Indexes might not be in correction territory, but they're getting closer. Now's the time to consider what moves to make.
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It is important to understand that even a much-followed stock like Cisco will suffer from inefficiency.
To function in everyday life, our brains are used to simplifying complex problems, through pattern recognition. We become accustomed to drawing straight lines when we see two points, and if we get a third or fourth point that fits the line, our confidence about the longevity (continuity) of the line increases exponentially. We become excited, even certain, about prospects of the company we’ve invested in when its stock has gone up for a long period of time, while we often dismiss stocks that have declined or flat-lined, especially if that happened for a considerable period of time.
The bank pared holdings of more than half of its touted stocks, filings show.
By Jake Lynch, TheStreet
A so-called Chinese Wall is supposed to exist between investment banks' research and asset-management divisions, but recent calls, especially coming from subprime-securities proponent Goldman Sachs (GS), warrant further scrutiny.
Goldman helped to catalyze the recent commodity sell-off as its researchers expected little upside when the economy hit a soft patch. Crude oil tumbled beneath $100 on that report. Then, three days ago, with few fundamental changes in the demand outlook, Goldman reversed its stance, advising clients to buy.
This flip-flopping from Wall Street's most closely followed researcher is being perceived by some as client-fleecing since the bank is able to trade in proprietary accounts before it releases research and the markets react, as they often do to Goldman's calls.
The BlackBerry maker faces a class-action lawsuit and shrinking market share as analysts cut their price targets on the stock.
This wasn't supposed to happen. RIM just launched the PlayBook tablet, its answer to the Apple (AAPL) iPad. And U.S. businesses are recovering and spending more, which should have been just the thing the BlackBerry maker needed.
Check out this analyst discussion about the stock, which one calls "a disaster." Post continues after video:
After weeks of downward progress for stocks and other assets, renewed weakness in the greenback has resurrected bullish spirits.
To summarize the correction in risk assets over the past month, you could boil it down to a stronger dollar. It all started with the assassination of Osama Bin Laden on the night of May 1. Suddenly America seemed stronger and more secure, sending the greenback higher.
And as a result, hedge fund types who had borrowed dollars to bet on silver, crude oil and stocks scrambled to close their trades. The results were the mini-crashes in silver and crude, significant drops in foreign stocks and a slow bleed lower for U.S. equities. Adding to the pressure has been a steady march of poor economic data.
But things are changing now as the dollar wilts again, setting the stage for a multiweek rally before the reality of slowing economic fundamentals and the end of the Fed's $600 billion QE2 stimulus sets in. Here's why, along with a few recommendations to play the rebound.
AIG's IPO is 'an utter debacle,' Sony hackers go on a global rampage and Arianna Huffington oversells AOL in this week's round-up of business buffoonery.
Here is this week's roundup of the dumbest actions on Wall Street.
5. AIG: The anti-LinkedIn IPO
Apparently, the words AIG and IPO don't get investors beating down the doors to get a piece of the action. Gee whiz, I wonder why?
While closely monitoring market action for clues about what lies ahead, more aggressive traders can look to profit from ETFs tracking the tech sector and gold.
Not if you mix shareholder returns into the equation.
By Tim Beyers
CEO compensation is a hot topic, especially now that the Dodd-Frank Act requires say-on-pay votes. With CEO pay and performance seemingly disconnected at the following company, the Fool invites you to judge for yourself whether this business's boss actually deserves such a hefty paycheck.
Few things are worse for investors than owning a piece of an "oh yeah" tech company. These are the Rodney Dangerfields of their industries. They've been around forever. They've even done impressive work in years past. But lately, whenever their names come up in conversation, it's almost always with the caveat, "oh yeah, I forgot about them." Adobe (ADBE) has become that kind of company, but you wouldn't know it from CEO Shantanu Narayen's pay package.
By owning both cyclical financial stocks and steady consumer staples, the Oracle can perform well in any market.
By Don Dion, TheStreet
As Warren Buffett has quipped, his favorite holding period for any investment is "forever." By sticking to a long-term time horizon when structuring his legendary investing portfolio, the famed billionaire has been able to weather numerous short-term shake-ups during his long career.
In examining his current holdings lineup, it is possible to uncover clues that will help retail investors mimic him and profit over the long run.
Buffett's portfolio taps into a wide range of market sectors, providing exposure to industries such as energy and health care. The largest chunks of the Berkshire Hathaway (BRK.A) portfolio, however, are dedicated to companies in the financial and consumer sectors.
These potential bargains could heat up.
By Jamie Dlugosch, StockPickr
I live in the frozen tundra of Minneapolis, where we are slowly -- and I mean slowly -- emerging from a dastardly long winter and a spring that hasn't sprung. It is hard to believe that summer, as marked by Memorial Day weekend, is right around the corner.
While many market participants slow down their investment activity in summer, I think there is plenty of money to be made by staying active. In the current environment, stocks are exhibiting weakness. Sellers are dominating the action, and pessimism is rising.
This is actually quite bullish for stocks. Yes, many risks remain, but current fiscal and monetary policy is conducive to economic growth. It may not be the strongest recovery on record, but we are growing, and we're likely to continue to do so.
We may get an up day if Portuguese bankers and German finance officials can stay out of the headlines.
The rhythm of the European crisis seems to have taken a different turn.
Rather than waking every morning to a story about how some Portuguese banker is worried, or a Greek minister is fretting, or unknown Spanish and German finance officials are digging in their heels or alternately letting go of them, the continent seems to have gone silent.
It is almost as if they can turn it off and turn it on again.
Some of this could be that there is a pre-honeymoon lull for Christian Lagarde, as she is almost certain to get the International Monetary Fund job. Some of it is because China says it is willing to buy the bonds of some of these countries. And some of it is a recognition that the German banks, at least according to Fitch, can handle even a Greek default, and that was quite surprising.
Economists were surprised by sluggish growth in the first quarter. Is this a blip or a trend?
The Google Wallet system will let users pay for items simply by waving their phones at cash-register readers.
Those are questions Google (GOOG) will be asking people later this summer as it rolls out Google Wallet, a new mobile payment system. Go to McDonald's (MCD), for example, and pay by waving your phone in front of special readers, like the MasterCard PayPass reader already in place at the fast-food restaurant.
There are safeguards in place so that people can't steal your phone and go on a shopping bender. The system stays shut down, for example, until you enter your PIN number at the store counter.
Post continues after this video explaining more about Google Wallet:
Recent selling in master limited partnerships (MLPs) has presented some low-risk entry points, allowing buyers to tap into sizable yields and attractive growth prospects.
I'm officially tossing them into the "too hard" pile.
By Matt Koppenheffer
Am I a flip-flopper?
I had been seriously skeptical of Chinese small caps before the worst of the meltdown began. But then, as the short "hit" pieces flooded the Web and the group's stock prices got absolutely clobbered, the value investor in me started to get intrigued.
But now it's time to finally throw up my hands, pull out the ol' white flag, and simply say, "I give up!" And I can thank Longtop Financial (LFT) for bringing me to this conclusion.
Longtop's shares were halted last week, and earlier this week the company filed with the SEC that its accountant (Deloitte Touche Tohmatsu) is walking away and its CFO has offered his letter of resignation. That all sounds bad enough, but it gets much worse. Check out the reasons that Deloitte told Longtop to talk to the hand:
As we work through this bout of market turbulence, investors can use these funds to gain exposure to industry giants like GE or steady dividend payers like Chevron.
By Don Dion, TheStreet
The investing environment has been shaken by the bloody political protests in the Middle East and Northern Africa, Japan's natural disasters, the commodities shakeup and most recently, the resurgence of the European debt crisis.
Although this rocky situation from these headwinds may prove too much to many, I advise against fleeing the marketplace at this time.
Rather, by making adjustments, it is possible for battered investors to weather current economic storms and prepare for clearer skies ahead.
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[BRIEFING.COM] The stock market finished the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains.
The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly.
Stocks began the trading day with modest gains ... More
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