge of 3,357 Fed employees, approximately 16% of the total Federal Reserve System workforce.
On the first three questions, which were considered relatively basic, the Fed employees easily surpassed the achievement of the general population with a much higher proportion of correct answers for the same questions.
Read more here.
Monday, August 31, 2015
Friday, August 28, 2015
TheStreet: Twitter Can Help You Cash In on Corporate Earnings
By SIMON CONSTABLE
New York (TheStreet)-- If you want to make more money from trades linked to corporate earnings, then head for the Twitter-sphere. It could give you a better result than Wall Street's best, according to new research.
The findings come from a recent study by scholars at New York University, Arizona State University and the University of Toronto. The paper, titled "Can Twitter Help Predict Firm-Level Earnings and Stock Returns?" finds that the wisdom of the Twitter crowd can be a pathway to trading riches.
Read more here.
New York (TheStreet)-- If you want to make more money from trades linked to corporate earnings, then head for the Twitter-sphere. It could give you a better result than Wall Street's best, according to new research.
The findings come from a recent study by scholars at New York University, Arizona State University and the University of Toronto. The paper, titled "Can Twitter Help Predict Firm-Level Earnings and Stock Returns?" finds that the wisdom of the Twitter crowd can be a pathway to trading riches.
Read more here.
Thursday, August 27, 2015
Forbes: Was Monday's Market Plunge A Mega-Capitulation? Nah!
By SIMON CONSTABLE
Important question for anyone with money in the markets: Did we see a capitulation Monday? If we did, it wasn’t a mega capitulation of the types which mark major turning points.
Yes, Monday on the Dow Jones Industrial Average plunged more than 1,000 points at the open and indeed it does seem to have been at least a temporary turning point. As I write, stocks are continuing to rally. But I don’t think it was a capitulation.
TheStreet: Hate Wild Gyrations in the Stock Market? Blame Technical Trading
By SIMON CONSTABLE
New York ( TheStreet) -- Volatility is back in the stock market in a big way, and it isn't going anywhere quickly.
Why? A big part of the story is so-called technical trading by computers and analysts who care little for the economic or business fundamentals of the companies that are bought and sold. Instead, many decisions to buy or sell securities are being driven by changes in stock prices using what can seem like arbitrary "rules."
"This phenomenon is here to stay," says Milton Ezrati, senior economist and market strategist at Lord Abbett. "The problem is that it is automatic and it involves massive amounts of securities."
Read more here.
New York ( TheStreet) -- Volatility is back in the stock market in a big way, and it isn't going anywhere quickly.
Why? A big part of the story is so-called technical trading by computers and analysts who care little for the economic or business fundamentals of the companies that are bought and sold. Instead, many decisions to buy or sell securities are being driven by changes in stock prices using what can seem like arbitrary "rules."
"This phenomenon is here to stay," says Milton Ezrati, senior economist and market strategist at Lord Abbett. "The problem is that it is automatic and it involves massive amounts of securities."
Read more here.
Tuesday, August 25, 2015
OZY: Why You Shouldn't Melt Down With The Markets
By SIMON CONSTABLE
We understand. You’re freaking out. If only a little.
Sure, the Dow managed to plunge — and we mean plunge, more than 1,000 points yesterday morning — before recovering some. The end result over the past few market days is pretty awful. It’s now at its lowest close since February 2014.
But the real question, and we’re not just trying to make you feel better, is not where the market is heading, but where the economy is heading. And here, it’s not so bad.
Read more here.
We understand. You’re freaking out. If only a little.
Sure, the Dow managed to plunge — and we mean plunge, more than 1,000 points yesterday morning — before recovering some. The end result over the past few market days is pretty awful. It’s now at its lowest close since February 2014.
But the real question, and we’re not just trying to make you feel better, is not where the market is heading, but where the economy is heading. And here, it’s not so bad.
Read more here.
Monday, August 24, 2015
Forbes: 10 Key Takeaways From The Market Meltdown
By SIMON CONSTABLE
I’m getting a lot of questions about the stock market sell off. Here are ten takeaways.
1. Stocks don’t go up forever. That’s always been true. This time is no different.
2. Stocks don’t go down forever. You may recall that in the dark moments of early 2009 it looked like stocks were finished, like forever. Eventually they recovered. They will again.
Read more here.
Sunday, August 23, 2015
Forbes: Business Lessons From Bukowski
By SIMON CONSTABLE
A new book of Charles Bukowski’s writing just came out in late July, and I’m lucky enough to have read it. It has some useful lessons for students of business as well as budding writers.
On Writing, is a collection of letters, or fragment’s thereof, he wrote throughout his long career. Many of them have never before been published. In case it’s slipping your mind, among many other things, Bukowski wrote Ham on Rye, a working class answer to Salinger’s Catcher in the Rye.
The letters are superb. What interests me for this column is what you can learn if you are in business.
Read more here.
Friday, August 21, 2015
TheStreet: With S&P 500 in a 'Blue Period,' Investing in Art May Give You a Mona Lisa Smile
By SIMON CONSTABLE
NEW YORK (TheStreet)-- Price gains for works of fine art have ground to a near-halt. What's worse, even those small gains are increasingly driven by fewer and fewer mega-priced trophy pieces. It could mean continued bad news for auction houses like Sotheby's (BID) , but it's a boon to investors wanting a good buy outside of the stock market.
Average price gains for fine art sold at auction are close to zero this year, according to new data from the Mei Moses World All Art index, which tracks the prices of such works. On the chart below, the rolling three-year average of price movements for 2015 is barely even visible, just a touch over zero, assuming prices for the remainder of 2015 remain static. It's a world away from the double-digit gains seen year after year in the run-up to the financial crisis of 2008. Read more here.
NEW YORK (TheStreet)-- Price gains for works of fine art have ground to a near-halt. What's worse, even those small gains are increasingly driven by fewer and fewer mega-priced trophy pieces. It could mean continued bad news for auction houses like Sotheby's (BID) , but it's a boon to investors wanting a good buy outside of the stock market.
Average price gains for fine art sold at auction are close to zero this year, according to new data from the Mei Moses World All Art index, which tracks the prices of such works. On the chart below, the rolling three-year average of price movements for 2015 is barely even visible, just a touch over zero, assuming prices for the remainder of 2015 remain static. It's a world away from the double-digit gains seen year after year in the run-up to the financial crisis of 2008. Read more here.
Thursday, August 20, 2015
TheStreet: Six Reasons to Discount Dire Warnings on the Stock Market
By SIMON CONSTABLE
NEW YORK (TheStreet)-- All summer long, it seems we've been warned that stocks are just moments away from falling off a precipice and into oblivion. But I'm still skeptical. Why? There is rarely an announcement at a market top.
Here are some other reasons to be broadly bullish on stocks like those in the S&P 500 and the SPDR S&P 500 (SPY) exchange-traded fund that tracks that index.
Read more here.
NEW YORK (TheStreet)-- All summer long, it seems we've been warned that stocks are just moments away from falling off a precipice and into oblivion. But I'm still skeptical. Why? There is rarely an announcement at a market top.
Here are some other reasons to be broadly bullish on stocks like those in the S&P 500 and the SPDR S&P 500 (SPY) exchange-traded fund that tracks that index.
Read more here.
Wednesday, August 19, 2015
TheStreet: Surprise! The Job Market Is Actually Better Than You Think
By SIMON CONSTABLE
NEW YORK (TheStreet) -- Looking at the monthly government jobs data can leave you with a lot of guesswork and a nagging doubt that the new positions might all have been minimum wage. On top of that, there's the worry that the first set of figures will be dramatically reduced later. It can give you that sinking feeling similar to playing a distressing game of "Snakes and Ladders," when you slide all the way back down the board.
But there is another, little-used data point you can add to the equation that removes some of the uncertainty, and gives a more comprehensive view: Treasury tax withholding receipts.
Read more here.
NEW YORK (TheStreet) -- Looking at the monthly government jobs data can leave you with a lot of guesswork and a nagging doubt that the new positions might all have been minimum wage. On top of that, there's the worry that the first set of figures will be dramatically reduced later. It can give you that sinking feeling similar to playing a distressing game of "Snakes and Ladders," when you slide all the way back down the board.
But there is another, little-used data point you can add to the equation that removes some of the uncertainty, and gives a more comprehensive view: Treasury tax withholding receipts.
Read more here.
Tuesday, August 18, 2015
TheStreet: Time To Buy Emerging Market Debt?
By SIMON CONSTABLE
NEW YORK (TheStreet) -- Emerging markets bonds have been on the skids, which is just one of the reasons you should consider adding some to your portfolio. Benefits of doing so include better yield and more diversification.
Overseas investors have become increasingly concerned by a slowing China, falling commodity prices and stagnant Europe. As a result, emerging market bonds have sold off. For instance, the iShares J.P. Morgan USD Emerging Markets Bond (EMB) exchange-traded fund, which tracks a basket of emerging market debt from countries such as Argentina, Poland, Uruguay and Peru, has dropped around 3% over the past three months. Read more here.
OZY: A Game Chicken Chicken... With Oil
By SIMON CONSTABLE
In the world of oil, a little noticed but fascinating game of chicken has broken out. And the unblinking eyeballs happen to involve a guy named Putin and a prince who enjoys fast cars, all 200 of them that he supposedly owns.
Does any of this ring a bell? As some of you may have surmised, the two biggest so-called petro giants, Russia and Saudi Arabia, are locked in a battle to maintain control over the global dominance of oil that’s slowly slipping away as other forms of energy like natural gas begin to grow in importance. Read more here.
Friday, August 14, 2015
Forbes: "Must-Follow" Twitter Feeds On Markets And Economics
By SIMON CONSTABLE
There is a lot of junk on twitter to parse through when it comes to markets and the economy. Don’t worry, I’ve got your back. In no particular order, here are some “must-follow” accounts that are great.
@ArthurHoganIII — Art Hogan, long time market strategist. If survival on Wall Street means gaining respect then he’s earned it.
Read more here.
There is a lot of junk on twitter to parse through when it comes to markets and the economy. Don’t worry, I’ve got your back. In no particular order, here are some “must-follow” accounts that are great.
@DougKass – Doug Kass, professional investor. Writes for Real Money, the subscription side of TheStreet. Has his finger on the investing pulse.
@ArthurHoganIII — Art Hogan, long time market strategist. If survival on Wall Street means gaining respect then he’s earned it.
Read more here.
Thursday, August 13, 2015
OZY: King Dollar Is Back, Which Means...
By SIMON CONSTABLE
Ah, it’s a delicious feeling. You’re sitting down in a café in Provence and you can finally supersize that croissant and café au lait because your dollar is no longer a joke. In fact, King Dollar, as we like to call it, is on a roll (see what we did there?), up 33 percent in four years against a basket of currencies.
But anyone with a passport can take advantage of a strong dollar on the little stuff. It’s the bold, the brave, the people and firms big and small that play world currencies that are furiously trying to get a real edge — especially now that all signs point to an ever stronger U.S. greenback.
Read more here.
Wednesday, August 12, 2015
TheStreet: Why China's Yuan Devaluations Won't Help Its Economy
By SIMON CONSTABLE
NEW YORK (TheStreet) -- China's abrupt currency devaluations this week won't save its economy. If the move sparks a bounce in stocks, then investors who have been burned by the tumbling Shanghai market, down 20% since the beginning of June, should use the opportunity to sell into rising prices. Or failing that, just dump Chinese stocks.
The reasons for weakening the Renminbi yuan by is clear: To make China's exports cheaper in terms of foreign money, most notably U.S. dollars. The problem is that while it may boost exports, there are other consequences that will do more harm than good. Read more here.
Tuesday, August 11, 2015
TheStreet: Ten Reasons to Love the Strong Dollar
NEW YORK (TheStreet) -- The surge in the greenback has some stock investors screaming foul, but they shouldn't be. Instead, they should embrace the strength.
It is true that the trade-weighted value of the U.S. dollar has climbed more than 21% in the last 13 months, according to recent data from the St. Louis Federal Reserve. It's also true that the rally is taking its toll on the earnings reports of some multinational companies -- their foreign revenues take a hit when translated back into dollars.
Still, there is plenty to feel great about. Here are 10 reasons to smile.
Monday, August 10, 2015
Forbes: Colorblind Secrets Your Colleagues Won't Tell You
By SIMON CONSTABLE
It never ceases to amaze me how unaware many colleagues are about a very common affliction: colorblindness. I have it. So does Facebook’s Mark Zuckerberg, according to a report in the New Yorker and others.
Here’s what you need to know.
We can see colors. Total inability to see color is very rare. What we do see isn’t the same as what you see. For instance, the color red is less vibrant for me. But, there are some things I’ll be able to see better than you, like certain camouflage patterns. Seeing the world in a different way can be an advantage.
Your color presentation is incomprehensible. This is especially so when it is full of charts with seven shades of pastel colored lines. All the lines are indistinguishable. My bank does similar with a pie chart of my investments: brown, green, red, beige, and black. It’s so confusing to look at that it’s meaningless. The consultant recommendations on what colors are best for presentations are probably wrong. Go with grayscale instead, unless you want to confuse us.
Forbes: What Trump Brings To The Table
By SIMON CONSTABLE
If you really want change then you need to do something different. That’s more or less what Einstein said and it applies as much to Washington politics as it does to science.
Americans seem to want change from their politicians. But then when someone turns up with the capabilities to do so many people throw up their arms in horror. I write of course about presidential candidate and billionaire real estate mogul Donald Trump who is doing a superb job of shaking up the establishment.
Here are some reasons to embrace him, or if not him then someone with some of his positive qualities.
Yes, he is brash and slightly crass at times. But he is a New Yorker. I live here. That’s how New Yorkers are and they usually aren’t bad people. Did anyone really think that the voice of much needed change in Washington would arrive in the guise of handsome European Prince with manners fit to dine at Buckingham Palace? Of course not.
Read more here.
Sunday, August 9, 2015
WSJ: The Downside of ETFs
By SIMON CONSTABLE
There is a lot for investors to like about exchange-traded funds, but there is also a downside for the stock market, a new study says.
Many investors like ETFs because the funds are an easy way to build a diverse portfolio with fees that generally are lower than those of mutual funds.
Now a group of academics offers a different take. A working paper titled “Is There a Dark Side to Exchange Traded Funds (ETFs)? An Information Perspective,” by professors at the Arison School of Business in Israel, Stanford University and the University of California, Los Angeles, says the popularity of ETFs has led to higher trading costs for some stocks, as well as less coverage of stocks by analysts to help investors make decisions. It also has reduced the responsiveness of some stock prices to information about the companies behind them and made it harder for investors to diversify their holdings in a way that reduces their risk, the report says.
Read more here.
There is a lot for investors to like about exchange-traded funds, but there is also a downside for the stock market, a new study says.
Many investors like ETFs because the funds are an easy way to build a diverse portfolio with fees that generally are lower than those of mutual funds.
Now a group of academics offers a different take. A working paper titled “Is There a Dark Side to Exchange Traded Funds (ETFs)? An Information Perspective,” by professors at the Arison School of Business in Israel, Stanford University and the University of California, Los Angeles, says the popularity of ETFs has led to higher trading costs for some stocks, as well as less coverage of stocks by analysts to help investors make decisions. It also has reduced the responsiveness of some stock prices to information about the companies behind them and made it harder for investors to diversify their holdings in a way that reduces their risk, the report says.
Read more here.
WSJ: What Is the Value Trap?
By SIMON CONSTABLE
What does it mean when investors talk about the “value trap”?
Broadly speaking, not all cheap stocks are a good value. If, like many value investors, you buy a stock that has a better-than-average dividend and is less expensive than other similar securities, then it could be a good deal. But there is also a chance that it isn’t.
Put another way: Some things are cheap for a reason.
Sometimes a stock’s price falls because sophisticated investors see a longer-term problem with the company and decide to dump their positions, explains Sam Stovall, managing director of U.S. equity strategy at S&P Capital IQ. It could be, for example, that those savvy investors believe the company is in bad shape and will cut its dividend in due course.
Read more here.
Saturday, August 8, 2015
OZY: Falling Gold Prices Are The Latest Signs Of Good News
By SIMON CONSTABLE
Be afraid. Be very afraid. Or maybe not so much now.
When people see headlines about a market crash or some government turmoil, they tend to look for something secure, which in some cases includes stocking up on gold the way you might water bottles in a drought. (Yes, people still stick coins in their mattress and bury bars in their backyard.) And yet, with every reason to be afraid about the future of the so-called global economy staring us in the face, that doesn’t seem to be happening these days.
Read more here.
Monday, August 3, 2015
Forbes: How The Calais Crisis Sends A Message
By SIMON CONSTABLE
The so-called Calais Crisis is sending a message to the world that Britain is the place migrants want to be. Well, at least it is when compared to the other rich countries of the European Union. It’s an indicator of something, possibly an economic one. Read more here.
The so-called Calais Crisis is sending a message to the world that Britain is the place migrants want to be. Well, at least it is when compared to the other rich countries of the European Union. It’s an indicator of something, possibly an economic one. Read more here.
Photo by Jeremy Bezanger on Unsplash
Saturday, August 1, 2015
OZY: Why China Might Be in for a Different Kind of Crash
By SIMON CONSTABLE
We’ve all seen the blur of headlines: China’s stock market falls. Really falls — like it was the great Wall Street crash of 1929 all over again, only over there. And then the Chinese government puts the brakes on its financial system for a while and things feel better. Then the fretting continues this week over yet another epic fall. But there is one news flash, one alert in our smartphone that we’re not getting about any of this.
Read more here.
We’ve all seen the blur of headlines: China’s stock market falls. Really falls — like it was the great Wall Street crash of 1929 all over again, only over there. And then the Chinese government puts the brakes on its financial system for a while and things feel better. Then the fretting continues this week over yet another epic fall. But there is one news flash, one alert in our smartphone that we’re not getting about any of this.
Read more here.
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