by Bryce

We have recently witnessed the steepest rally since the Great Depression. The market averages are up in excess of 25% in a month and continue to behave well under less than favorable news. While this is great from an investment perspective, I would just like to point out a few facts/opinions as it is easy to be caught up in all the recent optimism when in actuality things haven’t improved much. The facts below were provided by The Economist, April 11-17th 2009 edition.  (more…)

by Bryce

The short-term attention span of many people and similarly the media with respect to investing never ceases to amaze me. As mentioned by Forrest in “Has anything Changed,” are companies worth 20% more than they were two weeks ago? The common sense answer is no and yet their values as reflected by the equity markets indicates otherwise. I am by no means complaining about the recent rally but I would like to provide some perspective. 

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By Forrest Lowell

News Flash! The American economy is worth 7% more now than it was 24 hours ago! Of course the economy is not worth more today than yesterday; 20,967 more people are unemployed, thousands more just defaulted on their mortgage, millions of homes went unsold, 10’s of millions of square feet of commercial property continue to be unrented, and the tax payer just lost another trillion dollars. All in all I would say it was a pretty crappy day, unless of course you owned anything with a ticker symbol, then you think today was fantastic. But one needs to ask themselves if anything has changed.

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by Bryce

Ultra ETFs have become extremely popular for the average investor. They allow investors the ability to utilize leverage in favor or against a certain underlying index. Previously, an investor would have to rely on more complicated options strategies that have finite time frames or futures contract that bear substantially more risk. One very important aspect of these leveraged ETFs is that they provide twice the daily movement. Over the a period of a few days, this does NOT translate into a 2:1 return on the underlying index. 

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Call me crazy, but with the jobs reports as bad as they are, you would think that the markets would be cringing every time that they are released.  It is also safe to say that there have been no upside surprises, so why has  jobs report Friday been the safest trade since the 3rd of October.  That’s right, the last time that the S&P 500 finished lower on a jobs report Friday was the 3rd of October, 2008.  I am not necessarily advocating going out and getting ultra long the S&P, but if you think there is a bear market rally coming, why not chose Friday as the launching point.  One of the stocks I particularly like is Wells Fargo, they have a huge new short interest that I think are late to the game and will want to get out at the earliest sign of a rally.  So this Friday watch the markets with the jobs report, I would love to see what would happen if we had a positive surprise in the jobs numbers, it could be one of the messiest upside days in the history of the market.

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