Week in Perspective 26-Feb-2021
It was an ugly week for the Nasdaq Composite, which dropped 4.9% as long-term interest rates continued to rise sharply and fuel valuation-oriented concerns. The S&P 500 fell 2.5%, the Russell 2000 fell 2.9%, and the Dow Jones Industrial Average fell 1.8%.
How Big is Private Equity?
If you are a regular reader of any financial media outlet, then you’ve no doubt seen mentions of private equity (PE) firms. Maybe it’s because a struggling company got taken private, like Toys “R” Us in 2005, or a major investment (or payout) some private equity group scored through venture or growth capital.
Energy Price Shocks
Recent frigid weather across the American South resulted in state emergencies, including in Texas where millions were without power and potable water for several days. And while Texas has an independent energy grid, the disruption to oil production and refineries was felt across global energy markets.
February 19, 2021 Weekly Market Recap
It was a good week for financial and energy stocks, as growth/inflation expectations increased, but it wasn’t so great for the growth stocks that were previously supported by really low interest rates. The Nasdaq Composite fell 1.6%, the Russell 2000 fell 1.0%, and the S&P 500 fell 0.7%. The Dow Jones Industrial Average (+0.1%) ended the week slightly higher.
Move Over FAANG, It’s FANMAG Now
Collectively referred to by the FANMAG acronym, Facebook, Amazon, Netflix, Microsoft, Apple, and Google (now trading as Alphabet) all substantially outperformed the US market in the eight calendar years that they have all been public companies (Facebook went public in May 2012).
SECURE Act and CARES Act
Over the last 18 months, Congress implemented two significant bills that have impacted retirement savings accounts. The SECURE Act was a bi-partisan effort directed at improving the ability of American citizens to increase retirement savings. The CARES Act was passed in response to the economic turmoil caused by the Covid-19 pandemic.
Investor Optimism Seems Elusive, Yet Always Rewarded
Investors (and humans in general) often find it more natural to be pessimistic. After all, with one’s hard-earned savings on the line, it’s hard not to focus on what can go wrong. This is made worse by the vast number of negative events and attention-grabbing headlines every day. Also, it just sounds more sophisticated to be pessimistic. Investors that exude optimism are often dismissed as unsophisticated. Yet, this optimism is always rewarded in the long run.
February 5, 2021 Weekly Market Recap
The stock market rebounded swiftly from last week’s decline, with the S&P 500 finishing higher in all five sessions and ending the week with a 4.7% weekly gain. The Russell 2000 gained 7.7%, the Nasdaq Composite gained 6.0%, and the Dow Jones Industrial Average gained 3.9%.
What the Heck is a Stonk?
If you have no idea what a “stonk” is, don’t worry about it. I had no clue until the last couple weeks brought a whole new social media world into the spotlight. The term “stonk” is basically just slang for “stock.”
Market and Economic Update (Feb. 2021)
This is our Global Market and Economic Update for February 2021 featuring recent performance of global stocks and economic data.
Cryptocurrency and Asset Allocation
Benjamin Graham, often considered to be the father of value investing, drew a stark distinction between speculating and investing. He considered speculation to be the buying/selling of securities that is based on price movement alone. Investing, on the other hand, is based on the analysis of factors such as company performance, sector trends, macroeconomic data, etc.
January 29, 2021 Weekly Market Recap
A word about the GameStop (GME) frenzy: Market volatility continued today as the battle between the GME short-sellers and traders raged on. Short-sellers are mostly holding on to their positions or they are being replaced by hedge funds willing to bet against the stock.
Race to $1 Trillion – Car Manufacturers
Starting this month I’m going to attempt to post occasional articles on an interesting topic that may, or may not be investing related. I’ll throw in a graphic to vividly illustrate the topic as well. Just stuff that I find interesting and informative, and hopefully you will too.
The GameStop “Short Squeeze”
If you’ve been tuned into any financial media outlets over the past few weeks, it would’ve been nearly impossible not to have heard about this story. The GameStop “Short Squeeze” has become the stuff of Wall Street Legend, and it’s also a sign of the times.
Worried About a Stock Market Bubble?
As the stock market continues its steep climb after last year’s bear market crash, some investors worry about the possibility of a bubble. Over this period, the S&P 500 has risen 70% with dividends reinvested even as the pandemic rages on, many businesses continue to feel the pinch, and there are concerns over inflation. This is especially the case in technology-led sectors that have significantly outperformed. Should you be concerned?
