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1 August 2011

S&P 500 Support Trendline in Question

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Predictably, a vast majority of people thought the markets would soar after a verbal agreement had been reached on the debt ceiling fiasco. Err, wrong. The bigger problems, at least in my opinion, is a potential breakdown of a 2 and 1/2 year support trendline in the S&P 500 index and a potential close under [...]

15 July 2011

Beware Those Who Say ‘This Market is Cheap’

Image Source: Chart of the Day If you’re an avid follower of the financial markets, no doubt you’ve heard a money manager make the claim that “this market is cheap” as a reason to get you, or keep you, invested in the stock market after it’s doubled from March 2009 to present. Truth is, that [...]

17 June 2011

S&P 500 Earnings Back to Credit Bubble Highs

Two years after making the observation that terrible earnings news was the time to buy (see first chart), it looks as if the billions of taxpayer dollars (via future earnings) have gotten corporate earnings back to credit bubble highs (see second chart). From May 18, 2009: An Index Fund Investor’s Dream: S&P 500 Earnings Nearing [...]

18 March 2011

Cisco Pays Dividend; I Feel Old

Cisco Systems, once touted as the 500lb gorilla of the high flying tech stocks back in the late 90s, showed its age maturity today by going dividend. In the dividend world, 6 cents on a $17 stock is virtually nothing, and with today’s growth is king mentality (see Apple, see Chipolte Mexican Grill, etc.), the [...]

3 March 2011

Tracking Performance of Lending Club Investment Returns

After posting my Lending Club investment strategy and returns for over a year now, I thought today was as good as any to post a quick summary and track my net annual return volatility. Summary Outperforming Lending Club’s benchmark index of 9.7% by ~4.5%. Loan payments generate ~$250/month of cash for reinvestment. Defaults: 2 loans [...]

16 February 2011

Barry Ritholtz on Front Running HFTs & Agnotology

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Once again, Barry Ritholtz proves why he’s the best “big picture” financial blogger on the web. Period. From my vantage point, no one has a better handle on ignoring agnotology all while using it to his advantage. [Ritholtz segment begins at 12:50.] Couple highlights: When you say the market’s integrity is questioned, it’s beyond any [...]

7 February 2011

My First Lending Club Loan Default

They say you always remember your first more than the others… So yes, after 1 1/2 to 2 years as a Lending Club investor, I finally got hit with my first default where a small $24 loss took my pretty little 15.64% NAR out behind the woodshed to a tune of 0.86%. A 14.78% NAR [...]

4 February 2011

P2P Lending Strategy: Older Borrowers Mean Safer Loans?

One static component of my constantly evolving Lending Club investment strategy is identifying borrowers who have a fairly long history of employment. In other words, that means: the older the better (but not at or beyond retirement age). 10 years plus with a single employer. decades of experience often imply management material. As the above [...]

3 February 2011

Michael Lewis and “Learned” Iconoclast Behavior

Every now and then, I get asked how can the individual investor learn to invest like Warren Buffet (an iconoclastic personality) or invest so they’re not always following the herd. The simple answer, aside from turning off financial television… The wise advice for the individual investor: be conservative, don’t listen to brokerage advice, and index. [...]

2 February 2011

The Q Ratio: Quantifying Reversal to the Historical Stock Market Mean

Being a total chartology geek and lover of anything that tracks the historical record of stock market performance (e.g. supercycles), it’s hard to resist posting these graphics discussing the Q Ratio. Briefly… The average (arithmetic mean) Q ratio is about 0.71. In the chart below I’ve adjusted the Q Ratio to an arithmetic mean of [...]

31 January 2011

Rental Demand Rising: Balance Returning to Real Estate?

One of my most important metrics for jumping back into the real estate investing game is on the rise: apartment demand is finally showing signs of life. With millions of families switching from being homeowners to renters, apartment-building values have soared. That isn’t good for renters, who enjoyed falling rents, landlord concessions and even offers [...]

22 January 2011

P2P Lending Investors Beware: Government Layoffs & State Bankruptcy Risk Increasing

Some time ago, I mentioned that P2P lending investors should no longer believe that a peer to peer lending loan to federal or state government employee is a “sure thing” or that government employees can never be laid off. Since then, lots of supporting evidence has manifested. Not only from state governments eying bankruptcy court [...]

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