WSJ: What's the Difference Consumer Staples and Durables

By SIMON CONSTABLE

Stock strategists often talk about two groups of companies that sell goods to individuals: makers of "consumer staples" and makers of "consumer durables."

They sound similar but are in fact completely different in ways that matter to investors.
Consumer staples are the goods you buy for immediate, everyday use—like shampoo, toothpaste and soap. See original post here.

Photo by Joshua Hoehne on Unsplash

WSJ: Auction-Rate Securities Alive & Well

By SIMON CONSTABLE

Is it déjà vu all over again in the debt market?  You’d be forgiven for thinking so, especially if you remember the auction-rate securities debacle from 2008.

Those securities were and are used by some tax-exempt organizations as a form of inexpensive financing. They price using a Dutch auction at periodic (usually short) intervals.  Read more here.

Photo by Joshua Mayo on Unsplash

Barrons: Energy Boom Powers Up Shipping

By SIMON CONSTABLE

The North American energy boom should help power up an industry that's been stuck in the doldrums: marine transportation.

Shipping, the ugly stepsister of commodities, has been unappealing over the past few years. A massive shipbuilding boom created overcapacity, sending shipping fees into free fall. The Baltic Dry Index, a key benchmark for waterborne transportation fees, peaked at 11,793 in May 2008 before plunging to 663 in December that year, according to FactSet. By Friday it crept back to 933. See original story here.

WSJ: When Preferred Securities Make Sense

By SIMON CONSTABLE

Investors seeking income might want to take a peek at preferred-stock funds.

What is preferred stock? It is a hybrid security that is a cross between equity and debt. Like debt, it pays a fixed amount of interest, and holders get paid before any common-stock dividends are distributed. But like equity, it tends to have larger price swings to both the upside and the downside.Buyers may reap handsome yields of around 6% with advantageous tax treatment on distributions. Still, you need to understand the nuances of preferred stock to get the most from it.  See original story here.

WSJ: How a New Pope Gets Picked

Cardinal Egan explains to me how the new pope will be chosen...

WSJ: What Your Need to Know About Price Earnings Ratios

By SIMON CONSTABLE

The price of a stock doesn't tell you anything about whether it's a good deal, but the so-called price/earnings ratio can help. The trick is figuring out which P/E ratio to use.

Obviously, just because one stock is $200 a share and another $12 doesn't mean the latter is cheaper in terms of what you're getting. For a better gauge, you need to calculate what you are paying for each dollar of company earnings. Hence, the P/E ratio, derived by dividing the price of the stock by one year of per-share earnings. So if one stock has a P/E of 12 and the other of 10, the latter is cheaper. Read original story here.

By SIMON CONSTABLE



Friday we got news that jobs remain scarce in the U.S. Unemployment is still hovering around 8 percent but that doesn’t really give any sense of just how bad things are for the vast majority of Americans. Thursday last week I heard a presentation by Professor Matthew Slaughter of Dartmouth’s Tuck school of business. It was sobering to say the least. First he pointed out: it will take until 2020 for the economy to get back the number of jobs we had at the beginning of the great recession. It gets worse. Even if you have a job, your earnings are being eroded. Median pay adjusted for inflation has fallen since 1989. It should be a reminder to anyone who thinks we’re on the road to recovery that it will be a long road.