It is difficult to get a man to understand something, when his salary depends on his not understanding it.
-- Upton Sinclair
When Apple announced its second-quarter earnings on
April 23, a flurry of news reports cited Wall Street analyst forecasts
to help explain the company's results. This is how the bottom lines of
companies and stocks are ordinarily explained to the public.
An analyst from Goldman Sachs (NYSE: GS )
noted that the March quarter was better than expected, but the June
quarter guidance was "far worse than feared." He ultimately lowered his
price target to $500 from $575, while maintaining a "buy" recommendation
on the stock.
An analyst from JPMorgan (NYSE: JPM )
also lowered his target price, in this case to $480 from $575, and
advised he expected "AAPL to remain range-bound" until there was more
visibility into new product launches. More bullishly, the analyst from Piper Jaffray felt Apple might trade higher in late 2013, and maintained his $688 price target and "overweight" rating.
Analyst opinions such as these routinely drive coverage of the stock market. But a new study, "Inside the 'Black Box' of Sell-Side Financial Analysts,"
by professors Lawrence Brown (Temple University), Andrew Call (Arizona
State University), Michael Clement (University of Texas), and Nathan
Sharp (Texas A&M), suggests that ordinary investors should look
elsewhere for insights into their favorite companies. (more)
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Saturday, June 8, 2013
How to Invest After Retirement
No one invests in a vacuum. Your investments are affected by a plethora of volatile factors over which you have little or no control, such as inflation, political upheaval, unemployment rates and positive or negative financial news. Two things you can control are how much money and where you invest, both of which might change significantly as you age. How you invest after you retire will likely be quite different from the way you invest during your prime earning years.
Step 1
Determine your current financial condition. As with any road map, to know how to end up at your final destination, you have to know where you are. Financially speaking, that means you need to know how much money you have coming in, how much you have going out, and what your assets and liabilities are. Start by creating a net worth statement. This is a simple two-column form on which you list all of your assets in one column and all of your liabilities in the other. Total both columns and subtract your liabilities from your assets. Whatever remains is your net worth. Next, create a cash flow statement. This is another two-column form with all of your regular income from all sources in one column, and all of your regular expenses in the other. Total both columns, then subtract your expenses from your income. Whatever is left is your cash flow.
Step 2
Determine your current and anticipated future needs. This part of your financial plan is as much art as science because no one can reliably predict the future. Use your cash flow statement to determine how much money you need to live on each year, and multiply that figure by the number of years you expect to live after retirement. According to Forbes magazine, if you retire at age 65, you can expect to live for at least another 14 years. Subtract your known income sources -- such as Social Security, pensions and/or 401(k) and IRA money -- from the amount you need to live on during your retirement. Whatever is left is the amount of money you must have available in your savings and investments to draw on during your retirement years. If you don't have that much available, you'll need to produce some additional income to make up the difference, or else lower your income expectations.
Step 3
Make an investment plan that suits your level of risk tolerance, while best meeting your needs for growth and income. Consider that you will likely be drawing on your principal as well as any earnings, such as interest or dividends, which your investments might produce. Investment professionals differ on how you should invest your money after you retire, but many advocate moving toward more conservative investments, including cash equivalents and fixed income investments such as bank certificates of deposit (CDs), U.S. Treasury securities and high-grade corporate or municipal bonds. For example, the American Association of Individual Investors recommends that investors over the age of 55 hold at least 50 percent of their investment portfolio in short- to intermediate-term bonds.
Consider how your investment payouts will be taxed. Traditional IRA distributions are taxed as ordinary income, while interest from municipal bonds is typically exempt from federal income taxes.
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Step 1
Determine your current financial condition. As with any road map, to know how to end up at your final destination, you have to know where you are. Financially speaking, that means you need to know how much money you have coming in, how much you have going out, and what your assets and liabilities are. Start by creating a net worth statement. This is a simple two-column form on which you list all of your assets in one column and all of your liabilities in the other. Total both columns and subtract your liabilities from your assets. Whatever remains is your net worth. Next, create a cash flow statement. This is another two-column form with all of your regular income from all sources in one column, and all of your regular expenses in the other. Total both columns, then subtract your expenses from your income. Whatever is left is your cash flow.
Step 2
Determine your current and anticipated future needs. This part of your financial plan is as much art as science because no one can reliably predict the future. Use your cash flow statement to determine how much money you need to live on each year, and multiply that figure by the number of years you expect to live after retirement. According to Forbes magazine, if you retire at age 65, you can expect to live for at least another 14 years. Subtract your known income sources -- such as Social Security, pensions and/or 401(k) and IRA money -- from the amount you need to live on during your retirement. Whatever is left is the amount of money you must have available in your savings and investments to draw on during your retirement years. If you don't have that much available, you'll need to produce some additional income to make up the difference, or else lower your income expectations.
Step 3
Make an investment plan that suits your level of risk tolerance, while best meeting your needs for growth and income. Consider that you will likely be drawing on your principal as well as any earnings, such as interest or dividends, which your investments might produce. Investment professionals differ on how you should invest your money after you retire, but many advocate moving toward more conservative investments, including cash equivalents and fixed income investments such as bank certificates of deposit (CDs), U.S. Treasury securities and high-grade corporate or municipal bonds. For example, the American Association of Individual Investors recommends that investors over the age of 55 hold at least 50 percent of their investment portfolio in short- to intermediate-term bonds.
Consider how your investment payouts will be taxed. Traditional IRA distributions are taxed as ordinary income, while interest from municipal bonds is typically exempt from federal income taxes.
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How to invest in a Broadway show
And it’s very much a business — and a thriving one at that. In the
theatrical season that just concluded, which will be feted with the Tony
Award ceremonies this Sunday, shows took in $1.14 billion. That’s about
on par with the previous season, but it’s still 58% higher than a
decade ago, when grosses totaled $720 million. And that’s not factoring
in secondary sources of profit, from film rights (perhaps you heard of a
certain Oscar-winning movie musical called “Les Miserables”?) to
touring productions (road grosses have topped $800 million annually over
the past few years).
But for every megamillion-dollar Broadway hit, like “Phantom of the
Opera,” “Wicked” or “The Lion King,” there are plenty of flops. In fact,
most industry insiders say that only about one in every four Broadway
productions turns a profit. “If you’re looking at this strictly as an
investment, you might as well go to Las Vegas and throw the dice,” says
Bill Hofstetter, who runs a New York-based advertising agency that
specializes in theater. Even more troubling of late has been the
potential for fraud: Consider the case of the musical “Rebecca,” which
was slated to open this season —the producers lost $60,000 in fees and
expenses to a former stockbroker, Mark Hotton, who was hired to raise
some of the millions needed to mount the show. (Hotton was arrested on
charges of fraud in 2012, but was granted bail earlier this week.
Meanwhile, the producers are still working on bringing “Rebecca” to the
stage.) (more)
Canadian Banks: The Next 25 Years (Bradley)
It’s confirmed. We have the healthiest banks in the world. They’ve all reported their second quarter earnings and the numbers are spectacular. Industry leader RBC had a return on equity of 19%, while CIBC and National Bank were over 20%. Yes, 20% in a 2% inflation world.
These results are important because Canadian investors are highly dependent on their banks. Bank stocks account for 21% of the S&P/TSX Composite Index and play an even larger role in most investment portfolios (especially when preferred shares and bonds are taken into account).
In contrast to other countries, Canadians have made a potful of money on bank stocks. It’s been a great twenty-five year run in which the Big Six saw their profits grow from $2 billion a year to almost $8 billion a quarter. Before I take a peek into the next twenty-five, it’s informative to look at what’s fueled the growth. (more)
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Nov. Beans & Dec. Corn Have Buy Signals Today
This is the 3rd buy signal in beans since the change in
trend in mid May On the weekly chart Nov. beans have broken out and are
getting near the top Of the range on the monthly chart beans have been
trending up for a year and in a rangeFrom $12 to $14 and looks like they
should go back to $14 Corn Dec has a fresh buy signal since the trend
changed to up in late May although we have been rang bound this next
move could take corn to 590 levels. The weekly chart is at the top of
the range the MACD has turned up 1st change in trend since it turned
down in September.
SEE CHART'S
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SEE CHART'S
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Warning For Those Of You Storing Metals From A 20 Year Trader In The Metals Business
SteveQuayle.com
Hello Steve,
Hello Steve,
Please share this with your fans.
I have been a broker for 20 years. Recently the major broker dealer I work
for asked me and my clients to leave due to too high of a concentration in
physical metals. After 4 months of trying to find a new home for my
business, and being denied by every major broker dealer in the US, I had
no choice but to become and RIA.
After three months of complete BS getting my RIA approved I am now in the
process of moving my clients and metals to the new custodian. Here is
where things get interesting. Every transfer is being rejected multiple
times for the any reason the old major broker dealer can come up with.
More interesting is all of the metals which have variable weights like
1,000 Silver, 100 oz gold and 50oz platinum, when the old broker dealer
finally does transfer the metals to the new custodian, NONE of the bars are
the same in weight or serial number as my clients statements. The old
broker dealer is having to come to me and my clients with bars of different
serial numbers and weight than the one listed on the statements or from
old trade confirms.
This mis-match on transfers proves to me that the old broker deal NEVER had
the metals and are now having to go acquire them to make good on client
transfers. Coincidentally, I was also a broker at Morgan Stanley in 2006
when MS got busted for excessive storage fees and it turned out MS never
owned the metals that were printed on client statements either.
Moral to the story, if you own metals at a major broker dealer, just
because they are printed on your statement, does not mean they exist. I
highly recommend shipping them home, even if they are in a qualified
account. If there too much to take out of a qualified account, transfer
them to a new custodian, for the new custodian will not accept the transfer
without video taping and verifying the move of metals from the storage
depository to the new storage depository.
Last thing, I am 100% for sure that the most of the metals have been
removed from the United States, and when the stock market and bond market
crashes this fall, all metals in private accounts will either not be there,
or confiscated.
Heed this warning people, then end is HERE.
God Bless Steve… Keep Telling The Truth… We Are Making A Difference
Stephen (20 year financial advisor from four of the largest broker dealers)
http://www.stevequayle.com/index.php?s=33&d=406
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I have been a broker for 20 years. Recently the major broker dealer I work
for asked me and my clients to leave due to too high of a concentration in
physical metals. After 4 months of trying to find a new home for my
business, and being denied by every major broker dealer in the US, I had
no choice but to become and RIA.
After three months of complete BS getting my RIA approved I am now in the
process of moving my clients and metals to the new custodian. Here is
where things get interesting. Every transfer is being rejected multiple
times for the any reason the old major broker dealer can come up with.
More interesting is all of the metals which have variable weights like
1,000 Silver, 100 oz gold and 50oz platinum, when the old broker dealer
finally does transfer the metals to the new custodian, NONE of the bars are
the same in weight or serial number as my clients statements. The old
broker dealer is having to come to me and my clients with bars of different
serial numbers and weight than the one listed on the statements or from
old trade confirms.
This mis-match on transfers proves to me that the old broker deal NEVER had
the metals and are now having to go acquire them to make good on client
transfers. Coincidentally, I was also a broker at Morgan Stanley in 2006
when MS got busted for excessive storage fees and it turned out MS never
owned the metals that were printed on client statements either.
Moral to the story, if you own metals at a major broker dealer, just
because they are printed on your statement, does not mean they exist. I
highly recommend shipping them home, even if they are in a qualified
account. If there too much to take out of a qualified account, transfer
them to a new custodian, for the new custodian will not accept the transfer
without video taping and verifying the move of metals from the storage
depository to the new storage depository.
Last thing, I am 100% for sure that the most of the metals have been
removed from the United States, and when the stock market and bond market
crashes this fall, all metals in private accounts will either not be there,
or confiscated.
Heed this warning people, then end is HERE.
God Bless Steve… Keep Telling The Truth… We Are Making A Difference
Stephen (20 year financial advisor from four of the largest broker dealers)
http://www.stevequayle.com/index.php?s=33&d=406
Stock Index Futures Have Biggest Losses of The Year, But Will The Bull Market Continue?
Recently, stock index futures suffered their biggest losses for 2013.
Up until two weeks ago, S&P 500 futures continued their historic
advance from 1432 to 1685. Since topping out in the third week in May,
there have been many technical indicators suggesting that a top has been
put in. Based on these new technical signals, I believe many sellers
have recently entered this market.
The major cycles remain positive. The intermediate and major cycles remain historically overbought, while one of the minor cycles is in the verge of reversing. Volume has significantly increased on the downside since the top was put in. The short term volatility signal from the VIX is turning bearish.
The Hindenburg Omen attempts to measure the health of the stocks within the New York Stock Exchange and the entire stock market as a whole. The goal of the indicator is to signal increased probability of a stock index reversal. The rationale for the indicator is that under normal trading conditions a substantial number of stocks may set either new annual highs or new annual lows, but they should not both be doing so at the same time. The signal comes into play when there is the simultaneous presence of many new annual highs and annual lows, which may signal a major reversal.
There are several conditions that comprise the indicator. The main ones are:
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The major cycles remain positive. The intermediate and major cycles remain historically overbought, while one of the minor cycles is in the verge of reversing. Volume has significantly increased on the downside since the top was put in. The short term volatility signal from the VIX is turning bearish.
June
13 S&P 500 Futures - Daily
Chart provided by APEX
There
is one other indicator that is getting a lot of attention now, which is
called the Hindenburg Omen. The Hindenburg Omen is named after the Hindenburg disaster of May 6, 1937, in which the German Zeppelin Hindenburg crashed and burned.13 S&P 500 Futures - Daily
Chart provided by APEX
The Hindenburg Omen attempts to measure the health of the stocks within the New York Stock Exchange and the entire stock market as a whole. The goal of the indicator is to signal increased probability of a stock index reversal. The rationale for the indicator is that under normal trading conditions a substantial number of stocks may set either new annual highs or new annual lows, but they should not both be doing so at the same time. The signal comes into play when there is the simultaneous presence of many new annual highs and annual lows, which may signal a major reversal.
There are several conditions that comprise the indicator. The main ones are:
- The daily number of new 52 week highs on the New York Stock Exchange and the number of new 52 week lows must be both greater than or equal to 2.8% of the sum of the NYSE stocks that advance or decline on that day.
- The NYSE index must be greater in value than it was 50 trading days ago.
- Each condition must occur on the same day. Once the indicator has occurred, it is valid for 30 days.
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