Archive for October, 2011
For the past five weeks, it’s been treat after treat for bullish investors.
The “trick” will be seeing if it can last…
How sweet has it been?
The Dow rose 1,459.63 points in five weeks to end Friday at 12,231.11. The Industrials rose 3.6% last week alone. They’re up 14% in that short run, and we’re now up 5.7% on the year. The S&P 500 is also up 14% over the same timeframe, and the Nasdaq has been following dutifully.
The candy being held out has been the hoped-for resolution to all of Europe’s problems. Every little sign of forward movement burned the short tails of greedy bears hoping for a sovereign default and raging contagion.
On top of progress across the pond, earnings here at home have been another treat. Of the more than 300 companies in the S&P 500 that have reported third-quarter numbers, 71% beat analyst expectations.
The trick now will be seeing if it can last…
Is it ironic that my new e-letter is titled Insights & Indictments, and in our very first week, along comes the actual indictment of former Goldman Sachs director Rajat Gupta?
There’s nothing ironic about seeing the inevitable coming.
I would add that the six criminal counts levied against Mr. Gupta – also the former director of Proctor & Gamble and AMR Corp., and former managing director of consulting giant McKinsey & Co. – should more properly be termed an indictment of “crony capitalism.”
By the way, those five counts of securities fraud are a testament to what allegedly resulted from Mr. Gupta’s insider-tipping calls to convicted hedge fund billionaire Raj Rajaratnam.
But it’s the single conspiracy count that should be commanding the most attention.
Full story here…
Lately it seems everyone wants to know one thing: Are stocks going to rally through year-end?
The answer is an unqualified “maybe.”
To explain this uncertainty, let’s look at where the markets are today.
Last week, the Dow Industrials gained 1.4% to end the week at 11,808.79. The S&P 500 rose 1.1% to 1238.25. But the Nasdaq Composite fell 1% to 2637.46.
While it seems like stocks have come a long way in a short time – and they have – in the big picture, we’re still crawling and clawing our way up…
Here’s the full picture…
I’ve already expressed my desire to embrace the Occupy Wall Street movement.
I said last week that I would join in whole-heartedly if I knew exactly what the protesters were trying to achieve.
But I don’t know – and I’m not convinced they do, either.
Still, that doesn’t mean we should dismiss them entirely. After all, there are millions of Americans who sense there’s something terribly wrong with our capitalist system, but they can’t pinpoint exactly what it is either.
But I can…
Dear Occupy Wall Street Demonstrators,
Let me start by saying that I applaud your initiative. Grassroots protests are the essence of democracy. And as we’ve seen with the Tea Party movement and the Arab Spring, nonviolent protests are a powerful way to effect meaningful change.
Yet even though I’m 100% behind you in spirit, I can’t fully support your cause.
Don’t get me wrong, I want to join you. But I can’t – not yet, anyway.
And the reason why I can’t support your ultimate goals is a simple one: I don’t know what they are.
So how about this? I’m going to tell you what I stand for. I’m going to tell you what my goals are. And if you agree, then we can stand together. And i f you agree with me, I won’t wait another minute before joining you whenever and wherever I’m needed.
So here goes…
Wall Street – it’s the ultimate private money club.
Hedge fund millionaires, traders, politicians, regulators… They’re all shaking hands behind closed doors, scheming together to make yet another buck for themselves – at your expense.
You can’t beat the system, either. Wall Street is the system.
But you can certainly learn how to play it…
Indeed, if you have a spy inside the Library of Liars, you can get in ahead of the market-movers. You can ride their moneymaking coattails to the top. And best of all, you’ll never have to be an outsider again.
Welcome to Wall Street Insights & Indictments. Keep reading…