I get a kick out of watching how the cycle of emotions never changes over time.  If there’s one guarantee in the markets it is that people respond to the same environments with the same cyclical thought process.  And it’s funny to see how some portfolio managers think they’re immune to it.  As if only the guy on the street [...]

This Gordian knot cannot be simply cut with a sword. It must be painstakingly unpicked – and I fear that will take a very long time.

With a modestly positive economic environment, high profit margins, improving private investment, high budget deficits and a belief that stocks are cheap….the bulls get increasingly optimistic.  This is from Goldman’s Chief Equity Strategist David Kostin and his team: “We are raising our S&P 500 dividend estimates and index return forecasts for 2013 through 2015. We expect S&P 500 index will [...]

As illustrated (see image attached), you are faced with three urns, each containing 2000 balls. A has 2 reds and the rest black; B has 20 blues and the rest black; C contains 1 red, 10 blues and the rest black. You may reach into the urn of your choice and remove a ball at random. If you draw red, you get $1000; if you draw blue, you get $100; if you draw black, you get nothing.

Home Depot, a housing bellwether, reported a good quarter this morning and gave us a glimpse into the state of US housing and the recovery.  Here are some highlights: Same store comps were up 4.8% in the US.   EPS beat by 6 cents at 0.83 vs estimates for 0.77. HD CEO says housing is recovering: “In the first quarter, [...]

Paul Krugman wants to know why there are no deficit celebrations.  He says: “For three years and more Beltway politics has been all about the deficit. Urgent action was needed to avert crisis. A Grand Bargain absolutely had to be reached. Fix the Debt, now now now! So where are the celebrations now that the debt issue looks, if not [...]

More bad signs here on the manufacturing front following this morning’s Chicago Fed National Activity Index release.   The latest reading came in at -0.56 which brings the 3 month moving average to -0.04.  This is the second consecutive negative reading and the third in the last 4 months.  Current data is consistent with PMI readings that are basically hugging [...]

Here are some wild stats about the current rally in the S&P 500 in 2013 which brings the gains to 17%+: Of the twenty weeks this year, just four have been negative weeks.   Of the four negative weeks just one has included a loss over 2%. Of the four negative weeks just two of them included losses over 1%. [...]

Long week….I’m fresh out of brain cells this morning so have at it.  You can use this post to ask me anything, sling mud at me, talk amongst yourselves, pass along your wisdom, throw out a link worth reading or whatever you want.  And if you’ve got better things to do then have a great weekend and try to focus [...]