Sell-off may continue, but don't panic
Sell-off may continue, but don't panic

Experts say that the recent market action feels 'more like a repositioning,' and that it won't stop anytime soon.

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The move reflects the management's view that the stock is undervalued, the company says.

By TheStreet Staff Sep 26, 2011 11:45AM

By Shanthi Bharatwaj, TheStreetTheStreet


Warren Buffett'sBerkshire Hathaway (BRK.B) on Monday said it plans to use cash on hand to buy back Class A and Class B shares at a premium of not more than 10% over the then-prevailing book value.

 

The move reflects the management's view that the stock is undervalued, according to a company statement.

 

You can beat this crazy market by focusing on trading companies set to report operating results.

By Jamie Dlugosch Sep 26, 2011 11:39AM

There is a tremendous amount of noise in the market that can influence stock price. Ultimately, the value of a stock is based on the present value of future profits.

 

When a company reports earnings results, market participants receive a key piece of information that can be used to determine the price of a stock. For a brief moment in time after a company releases its operating performance, the market will adjust pricing based on how the numbers match up against current expectations.

 

In many cases stocks of companies reporting results will move significantly higher or lower.

 

'Never let them see you sweat!' It was a great advertising campaign for a deodorant, and the central bank should have taken that advice.

By MoneyShow.com Sep 26, 2011 11:31AM

By Terry Savage, Special to MoneyShow.com


Nothing in the global economy changed overnight. But when the Fed announced it was tinkering with the interest-rate structure because it saw "significant downside risks to the economic outlook, including strains in global financial markets," the stage was set for mass fear.


The Fed rarely, if ever, comments on global financial markets. And if the Federal Reserve Bank of the United States admits it is worried, then every other banker, lender and investor on the planet should be worried. The results showed up in all global markets.

 

As animosity mounts among subscribers, will the addition of animated hits like 'Shrek' and 'Madagascar' make up for the potential loss of Starz content?

By TheStreet Staff Sep 26, 2011 11:30AM

the streetBy Jeanine Poggi, TheStreet

 

Netflix (NFLX) reportedly struck a streaming deal with DreamWorks Animation (DWA). But can the studio behind family hits like "Shrek" and "Madagascar" make up for the potential loss of Liberty Starz (LSTZA) content?

 

The New York Times reported Sunday that DreamWorks completed a deal with Netflix that would replace a previous deal with HBO. Analysts predict that the deal between Netflix and DreamWorks is worth about $30 million per movie over an unspecified period, the newspaper said.

 

"In the end, DreamWorks was kicked out of HBO, and Netflix is a buyer of last resort," said Janney Capital Markets analyst Tony Wible. "Frankly, paying $30 million per film seems expensive and would make the Starz deal look cheap, as the two studios there put out almost 30 movies a year versus two to three at DreamWorks."

 

Here are some defensive plays for those seeking shelter in this turbulent market.

By TheStreet Staff Sep 26, 2011 11:23AM

By Don Dion, TheStreetTheStreet


Here are five ETFs to watch this week.

 

1. iShares Dow Jones Select Dividend Index Fund (DVY)

 

Although the wild market action has been unsettling, adopting a reactionary investment strategy isn't appropriate. Rather than trying to game every market fluctuation, long-term investors should focus on defense with a solid collection of well-balanced, diversified products.

 

It could have long-lasting implications not just in the currency markets but in stocks and precious metals.

By MoneyShow.com Sep 26, 2011 11:07AM

By Tom Aspray, MoneyShow.com


The 14.7% drop in the shares of the SPDR Gold Trust (GLD) certainly got the market’s attention last week. It is the sharpest correction in some time, but veteran precious-metals investors are likely accustomed to the volatility. For example, in October 2008, GLD dropped by more than 28% in just three weeks, falling from a high of $99 to a low of $66.


Gold is lower again in early-Monday trading, and the CME margin hike that will take effect after Monday’s close is adding further downward pressure to both gold and silver prices.


Since the beginning of August, there have been some interesting changes in the relationship between the US dollar to gold and the S&P 500, which could have longer-term significance.

 

If nothing else, get a little perspective from last week's drop.

By InvestorPlace Sep 26, 2011 9:38AM

By Charles Sizemore, InvestorPlace.com


I know better than to say "I told you so" after warning of a gold bubble recently. The market gods tend to be jealous and vengeful and appear to take great pleasure in humbling the arrogant. So I know better than to tempt them.


Besides, even after last week’s bloodletting, gold still is one of the best-performing assets of 2011. The September sell-off has done little more than erase August's parabolic surge.


Still, it would only be appropriate if last week's action did mark the top. The market gods might indeed have a twisted sense of humor, and Donald Trump's high-profile blustery rant that immediately preceded the crash would have been a good opportunity for divine smite.

 

Nothing much good or bad is coming out of a gridlocked US. But whether Europe avoids catastrophe will determine the direction of the next 1,000 points on the Dow.

By Jim Cramer Sep 26, 2011 8:53AM

the street logoWhat matters more: Europe weakness, a China slowdown or a possible U.S. recession?

 

Easy. It's Europe. Here's why:

 

When Federal Reserve Chairman Ben Bernanke talks about significant downside risk, believe me, he's talking about significant downside risk from a collapse in Europe that might freeze credit. We don't have significant downside risk here in this country. Anyone who listens to any conference call -- whether from Nike (NKE), Oracle (ORCL), General Mills (GIS), Honeywell (HON), Norfolk Southern (NSC) or Federal Express (FDX), all of which we just heard from last week -- knows that the U.S. is pretty good. Not great but not horrible either.

 

What could make it horrible, though, is a sudden credit crunch in Europe that could reverberate here. I'm sure that Bernanke is also worried about all of the confusion coming out of Washington, D.C., and the inability of Congress and the president to get serious on anything, let alone job creation. But Bernanke knows that Europe is way behind us in fixing its banks and that the sovereign debt crisis is real and alarming.

 

So, no, we aren't the factor in this world economy.

 

Bearish sentiment and economic troubles continue to take their toll on the markets, but certain sectors look good and a buying opportunity may be right around the corner.

By MoneyShow.com Sep 23, 2011 6:39PM

By Tom Aspray, MoneyShow.com


Even though global stock markets were able to stabilize on Friday, the sharp declines last week added to the overwhelming negative sentiment in the markets.


The technical formations prior to last week suggested that stocks were vulnerable to decline, and the short-term outlook turned more negative Tuesday.


Of course, the magnitude of the decline was a surprise to all, and Thursday's sell-off was similar to the panic selling that occurred in early August. This gave the investment firms and major banks some vindication, as they have been racing each other for weeks to cut their forecasts for the economy and lower their year-end targets for the S&P 500.

 

Under pressure to ease the euro debt crisis, the ECB considers some new measures.

By Jim J. Jubak Sep 23, 2011 3:00PM
Apparently, even the European Central Bank will get the message eventually.

With pretty much every government in the world pounding on the Europeans to do more to address the euro debt crisis, the ECB has started to signal that it will do something at its Oct. 6 meeting.

Steps under discussion, Austria and Belgium’s members on the bank’s government council have told Bloomberg, include the reintroduction of 12-month loans to banks and a cut in the bank’s benchmark interest rate.
 

A JPMorgan strategist says equities will soon be cheap enough to entice buyers.

By TheStreet Staff Sep 23, 2011 2:58PM

the streetBy Robert Holmes, TheStreet

 

Investors have been told by analysts that the stock market rout is creating attractive values. But JPMorgan (JPM) U.S. equity strategist Thomas Lee, one of the most bullish analysts on Wall Street, says stocks aren't quite there yet.

 

Lee, in a research note today, says 53% of stocks have a price-to-earnings ratio, one of the key metrics of valuation, of less than 12 times forward earnings. By comparison, during market low in March 2009, 67% of stocks were that cheap.

 

"Investors have pointed to their reluctance to look at P/E valuations given concerns on earnings visibility," Lee writes in Friday's report, referring to skepticism over the accuracy of analysts' forecasts for corporate earnings. "But valuations ultimately mark lows -- stocks get cheap enough that buyers are enticed."

 

The site plans new features that encourage users to share, share, share -- and get some advertising in return.

By Kim Peterson Sep 23, 2011 2:43PM
Facebook's recent changes are driving some users crazy. They hate the new look, and they're letting Facebook know about it.

"This new Facebook is so freakin' aggravating!!!!!!!" complained one user. Another chimed in with this: "What a screw-up! It was working fine before the Facebook folks 'improved it.' I will no doubt use it LESS."

Get ready, folks. More changes are coming. 

Stock of the world's largest carmaker, recommended by analysts and scorned by investors, is down 44% on the year.

By TheStreet Staff Sep 23, 2011 2:01PM

By Ted Reed, TheStreetTheStreet

 

Global fears are taking their toll on many stocks that deserve better, among them those of the world's largest automobile manufacturer.

 

On Friday, GM (GM) shares fell below $20 for the first time, hitting $19.77 before rebounding to $20.96, up 3.5% in the early afternoon. The shares began trading in November after an initial public offering at $35 and began 2011 at $37.32. For the full year, GM shares are down 44%, while Ford (F) shares are down 42%.

 

Many analysts, including Efraim Levy of S&P Capital IQ, have long believed investors are not seeing GM's value.

 

"We think that GM is very undervalued," Levy said in an interview. "The market is overly pessimistic about future demand for vehicles."

 

Widespread recent selling in equities and gold looks to be a panic reaction by the masses, as opposed to a calculated response to real market data.

By MoneyShow.com Sep 23, 2011 11:31AM
By Tom Aspray, MoneyShow.com


The over 5% decline in the Dow Industrials in the past two days has turned investors’ focus back on the downside, which is different from the positive spin that prevailed just a week ago.


From a technical standpoint, I have been making the case that the rebound from the August lows was a typical flag formation. The Nasdaq Composite has been the strongest since the August lows, but the negative signals from the McClellan Oscillator as of Tuesday’s close indicated even the Nasdaq had likely topped out.


Those who sold at the August 9 lows have had almost two months to watch the market stage a typical 50% rebound. If anyone sold yesterday because stops were hit or as a result of a previously developed plan, that is fine, but Thursday’s drop suggested many were just hitting the sell button in a panic reaction.


The bearish sentiment of individual investors jumped sharply this week, as 48% are now bearish with just 25% bullish. These numbers are as of Wednesday, so they should become more bearish by next week.


Gold was also hit hard Thursday and could be vulnerable to more panic selling before the current correction is over. By looking at the charts, we can get a better idea of what may occur so that you can develop a plan based on data, not emotion.

 

The computer maker's moves hint at the end of an icon.

By InvestorPlace Sep 23, 2011 9:24AM

By Jeff Reeves, InvestorPlace.com


Back in 2006, Apple (AAPL) was riding high on the success of its iPod. The gadget accounted for more than 50% of first-quarter revenue that year as a digital music revolution was in full swing.


Now the iconic iPod is an afterthought, bringing in a mere 8% of Apple revenue -- and falling fast as other gadgets take over the digital jukebox role on top of many other functions.


So could Apple pull a page out of the Netflix (NFLX) handbook and voluntarily kill off a dying segment of its business? Would it make sense for Apple to refocus rather than just run the iPod into the ground?

 

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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.

This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More


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