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Consumer Confidence Indicates Market Bottom |
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By Justin Forest on
4/20/2009 2:20 AM
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The Consumer Confidence Index (CCI) measures the level of optimism of consumers. It turns out that this indicator is a good long term contrarion indicator. In the past 40 years, the indicator managed to pinpoint 5 market bottoms since 1969. That's a whopping 5 out 5 times!
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Will the Swine Flu be a repeat of SARs in 2003 |
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By Justin Forest on
4/20/2009 2:18 AM
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Back in early 2003, the world was hit by SARS (Severe Acute Respiratory Syndrome). What's interesting is the similarity of the the market environment to what we have today and the swine flu. In early 2003, the S&P 500 was running into its 3rd year of bear market.
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We won't fall off another cliff...not in this round. |
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By Justin Forest on
3/26/2009 9:26 PM
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It looks like we may have just touched the bottom of Round 2 of this multi-year secular bear market. The first one was in 2003. Even though the last two secular bear markets (1930's & 1970's) the PE reached an all time low of around 7 times earnings. While, the current PE on the broad market is just around 13 today, it doesn't look like it will fall all "off the cliff' again like in last November to extreme low valuations, not just yet. And here's why.
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Risks associated to ETFs |
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By Justin Forest on
10/5/2008 1:46 PM
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ETFs like Proshares and BetaPro in Canada have gotten more popular in the past year. Many of us have gotten rather concerned about the associated credit risk or counterparty risks when owning one of these ETFs. Morningstar recently reported what are some of the risks associated to trading ETFs.
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Subprime Mortgage Crisis Explained |
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By Justin Forest on
10/2/2008 3:42 AM
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Most of us are still quite confused about the whole subprimed mortgage mess that got us into this global financial crisis today. Check out this presentation on Google Docs...it pretty much explains everything in cartoon. Cute!
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Contrarion Buy - Dell |
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By Justin Forest on
5/6/2008 4:48 PM
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I am glad the market in general has been giving such a doom and gloom view on Dell. Its stock price halved from $40 to $20 just 3 years ago. I think it’s great because it simply gives me the opportunity to buy into a good, if not great, company like Dell.
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Warren Buffett's 4.5 billion bet on long-term index puts and what it means |
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By Justin Forest on
4/5/2008 9:49 PM
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Here's something interesting I found out in the 2007 Berkshire Hathaway annual report. By now, we all know Warren is a big bull in the stock market in the next 11 to 19 years. Looking by his actions, Berkshire sold puts on notional value of $35 billion. That's no chump change. It's a big bet! With actually very little risk. Let me explain but before, let's read what he wrote in the annual report.
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