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Chasing Value: 2010 -- #3 EZCORP

Sheldon Liber — Tue, 29 Dec 2009 18:00:00 EST

Filed under: Competitive Strategy, Starbucks (SBUX), Home Depot (HD), Next Big Thing, McDonald's (MCD), Bargain Stocks, Chasing Value[TM], Stocks to Buy, EZCORP (EZPW)

One of the easiest stock picks for me to make this year is also one I made last year and for many of the same reasons. In a time of economic turmoil, high unemployment and tight liquidity, what could be more practical than pawn shops and cash advance outlets? EZCORP (EZPW) made me money last year and I expect more of the same as it continues to expand.

Most investors wish they could have gotten in on the ground floor of the hugely successful The Home Depot Corporation (HD), McDonald's Corporation (MCD), or Starbucks Corporation (SBUX) franchises while they only had a few hundred outlets. In the case of EZCORP that is still possible.

Continue reading Chasing Value: 2010 -- #3 EZCORP

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Eight ways to define the recession

Tom Johansmeyer — Mon, 12 Oct 2009 14:50:00 EST

Filed under: Employees, Economic Data, Recession, Financial Crisis

We've watched stock market numbers bounce around for two years. Unemployment stats have served as unpleasant reminders that, for some, leading indicators haven't translated to reality. We look for so many ways to understand the brutal economic environment with which we've had to contend, and all the choices can make your head spin. So, let's make it simple. Here are eight ways to tack a label onto the financial world in which we live.

1. Lost market value
Total stock market losses from October 2007's top to March 2009's bottom: $11.2 trillion
Total gains in the stock market since the bottom: $4.6 trillion
Lost ground: $6.6 trillion

2. Bad days
Percentage of the 10 worst days in history for the Dow Jones Industrial Average that happened in 2008, by point drops: 60%
Percentage of the 10 worst days in history for the DJIA that happened in 2008, by percentage drops: 30%

3. Mutual funds
Value of mutual fund assets at the end of 2007: $6.5 trillion
... and a year later: $3.7 million
Lost value: $2.8 trillion

But, it got a little better at the end of August 2009: $4.5 trillion (value of assets)

Continue reading Eight ways to define the recession

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Market ends the day lower, but up for the month

Michael Fowlkes — Wed, 30 Sep 2009 18:20:00 EST

Filed under: Major Movement, Forecasts, Good news, Market Matters, Money and Finance Today, S and P 500, DJIA, Housing, Recession

The market was able to stage a late day rally which erased some of its earlier losses, but still ended the day in the red, with all 3 major indexes closing down on the day.

September is typically not a good month for the market, but even with today's losses this September was positive, as more and more investors have started to believe the economy is coming out of its recession.

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Market ends the day lower, but up for the month originally appeared on BloggingStocks on Wed, 30 Sep 2009 18:20:00 EST. Please see our terms for use of feeds.

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Mobius says stocks will drop by a third

Tom Johansmeyer — Mon, 10 Aug 2009 09:20:00 EST

Filed under: China, Recession

Mark Mobius, executive chairman of Templeton Asset Management Ltd., believes that the global stock market will fall by up to 30%. The strong rebound following last year's calamity is likely to be impeded by profit-taking on the upswing. Basically, an increase of 70%, he says, will lead to a decrease of 20 to 30%.

The greatest risk in a recovering stock market comes from the increase in new stock and bond issuances, Mobius says. To participate in these new deals, investors would have to liquidate existing positions, which can put downward pressure on the market as a whole. Money doesn't come from nowhere, and new capital will come on the backs of the previous investments.

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Mobius says stocks will drop by a third originally appeared on BloggingStocks on Mon, 10 Aug 2009 09:20:00 EST. Please see our terms for use of feeds.

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Oil, the stock market and economic inconsistency

Sheldon Liber — Mon, 06 Jul 2009 15:20:00 EST

Filed under: Major Movement, International Markets, Rants and Raves, Market Matters, Oil

There is too much noise on Wall Street, and it becomes clearer with each passing day why some of the best money managers and investors in the world choose to do their business from somewhere else.

The most famous of all being 'my pal' Warren Buffett who has operated his business from the amazing "financial Mecca" of Omaha, Nebraska.

Today I wake up to the news that the market is down because oil is down because the world economy may not be healing as fast as many had hoped.

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Quick Take: Why is the market down today?

Sheldon Liber — Wed, 13 May 2009 17:00:00 EST

Filed under: Other Issues, Rumors, Rants and Raves, Market Matters, Money and Finance Today, S and P 500, Recession, NASDAQ, Financial Crisis

The market is down again today and there are millions of people trying to figure out why. Some will tell you they know why and give you a plausible rationale. There may be bits of truth here and there but there is also an arbitrary nature too. If not arbitrary, then haphazard.

The market may be down because nobody in Washington - Obama, Benanke or Geitner - made a speech today pounding the drum for a brighter economic outlook.

It could be because oil prices have been slowly rising again as inventories are drawn down.

Continue reading Quick Take: Why is the market down today?

Quick Take: Why is the market down today? originally appeared on BloggingStocks on Wed, 13 May 2009 17:00:00 EST. Please see our terms for use of feeds.

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Bear rally or not, investors seem shock-resistant

Sheldon Liber — Fri, 08 May 2009 14:20:00 EST

Filed under: Good news, Rumors, Rants and Raves, General Motors (GM), Scandals, Citigroup Inc. (C), Money and Finance Today, Amer Intl Group (AIG), Comfort Zone Investing, DJIA, Recession

The market has been leaving the doubters behind for the last nine weeks. If there is no pullback based on the bear market theories (that do make some sense), then all those folks who thought this push upward was phony are going to be sorry -- and poorer!

Bad news, modest earnings and even losses have not brought down the overall market. Low expectations for growth going forward, and the bankruptcies of major U.S. corporations only cause a short pause. Corporate scandals, shamed corporate executives and excesses have not shaken the market. Even multi-billion dollar con artists might make the headlines but they do not rattle anyone's nerves any more unless of course they had placed money in their slimy hands.

Over the course of the last year we have witnessed the dramatic collapse of the largest commercial bank in the world, Citigroup (NYSE: C), the largest thrift in the world; Washington Mutual; the largest insurance company in the world; American International Group (NYSE: AIG) and the largest automobile company in the world, General Motors (NYSE: GM) -- all U.S. based.

Continue reading Bear rally or not, investors seem shock-resistant

Bear rally or not, investors seem shock-resistant originally appeared on BloggingStocks on Fri, 08 May 2009 14:20:00 EST. Please see our terms for use of feeds.

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Alien sightings, government cover-ups, and investment risk

Sheldon Liber — Tue, 21 Apr 2009 17:30:00 EST

Filed under: Other Issues, Rumors, Press Releases, Rants and Raves, Scandals, Media World, Headline News

Let's talk about investment risk and alien sightings. How do you assess risk? What is your exposure? What are the odds? What kind of fact checking do you do? What return is appropriate for what level risk? What is your time frame? Do you ask yourself the hard questions?

An ex-astronaut claims that the aliens have landed on earth. According to CNN: former NASA astronaut Edgar Mitchell and other UFO enthusiasts are concerned, the real story is happening elsewhere. Mitchell, who was part of the 1971 Apollo 14 moon mission, asserted Monday that extraterrestrial life exists, and that the truth is being concealed by the United States and other governments.

All of this alien talk is baloney. The "government" could not keep a secret if the entire universe were at risk. The odds that multiple governments could keep a common secret and that not one person would provide the slightest conclusive evidence are microscopic.

Continue reading Alien sightings, government cover-ups, and investment risk

Alien sightings, government cover-ups, and investment risk originally appeared on BloggingStocks on Tue, 21 Apr 2009 17:30:00 EST. Please see our terms for use of feeds.

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Before the Bell: When will the party end?

Jonathan Berr — Mon, 06 Apr 2009 07:42:00 EST

Filed under: Before the Bell, Market Matters, International Business Machines (IBM), Sun Microsystems (JAVA)

For the past few weeks, investors have "partied like its 1999" as in the heady days of the tech bubble and not the song by Prince.

They have taken a "What me worry?" attitude that would make Alfred E. Neuman, the fictional mascot of "Mad" magazine proud, sending the major indexes soaring after data showed some small signs of improvement, even though the economy lost 663,000 jobs in March.

Continue reading Before the Bell: When will the party end?

Before the Bell: When will the party end? originally appeared on BloggingStocks on Mon, 06 Apr 2009 07:42:00 EST. Please see our terms for use of feeds.

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Nostradamus was a punk! Have we reached bottom?

Sheldon Liber — Mon, 09 Mar 2009 14:10:00 EST

Filed under: Forecasts, Good news, Rants and Raves, Apple Inc (AAPL), Cisco Systems (CSCO), General Electric (GE), Stocks to Buy, Intuitive Surgical Inc (ISRG), Recession, American Eagle Outfitters (AEO)

If there is anything that makes me think we could be close to a market bottom, it is all the people that have gone off the deep end thinking the world may be coming to an end.

For the time being highly leveraged debt obligations seem to have come to an end. Large independent investment banks may have come to an end for now. The idea of a balanced budget may have come to an end a long time ago. However, the world is not coming to an end.

If anybody out there thinks that the times we live in come close to the Dark Ages, the American Revolution, the Civil War, World Wars I or II, or the Great Depression, then they are wimps who know nothing about history or true misery.

Continue reading Nostradamus was a punk! Have we reached bottom?

Nostradamus was a punk! Have we reached bottom? originally appeared on BloggingStocks on Mon, 09 Mar 2009 14:10:00 EST. Please see our terms for use of feeds.

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Why you should ignore analysts

Peter Cohan — Mon, 09 Feb 2009 10:00:00 EST

Filed under: Economic Data, Federal Reserve, Financial Crisis

Remember Wall Street analysts? Those are the people who go on tout TV and tell you to buy stocks regardless of what is happening to stock prices. The reason you should ignore them is that they get paid to make you buy stocks which generates commissions for their employer. If they issue 'sell' recommendations, they will scare people away from the market. And then there won't be any commissions to pay them.

This comes to mind courtesy of some fresh statistics on analysts' rate of issuing buy recommendations as stocks have plummeted in the last year. When stocks hit their peak in 2007, analysts put buy or hold calls on stocks 95% of the time. And last month, history's worst January, analysts urged you to sell a mere 5.9% of stocks. In 2008, as the market lost almost 40%, sells never outweighed buys or holds.

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Why you should ignore analysts originally appeared on BloggingStocks on Mon, 09 Feb 2009 10:00:00 EST. Please see our terms for use of feeds.

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Market's message: January plunge says avoid stocks in 2009

Peter Cohan — Mon, 02 Feb 2009 10:10:00 EST

Filed under: Other Issues, S and P 500, Recession

If you still hold stocks, should you use the recent plunge to buy? Should you hold? or Should you just get out of stocks altogether? The answer depends on how soon you need your money and your outlook for stock prices. The first question is easier to answer than the second one -- which is virtually impossible to get right. As I posted last October, if you need your money in the next six years, it probably makes sense to sell.

How bad was January 2009? After falling 38.5% in 2009, the S&P 500 lost another 8.6% of its value last month. And the January barometer effect -- the idea that as goes January, so goes the year -- has a pretty good track record. In 60 of the last 80 years, the S&P 500's performance in January has reflected the index's annual result. For example, in January 2008, the S&P 500 fell 6%. And this January was the worst ever for the market. So maybe 2009 will be even worse than 2008.

Continue reading Market's message: January plunge says avoid stocks in 2009

Market's message: January plunge says avoid stocks in 2009 originally appeared on BloggingStocks on Mon, 02 Feb 2009 10:10:00 EST. Please see our terms for use of feeds.

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What's your share of the $4 trillion bailout?

Zac Bissonnette — Tue, 27 Jan 2009 09:15:00 EST

Filed under: Scandals, Recession

Remember when we were up in arms over the $700 billion taxpayer-funded bailout of the banking industry?

Those were the days. With the government now mulling the establishment of an "aggregator bank" to buy all the bad assets of all the banks, former International Monetary Fund chief economist Simon Johnson says that the cost of the bailout could be $4 trillion by the time this is done.

Four trillion dollars is a lot of lettuce. To help put it in perspective consider this. As of July of 2008, the CIA estimated the US population at 303,824,640. If the total cost of the bailout comes to $4 trillion, that will work out to a bill of $13,165.49 for every man, woman, child and incarcerated felon in America.

What does it all mean? I'm not really sure. But given that you (more precisely, your great-great-great-great grandchildren) are cutting a check for more than $13,000 to the financial industry, don't you think that we are perhaps entitled to a higher level of customer service? Could they upgrade the quality of the lollipops, perhaps?

What's your share of the $4 trillion bailout? originally appeared on BloggingStocks on Tue, 27 Jan 2009 09:15:00 EST. Please see our terms for use of feeds.

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Buffett's economic "Pearl Harbor" comment

Douglas McIntyre — Mon, 19 Jan 2009 10:45:00 EST

Filed under: Forecasts, Economic Data, Financial Crisis

According to the AP, billionaire investor Warren Buffett told NBC that the U.S. is engaged in an "economic Pearl Harbor.".

Buffett also said that it never paid to bet against the against America. So, what did he mean?

Probably that Pearl Harbor was a catastrophe. But, it ushered in a period of four years of war. The US prevailed, but the cost was tremendous and there were no easy fixes. Pain and sacrifice were the currency for bringing the country back to a semblance of what it had been before the conflict began.

Buffett has made the comment before that the deleveraging of the broad credit markets would be a lengthy process and that part of the economy might struggle to survive in the process. He says he never believed that derivatives were safe and that banks that relied on them for earnings would eventually be faced with the balance sheet fiasco that has visited US financial firms over the last years.

Buffett had his own bad year in 2008. The return on his investments was not what his shareholders and the public have been accustomed to expecting. His comments about Pearl Harbor may also be a signal that he thinks even his own brilliance will be undercut. The breaking apart of the credit system may just be that bad.

Douglas A. McIntyre is an editor at 247wallst.com.

Buffett's economic "Pearl Harbor" comment originally appeared on BloggingStocks on Mon, 19 Jan 2009 10:45:00 EST. Please see our terms for use of feeds.

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Keeping US markets open every day

Douglas McIntyre — Mon, 19 Jan 2009 09:15:00 EST

Filed under: Major Movement, International Markets, New York Times'A' (NYT), Financial Crisis

During a financial crisis, the US markets should be open everyday. That includes Christmas and the Fourth of July. It includes Thanksgiving and Martin Luther King Day.

The reason is that US investors and the US banking system lose a day in their ability to react to news like the big UK banking and financial system bailout. While markets in Asia and Europe trade and make efficient work of creating or destroying the value of shares in companies which are effected by the news, the measurement of the worth of American shares is frozen. Investors have to pass up an ability to trade. Because of that a British bank's shares can be revalued in the stock market. A US bank's cannot.

If the US is going to present itself as the center of the global capital markets, it cannot afford to have "days off" The big news from the UK proves the case. According to several news reports, Carlos Slim will lend money to The New York Times Company (NYSE:NYT). The news is to a large extent useless beyond the fate of the company itself.

The US markets should be open every day. Otherwise capital use is inefficient.

Douglas A. McIntyre is an editor at 247wallst.com.

Keeping US markets open every day originally appeared on BloggingStocks on Mon, 19 Jan 2009 09:15:00 EST. Please see our terms for use of feeds.

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Bernard Madoff may have never even actually traded any securities

Jonathan Berr — Fri, 16 Jan 2009 17:40:00 EST

Filed under: Scandals, DJIA, Recession

Money manager Bernard Madoff had a trading strategy that was so awesomely complex that no one understood it. Well, it turns out that was a lie too.

Media reports say that the alleged mastermind of a $50 billion Ponzii scheme may have never traded any securities at all. The Financial Industry Regulatory Authority has no evidence of Madoff's investment fund executing trades through his brokerage operation, the Associated Press said. Fidelity Investments, listed among many trades included in statements sent to customers, says Madoff is not a client, the AP said.

There are many lessons to be learned from the Madoff scandal.

First, don't invest in something you do not understand.

Many Madoff customers were either afraid or unwilling to ask what was going on with their accounts. The Boston Globe, which broke this story, said the firm's "statements were often so complicated that investors had to call representatives of the firm for explanations."

People can understand if a money manager loses money by making some bad bets on the market. They may not like it much but they know that investments will lose their value. But Madoff never even tried to make money for his clients. He was only interested in lining his own pockets.

How Madoff could sleep nights knowing that he had swindled everyone from billionaires to charities to small union pension funds is beyond me.

Bernard Madoff may have never even actually traded any securities originally appeared on BloggingStocks on Fri, 16 Jan 2009 17:40:00 EST. Please see our terms for use of feeds.

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Before the Bell: Little holiday cheer for investors

Jonathan Berr — Wed, 24 Dec 2008 08:00:00 EST

Filed under: Before the Bell, Ford Motor (F), General Motors (GM)

Stock futures were little changed this morning, indicating Santa probably is not giving many presents to investors.

Markets in Europe and Asia were down in shortened holiday trading. Meanwhile, the U.S. struggles to absorb a litany of data that indicates that the economy continues to slow.

Crude oil prices plunged 1.2% to $38.50 a barrel. The weak housing market has raised concerns that the recession will deepen, depressing demand for fuel and other products, according to Bloomberg News.

Consumer spending in November may have dropped for a fifth straight month. Figures from the U.S. Commerce Department are due to be released at 8:30 a.m. Other data released by the Department today is expected to show a 3% decline in orders for durable goods, which are expected to last several years, according to Bloomberg.

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Before the Bell: Little holiday cheer for investors originally appeared on BloggingStocks on Wed, 24 Dec 2008 08:00:00 EST. Please see our terms for use of feeds.

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The individual investor walks out on the market

Douglas McIntyre — Mon, 22 Dec 2008 11:14:00 EST

Filed under: Analyst Reports, Economic Data, Recession

One of the things that happens in large market drops is that investors move from stocks into cash. As individual investor pull money from the equity markets, institutions come to dominate trading.

According to The Wall Street Journal. individual investors are sick of stocks. "Investors pulled a record $72 billion from stock funds overall in October alone, according to the Investment Company Institute, a mutual-fund trade group." It is almost certain that the trend continued last month.

Three things come out of the withdrawals and none of them is good. When individual investors are not in the market to buy it could push demand for stocks down even more, dropping prices more. For those still holding equities, this could drag the value of their portfolios lower even further. This also means a recovery of prices is less likely.

Second, cash moved to money market funds now gets yields which are among the lowest in history. Investors may be moving money to safer havens, but the returns are so low that there is no chance that their portfolios will recover.

The last and most insidious problem is that investors on the sidelines are investors who have no chance to recover when the market moves back up. It always has, and it will again. Timing that is nearly impossible, but for an investor who has lost 50% of his portfolio, being out of equities when they move up means missing a chance to get some capital back.

Off course, the safe play is not to stay in a market which may drop much further. But, the safe play is not always the right one.

Douglas A. McIntyre is an investor at 24/7 Wall St.

The individual investor walks out on the market originally appeared on BloggingStocks on Mon, 22 Dec 2008 11:14:00 EST. Please see our terms for use of feeds.

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How the market changes direction

Connie Madon — Wed, 10 Dec 2008 17:00:00 EST

Filed under: Good news, Market Matters

Imagine a conversation between two fictitious traders, Dave and Bob, who chit chat over their morning coffee before the markets open and exchange ideas about what to do next.

Bob: "What do you think Dave? Are we going to short the market today?"
Dave: "I'm not sure yet. You know, we've made a pile of money trading the short side, maybe its time to take another look at the long side."
Bob: "But Dave, look at all this bad news, why the market is bound to go back down. We've lost 533,000 jobs last month alone. And look at all the foreclosures. We're in a real mess."

This quite plausible conversation demonstrates how markets do not always mirror reality. Bob is probably going to short the market again. Meanwhile, Dave may dabble a bit on the long side. A few days later and the market may have squeezed many of the short sellers, and more traders are either moving to the sidelines or, like Dave, testing the long side.

The public, seeing that the market is not falling out of bed again is less inclined to sell and is more interested in doing Holiday shopping. In the end, markets change directions.

How the market changes direction originally appeared on BloggingStocks on Wed, 10 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

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An investment you can believe in

Daniel Solin — Sun, 07 Dec 2008 12:30:00 EST

Filed under: Other Issues, DJIA, Stocks to Buy

I advise people how to invest in the stock market. My books empower people to take charge of their investing: determine their asset allocation, buy a globally diversified portfolio of low cost index funds, and avoid brokers.

Frankly, it's a tough sell. Investors want the risk of risk-free investments, but the returns that come with taking significant risks. Most brokers and the financial media are more than eager to help them try to do so.

As Dr. Phil would say: How is this working for you?

It's not just about the current market meltdown. There is ample data indicating that, over the long term, the average equity investor makes a significantly lower return than he or she could obtain from FDIC insured Certificates of Deposit or Treasury Bills, with far less risk. This is a fairly predictable result, caused by stock picking, manager picking and market timing, all of which are peddled to gullible investors.

Historically, stock market investing has been the only way to keep pace with inflation and taxes. Nevertheless, it really is a lazy way to make money. You write a check, deposit it in an account and hope that it will grow into a bigger check so you can take it out some day and retire.

Continue reading An investment you can believe in

An investment you can believe in originally appeared on BloggingStocks on Sun, 07 Dec 2008 12:30:00 EST. Please see our terms for use of feeds.

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