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Category Archives: Uncategorized
The Full Time Employment Act of 2013—Republicans’ First Assault on ObamacCare
You heard it here months ago, and now the mainstream media has figured out that ObamaCare’s 30/50 rule is creating a part-time workforce. Employers must provide expensive health insurance if they have more than 50 “full-time” (over 30 hour per … Continue reading
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Tagged Obamacare, part-time employment, Republican Party, unemployment
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The PETRR Principal: How to Compare Growth Stocks and Yield Stocks
Today’s Wall Street Journal points out that despite weak EPS growth Procter & Gamble commands a higher PE ratio than Google because it has a juicy dividend. Investors reaching for yield are piling into high dividend stocks without paying much … Continue reading
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Tagged dividend stocks, dividends, growth stocks, stock market, stock valuations
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Pain Pay-off: Why Sequestration Is a Game-Changer
In the wake of the 1987 stock market crash, a wise and wily Wall Street executive told his troops “change only comes through pain and agony.” By bringing a healthy dose of “pain and agony” to Washington, sequestration will introduce … Continue reading
Profits: Good Enough for “Valuation Levitation” to Continue
First quarter earnings look OK but not great and broadly consistent with Wall Street strategists’ expectation of $108 for S&P 500 EPS this year. That’s bad news for bears who expect weak profits to derail the rally. Despite mediocre profits, … Continue reading
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Jews Against Free Speech
On Sunday we drove down to a synagogue in Edison, NJ to hear a talk by Pamela Geller, a controversial anti-Jihad activist. I counted four police cars outside because the Rabbi had received death threats and someone shot pellets at … Continue reading
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Q1 Profits: Soft, but Good Enough for Further Valuation Levitation
The media does a terrible job of covering profits. Here are a few tips. First, forget about the percentage of companies beating consensus, which is always way above 50% because companies guide estimates to a number they can beat. (Some … Continue reading
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Tagged bull market, David Stockman, profits, Stock Market Valuations, Stock Prices
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Stockman’s Scary Sundown – Five Lessons for Long-term Investors
If you want to know why, for most people, their house is a better investment than stocks, read David Stockman’s New York Times jeremiad “Sundown in America.” It is alarming articles like this that convince investors to avoid buying stocks until … Continue reading
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Tagged David Stockman, stock market bubble, stock market history
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Not a Bubble; Earnings Are Rising Nicely
Stocks are behaving as I expected. On Jan 18 I highlighted “valuation levitation,” writing “the market senses that, with rates so low and dividends set to keep growing, investors could decide that stocks deserve a materially higher valuation despite slow … Continue reading
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Tagged jobless recovery, profits, stock market, stock market bubbles
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Letter from London
It’s a little weird. Central London is booming. Fancy restaurants are packed on Tuesday night. Puny Chelsea townhouses sell for $8 million. Tourists throng Picadilly and Regent Streets. Chippendale mahogany and Tudor oak sell briskly at the BADA antiques fair. … Continue reading
Valuation Levitation Continues
As we expected, stocks are rising. Here are key themes to remember, which we have discussed before: Stocks are rising because they are attractively valued versus bonds and cash, and investors are more confident we won’t have a financial disaster. … Continue reading