Archive for the ‘Uncategorized’ category

In the third quarter, markets unfolded much as they had in the prior several months with a considerable level of calm prevailing in the major domestic investment asset categories. Beneath the surface, however, change was brewing and has broken out in the equity market in the beginning of the fourth quarter. In late September, we […]

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Rising interest rates have made 2018 a rocky year for bondholders so far. The only beneficiaries have been short-term savers and those waiting for more attractive prices on equities or longer fixed income securities. Notwithstanding the geopolitical drama and threats to world economic order from looming trade wars, not much has changed for U.S. equities […]

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Volatility is back! This year’s first quarter broke a nearly two year pattern of historic stock market calm. Before February’s sharp but brief decline, the market had completed 311 sessions without even a 3% dip and 405 sessions without a 5% decline. In a normal year, investors experience three 5% declines. In recent years, the […]

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It has been more than 400 days since the U.S. stock market experienced as much as a 3% decline–the longest stretch ever. Stock prices have risen for 14 straight months–also a record. And it has been almost nine years since there has been a meaningful correction lasting as much as a year. The longer markets […]

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Recently announced Nobel Prize winner Richard Thaler commented: “We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping. I admit to not understanding it.”  Legendary stock market veteran Art Cashin stated on CNBC: “I’ve been doing this for over 50 years, and I’ve never […]

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Is 7 an Unlucky Number?

August 3rd, 2017

Interviewed on CNBC Wednesday, UBS’s Art Cashin, a great market historian, indicated that in years that end in “7”, market declines have often begun in August’s first three weeks. I explored that claim for the Dow Jones averages back to the Dow’s initiation in the 1880s.  Hand-drawn daily graphs produced by the late Richard Russell […]

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Would you accept an 80% chance to earn 10% on your money if there were a 20% chance of losing 40%?  Such percentages may or may not be precisely descriptive of the current situation in the equity market, but they frame the dilemma today’s investors face. As we have discussed frequently over the past year, […]

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Last week provided a vivid example of the powerful forces currently influencing stock prices.  On Monday and Tuesday, prices rose, reaching all-time highs on some market indexes.  Despite underlying fundamental conditions that have historically corresponded with far lower valuation levels, short-term traders continued to buy even the smallest price dips.  After more than eight years […]

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The first quarter marked a continuation of the behavior characteristic of the stock market and economy for the better part of the past several years.  Stock prices sustained their post-election rally through the end of February, rising over 7% in the year’s first two months, then giving back a bit more than 2½ % to […]

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A friend sent me second-hand notes of a recent talk by Dr. Arthur Laffer at the University of San Diego and requested my comments.  I sent him the following. One quick anecdote.  When I headed a not-for-profit consulting office in the late-1970s in Washington, DC, a politically connected contact of mine asked if there were […]

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