8 reasons the market isn't worse
8 reasons the market isn't worse

Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.

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Greenlight Capital, in trying to reverse losses, short-circuits its strategy by buying dud stocks.

By TheStreet Staff Aug 16, 2011 12:41PM

TheStreet

By Robert Holmes, TheStreet

 

David Einhorn, trying to make up for losses in his Greenlight Capital hedge fund, is turning to unloved stocks such as Huntington Ingalls (HII) and Aeropostale (ARO) for a second-half rebound.

 

It's hard to tell who's having a tougher year, Einhorn or the New York Mets, the baseball team in which he's seeking to buy a $200 million stake. Einhorn's hedge fund fell 5% through the second quarter, prompting him to shake up his investments. The Mets are 20 games back in the standings in the National League East division.

 

Unfortunately, Greenlight Capital's four new positions have likely been unprofitable for Einhorn, who was brutalized by Yahoo (YHOO). In a letter to shareholders last month, Einhorn disclosed that Greenlight Capital sold out of its stake in Yahoo at a loss after the Internet search giant's dispute over the ownership transfer of Alibaba's online-payments business Alipay.

 

Only 4 sectors are higher for the year, but analysis indicates that a few are likely to outperform in the months ahead.

By MoneyShow.com Aug 16, 2011 12:19PM
By Tom Aspray, MoneyShow.com

It has been a wild year for most market sectors, and the sharp recent plunge in the stock market has not helped to clarify the picture. 

The first quarter’s star performer was the Select Sector SPDR Energy (XLE), which gained 16.8%, leading the second-best performer, the Select Sector SPDR Industrial (XLI), by over 8%.

For the year, only four sectors are in positive territory, but all have also been hit hard over the past three weeks, as they are all well below the 2011 highs and have broken several levels of support.
 

Billionaire investor Warren Buffett starts a stake in Dollar General, while hedge fund manager William Ackman boosts his company's position in Family Dollar.

By TheStreet Staff Aug 16, 2011 11:44AM

TheStreetBy Jeanine Poggi, TheStreet

 

Hedge fund managers are getting bullish on dollar stores. Should you?

William Ackman's Pershing Square Capital increased its stake in Family Dollar Stores (FDO) as of June 30, according to a regulatory filing.

Ackman now holds about 11.1 million shares of Family Dollar, valued at $6.4 billion, from about 10.9 billion shares prior to June.

In May, Ackman became the largest shareholder of the dollar store, saying the company was poised for gains due to the potential of a buyout.

 

The famed investor turned his portfolio inside out in the second quarter, with big buys and even bigger sells.

By TheStreet Staff Aug 16, 2011 10:51AM

By Frank Byrt, TheStreet

 

Legendary investor George Soros, 81, had a wild second quarter as his $5.6 billion hedge fund added 198 stocks and sold 348 in what turned out to be a wholesale reshuffling of his portfolio.

 

A few of the largest acquisitions for Soros Fund Management were Golar LNG Partners (GLNG), which operates a fleet of liquid-natural-gas carriers; computer giant International Business Machines (IBM); Semiconductor HOLDRs (SMH), an exchange-traded fund that invests in semiconductor makers; VMware (VMW), a provider of virtualization software for cloud-computing systems; and SandRidge Energy (SD), an oil and natural-gas company.

 

The fund closed out of its positions in Internet search engine Google (GOOG), at $68 million; luxury-goods maker Coach (COH), a $46 million position; gold miner Novagold Resources (NG), which was a $45 million stake; Power-One (PWER), a maker of power-conversion and power-management products, in what had been a $25 million stake; and a $25 million position in Tenet Healthcare (THC), an owner and operator of health care facilities. Those are just a few of the largest sell-offs.

 

It hurts even at the top, with some bosses taking a 50% pay cut. But don't cry for the guys still making eight figures.

By InvestorPlace Aug 16, 2011 9:38AM

By Jeff Reeves, InvestorPlace.com editor


As prices of gas and food have crept up while wages have remained largely stagnant, many Americans are feeling the squeeze. Even if you haven't been laid off, you may face a furlough. Even if you don't face days off without pay, you may still be suffering under a wage freeze. And even if you get a 1% or 2% raise, that may not keep pace with inflation, the way things are going.


Throw in the stock market antics messing with your 401k or IRA, and it can be depressing to look at your bank account.


Since misery loves company, perhaps it's worth pointing out big-name companies where CEO compensation has also been falling, with some executives taking as much as a 50% cut. You may find it comforting to know that even the guys at the top are feeling the squeeze.

 

With Europe's biggest economy growing at just 0.1%, we must remain on recession watch.

By Jim Cramer Aug 16, 2011 8:47AM

the streetthe streetDid anyone actually believe that all of these crises in government would be good for the economy?

 

Did anyone think Germany was in as good shape after the past month as it was before?

 

Yet when a weak German GDP number came out this morning -- 0.1% growth, down substantially from 1.3% growth in the previous quarter -- markets nosedived as if people had been thinking that the little engine that could runs no matter what it's fed, including the thin gruel of total lack of confidence, fiscal austerity, and worldwide tightening and indecision.

 

I've been on recession watch ever since we started the horrendous budget process that led to a nearly disastrous deal, and I have been waiting for data like this to shock people into realizing how much damage was really done. The answer is: a whole lot of damage.

 

Did the August sell-off in the Tokyo stock market take prices down too far?

By Jim J. Jubak Aug 15, 2011 4:42PM
Jim JubakHere's the question that global stock markets are grappling with now: If global economies are slowing, stocks should get marked down in price. But by how much?

Monday's economic data from Japan and the reaction of the Tokyo stock market suggest the August sell-off may have gone a bit too far.

The news certainly wasn’t good from Japan. Gross domestic product fell at a 1.3% annualized rate in the second quarter. That's the third consecutive quarterly decline. Japan is most definitely back in recession.

But GDP fell more slowly than the 2.5% drop projected by economists, as spending on reconstruction efforts after the March earthquake and tsunami started to offset some of the damage from the event itself, and the slowing in exports caused by a stronger Japanese yen.
 

A diversified portfolio is a must, right? Not for most people, says investor Mark Cuban.

By Kim Peterson Aug 15, 2011 4:12PM
Oh, sure, it sounds great to have a diversified portfolio. That's one of the golden rules of investing. But what does that even mean, and can the average investor pull it off?

Investor Mark Cuban, who also owns the Dallas Mavericks, says it's impossible for most people to diversify because it's simply too hard to learn about all the different categories.

You're supposed to invest in what you know, right? Well, how can you invest in what you know but then spread your investments into emerging markets, real-estate investment trusts, small-cap stocks, dividend-paying stocks and bonds? 

Your brain meets your money.

By Motley Fool Pick of the Day Aug 15, 2011 3:46PM

By Morgan Housel

 

After being burned by one of the worst investment bubbles in history, Isaac Newton reflected. "I can calculate the movement of the stars, but not the madness of men."

 

That's just as true today. It doesn't matter how smart you are. You'll be broke before long if you don't have the right mind-set. As markets continue to bleed investors dry, all of us would do well to stop, take a deep breath, and spend a few minutes thinking about some of the innate biases that lead investors astray.

 

Here are three.

 

Economist Nouriel Roubini says 5 factors helped turn the nation's economic surplus into a deficit during Bush's presidency.

By Kim Peterson Aug 15, 2011 2:32PM
One well-known economist says that former President George W. Bush is to blame for the current economic crisis.

Nouriel Roubini, a New York University professor nicknamed "Dr. Doom" for his dour views on the economy, says in this video that when President Obama came to power, he inherited a budget deficit of $1.2 trillion. When Bush came to power, the country had a surplus of $300 billion.

How did we get a $1.5 trillion change in our fiscal condition during Bush's time in office? Roubini lists five factors:  

These exchange-traded funds allow investors to play this market for its strengths and weaknesses.

By TheStreet Staff Aug 15, 2011 1:31PM


TheStreetBy Don Dion, TheStreet

 

Here are five ETFs to watch this week.

 

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

 

The global markets' whipsaw action over the past week has injected a hearty dose of fear into investors around the world.

 

While it may be tempting to flee these markets, I encourage investors to avoid taking brash action. Defensive-minded asset classes like dividend-paying equities, gold and safe-haven currencies will allow investors to not only weather the current storms, but also prepare for the market's eventual turn around.

 

The Big Mac Index suggests a new long-term trend for the yuan while the US dollar tries to bottom. These ETFs could make good alternatives to stocks in this volatile market.

By MoneyShow.com Aug 15, 2011 12:18PM
By Tom Aspray, MoneyShow.com

Since 1986, The Economist has published the “Big Mac Index,” which strives to determine the correct value of the major currencies based on purchasing power parity, or PPP. Its underlying principle is that a dollar should buy the same amount in all countries, and the McDonald’s Big Mac is used to represent a basket of goods.


I have always found the index quite interesting, and the latest results were released late last month. Though I doubt anyone uses the data to trade currencies or currency ETFs, year after year, there are some interesting trends.
 

Professional money managers say almost every stock is worth considering now as the market gyrates with every new economic report and development.

By TheStreet Staff Aug 15, 2011 11:49AM

TheStreet

By Robert Holmes, TheStreet

 

Individual investors have been increasingly fearful as they grapple with wild swings in the stock market. Professional investors, on the other hand, say there are plenty of value stocks for folks who can stomach the risk.

 

The Dow Jones Industrial Average ($INDU) has swung wildly this month, but with many stocks trading at only 11 times earnings in a near-zero-interest-rate environment, professional investors are turning greedy while the masses have become fearful.

 

Brian Frank, the manager of the Frank Value Fund (FRNKX), says the valuation of his portfolio was the cheapest ever heading into second-quarter earnings, and that includes during 2008 and 2009, when share prices plummeted in the heart of the deep recession. "Guess what. Now it's even cheaper," he says. "The fundamentals are still getting stronger, even if there is economic weakness in the future."

 

High hopes for companies like Facebook, Zynga and Twtter have individual investors looking to get in ahead of their public trading debuts.

By TheStreet Staff Aug 15, 2011 11:46AM

the streetBy Joe Mont, TheStreet


Are you upset you didn't get in on the LinkedIn (LNKD) and Pandora (P) IPOs? Not just because you passed on their public offerings but because you didn't have a horse in the race before they went public?

 

For the most part, private investing in pre-IPO companies has been an exclusive and expensive club, limited mostly to financial and venture capital firms or very wealthy individuals. Facebook, for example, announced earlier this year that it was offering up to $1.5 billion of securities to clients of Goldman Sachs (GS), provided they invested at least $2 million and pledged to hold the shares until 2013.

 

Increasingly, however, smaller investors are looking for ways to hop the fence and join the party, especially given the hot prospects of several well-known Web-based and social-media-focused companies.

 

Doing so is easier said than done.

 

The discount giant is losing its reputation as the low-price leader. If it doesn't stand for bargains, what is the company's strategy?

By TheStreet Staff Aug 15, 2011 11:19AM

By Jeanine Poggi, TheStreet

 

Wal-Mart's (WMT) crown as the low-price king has been tarnished.

 

The discount giant, which prides itself on its motto of "Save Money, Live Better," appears to have lost its price perception among consumers. According to a survey conducted by WSL Strategic Retail, 86% of Wal-Mart shoppers no longer believe the retailer has the lowest prices.

 

"Every brick-and-mortar retailer lowered prices and shouted sales throughout the recession, while the Internet became the go-to place for shoppers in search of the lowest prices," the report said.

 

This raises a serious conundrum: If Wal-Mart no longer stands for everyday low prices in the eyes of consumers, what does it stand for?

 

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[BRIEFING.COM] Recent action saw the S&P 500 (+0.2%) climb to a new session high. The move also helped the Nasdaq (+0.2%) return into the green, but some portions of the tech-heavy index continue showing relative weakness.

The high-beta biotech group lags with the iShares Nasdaq Biotechnology ETF (IBB 256.65, -2.69) trading lower by 1.0% after spiking 2.2% yesterday. Similarly, chipmakers are also on the defensive with the PHLX Semiconductor Index lower by 0.6%. Qualcomm ... More


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