FAAMG Stocks: Facebook $FB, Amazon $AMZN, Apple $AAPL, Microsoft $MSFT, Alphabet’s Google $GOOGL $GOOG, collectively known as FAAMG (FAANG minus Netflix plus Microsoft), now have a total of more than $7 trillion in market cap as of Aug 28, 2020, almost 25% of the S&P 500, with "index concentration" now the highest in over 20 years.
Calendars: Earnings; Economic here & here; FED; US House & Senate Hearings; BLS & BEA.
2021 March 03 US Stocks Fall NASDAQ Composite breaks below 13000 -- DJIA -0.39%, S&P 500 -1.31%, Nasdaq Composite -2.70%:
Market Liquidity, Inflation, & Financial System | ITK with Cathie Wood:
On episode XIII of "In the Know" (Feb. 26, 2021), ARK CEO/CIO, Cathie Wood, talks about market worries, including impact of rising rates, Bitcoin, liquidity of the market, inflation vs. deflation, and the financial system. She also weighs in on fiscal policy, monetary policy, market signals, economic indicators, and more, excerpt:
"i was surprised to learn that uh one of the most expert journalists and consultants in the space, at Morningstar, was was basically feeding into the fears of the market."
Warren Buffett’s Annual Letter to Berkshire Hathaway (BRK.A and BRK.B) shareholders, Saturday, Feb 27, 2021 via Annual Report posted at BerkshireHathaway.com, excerpt:
"Investing illusions can continue for a surprisingly long time. Wall Street loves the fees that deal-making generates, and the press loves the stories that colorful promoters provide. At a point, also, the soaring price of a promoted stock can itself become the “proof” that an illusion is reality."--Warren Buffett
2021 Feb 26: DJIA -1.50%, S&P 500 -0.48%, Nasdaq Comp +0.56%. For the month: DJIA +3.2%, S&P 500 +2.6%, Nasdaq Composite +0.9%.
LIVE Earnings Webcasts:
- Feb 24, 5pm EST Nvidia | NASDAQ: NVDA
- Feb 25, 5pm EST Salesforce | NYSE: CRM
- Feb 25 5pm EST Airbnb | NASDAQ: ABNB
- Feb 26 8:30am EST DraftKings | NASDAQ: DKNG
2021 Feb 25 US Stocks Fall as Treasury Yields Rise: DJIA -1.75%, S&P 500 -2.45%, Nasdaq Comp -3.52%:
Feb 24 rebound: DJIA +1.35%, S&P 500 +1.14%, Nasdaq Comp 0.99%
Feb 22: DJIA +0.09%, S&P 500 -0.77%, Nasdaq Composite -2.46%, on rising bond yields and inflation concerns.
Feb 19: DJIA 0.00%, S&P 500 -0.19%, Nasdaq Composite +0.07%. For the week: DJIA +0.1%, S&P 500 -0.7% and Nasdaq Composite -1.6%
Feb 18 12noon EST: US Congressional Virtual Hearing - Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide - Witnesses: Vlad Tenev (pdf), Chief Executive Officer, Robinhood Markets, Inc. ; Kenneth C. Griffin (pdf), Chief Executive Officer, Citadel LLC; Gabriel Plotkin (pdf), Chief Executive Officer, Melvin Capital Management LP; Steve Huffman (pdf), Chief Executive Officer, Co-Founder, Reddit; Keith Gill (pdf), a/k/a DeepFuckingValue on Reddit and Roaring Kitty on Twitter and YouTube; Jennifer Schulp (pdf), Director of Financial Regulation Studies, Cato Institute. House Financial Services Committee memo (pdf).
Feb 18: DJIA -0.38%, S&P 500 -0.44%, Nasdaq Comp -0.72%
Feb 16-19 LIVE Earnings Webcasts: Feb 16 Palantir (NYSE:PLTR), CVS Health (NYSE:CVS), US Foods (NYSE:USFD), AutoNation (NYSE:AN), AIG (NYSE:AIG); Occidental Petroleum (NYSE:OXY); Feb 17 Analog Devices (NASDAQ:ADI), Baidu (NASDAQ:BIDU), Shopify (NYSE:SHOP), Hilton Worldwide (NYSE:HLT); Feb 18 Walmart (WMT), Southern Company (NYSE:SO), Applied Materials (NASDAQ:AMAT), Roku (NASDAQ:ROKU); Feb 19 Magna International (NYSE:MGA), Deere (NYSE:DE).
For the week ending Feb 12, 2021: DJIA +1%, S&P 500 +1.2%, Nasdaq Composite +1.7%. U.S. markets will be closed on Monday in observance of Presidents Day.
2021 Feb 12 US Benchmarks end week at record highs: DJIA +0.09%, S&P 500 +0.47%, Nasdaq Comp +0.50%:
Q4 Earnings LIVE Webcasts Feb 9-11: Feb 9 Twitter (NYSE:TWTR), Cisco (NASDAQ:CSCO); Feb 10 GM (NYSE:GM), Uber (NYSE:UBER); Feb 11 Disney (NYSE DIS), Verisign (NASDAQ:VRSN) 4:30pm EST Registry .COM price increase Sep 1, 2021, to $8.39 (up from $7.85); GoDaddy (NYSE:GDDY) 5:00pm EST.
Feb 8 US Stock Indexes new highs on new stimulus hopes: DJIA +0.76%, S&P 500 +0.74%, Nasdaq Comp +0.95%
Feb 5: DJIA +0.30%, S&P 500 +0.39%, Nasdaq Composite +0.57%. For the Week: DJIA +3.9%, S&P 500 +4.7%, NASDAQ Comp +6%, Russell 2000 +7.7%:
Qualcomm (NASDAQ: QCOM) Q1 FY21 LIVE Earnings Webcast Feb 3 4:45 pm EST. $QCOM drops 7% in after hours trading:
2021 Feb 3: DJIA +0.12%, S&P 500 +0.10%, NASDAQ Comp -0.02%
Q4 Earnings LIVE Webcasts Feb 2 (EST US): Alibaba 7:30am (NYSE: BABA), Pfizer 10:00am (NYSE:PFE), Alphabet (Google) 5:00pm (NASDAQ: GOOG / NASDAQ: GOOGL), Amazon 5:30pm (NASDAQ: AMZN), Exxon Mobil 9:30am (NYSE: XOM).
2021 Feb 2: DJIA +1.57%, S&P 500 +1.39%, Nasdaq Comp +1.56% Google ($GOOG $GOOGL) Surges Afterhours on Q4 Results:
For the month of January 2021: DJIA -2%, S&P 500 -1.1%, Nasdaq Composite +1.7%.
Jan 29: DJIA -2.03%, S&P 500 -1.93%, Nasdaq Composite -2.00%, For the week $AMC UP 278%, Gamestop $GME UP +400% for the week:
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| GameStop $GME |
Jan 27: Gamestonk! $GME UP 353% in 2 Days! $AMC UP 301% in 1 Day! Benchmarks: DJIA -2.05%, S&P 500 -2.57%, Nasdaq Composite -2.61%.
Tesla (NASDAQ:TSLA) Q4 &FY2020 Financial Results and Q&A Webcast: https://ir.tesla.com (live and replay) Jan 27, 2021, 6:30 pm EST
Others reporting earnings this week:
Jan 26: Verizon (NYSE:VZ), Johnson & Johnson (JNJ), General Electric (GE), Lockheed Martin (NYSE:LMT), American Express (NYSE:AXP), Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX), Texas Instruments (NASDAQ:TXN) and AMD (NASDAQ:AMD) ; Jan 27: Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), AT&T (NYSE:T), Boeing (BA), Abbott Laboratories (NYSE:ABT) and Lam Research (NASDAQ:LRCX); Jan 28: Comcast (NYSE:CMSA), Dow (NYSE:DOW), (NYSE:NOC), McDonald's (NYSE:MCD), Altria (NYSE:MO), Mastercard (NYSE:MA), Mondelez International (NASDAQ:MDLZ), Visa (NYSE:V) and Western Digital (NASDAQ:WDC); Jan 29: Ericsson (NASDAQ:ERIC), Chevron (NYSE:CVX), Phillips (NYSE:PSX), Caterpillar (NYSE:CAT) and Eli Lilly (NYSE:LLY).Jan 22: DJIA -0.57%, S&P 500 -0.30%, Nasdaq Composite +0.09%. For the week: DJIA +0.6%, S&P 500 +1.9%, Nasdaq Composite +4.2%. the small-cap Russell 2000 RUT +2.2%.
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| NASDAQ Composite (Jan 19-22, 2021) |
Jan 21: $IBM Stumbles, DJIA -0.04%, S&P 500 +0.03%, Nasdaq Comp +0.55%
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| $IBM Jan 21, 2021 |
Q4 Earnings Jan 19-21: Jan 19: Bank of America (NYSE:BAC), Charles Schwab (NYSE:SCHW), Goldman Sachs (NYSE:GS), J.B Hunt Transport (NASDAQ:JBHT) and Netflix (NASDAQ: NFLX); Jan 20: UnitedHealth (NYSE: UNH), Procter & Gamble (NYSE: PG), Morgan Stanley (NYSE:MS), United Airlines (NASDAQ:UAL) and Kinder Morgan (NYSE:KMI); Jan 21: Travelers (NYSE:TRV), Baker Hughes (NYSE:BKR), IBM (NYSE:IBM) and Intel (NASDAQ:INTC).
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| S&P 500 |
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| Netflix $NFLX (Jan 19, 2021) |
2021 Jan 15 US Stock Markets Stall & Fall: S&P 500 -0.72%, Nasdaq Composite -0.87%, DJIA -0.57%. For the week S&P 500 -1.5%, NASDAQ Composite -1.5%, DJIA -0.9%.
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| S&P 500 |
2021 Jan 08: S&P 500 +0.55%, Nasdaq Composite +1.03%, DJIA + 0.18%. For the week: S&P 500 +1.8%, Nasdaq Composite +2.4%, DJIA +1.6%, Russell 2000 +5.9%. Worst Jobs Report since April fails to quell market madness:
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| NASDAQ Composite |
Editor's note: For 2021 and beyond, I sincerely hope you're positioned to enjoy the ride!
"the fact that the Fed now explicitly caters to idiots, CNBC talking heads and clueless BTFDers, means that it is completely unclear who the winner of this clash will be. To be sure, judging by the 14x outperformance of retail traders vs hedge funds, one can argue that the Robinhood juggernaut can continue indefinitely until such time as the Fed realizes the catastrophic consequences of what it has unleashed ... which may well be never" -- ZeroHedge.com Dec 30, 2020
“Risk on” is not without risk and the market corrects almost 20% in the first half, but the S&P 500 trades at 4,500 later in the year." -- Byron Wien and Joe Zidle Announce the Ten Surprises of 2021
Week, Month, Quarter, & Year ending Dec 31, 2020 (Year of the COVID-19 Pandemic):
- DJIA +1.4% this week, +3.3% in December, +10.2% in Q4, and +7.3% in 2020.
- S&P 500 +1.4% this week, +3.7% in December, +11.7% in Q4, and +16.3% in 2020.
- NASDAQ Composite +0.7% this week, +5.7% in December, +15.7% in Q4, and +43.6% in 2020, its best annual performance since 2009.
Dec 21: Tesla (NASDAQ: TSLA) joins the S&P 500 (at $TSLA closing price Dec 18), and is likely to increase volatility of the index itself, say some strategists. Tesla will be one of the ten most valuable companies in the S&P 500 index with a projected weighting of about 1.6%.
S&P 500 +0.18%, Nasdaq Composite +0.50%.
BARRON'S Video (Dec 7, 2020): Short Seller Jim Chanos on Navigating the Golden Age of Fraud and Short Sellers: Evil Geniuses or Village Idiots? Chanos discusses current market valuations, the concept of "legal fraud" (everything done legally but with an overall intent to mislead), and increasingly manipulated financial metrics used by corporations in reporting financial results such as 'adjusted EBITDA' and 'Total Addressable Market' or TAM. Money quote: "Tesla ($TSLA) is the biggest debacle since America Online (AOL)."
2020 Dec 04 ARK Invest's Cathie Wood: Employment Report, Market Commentary & Bitcoin
Notable Q3 2020 Earnings Season LIVE Webcasts Oct 27-29:
- Oct 29: Alphabet (Google) | $GOOGL $GOOG earnings & revenue beat expectations
- Oct 29: Apple | NASDAQ: AAPL earnings & revenue beat expectations
- Oct 29: Twitter | NYSE: TWTR earnings & revenue beat expectations
- Oct 29: Amazon | NASDAQ: AMZN earnings & revenue beat expectations
- Oct 29: Facebook | NASDAQ: FB earnings & revenue beat expectations
- Oct 27: Microsoft | NASDAQ: MSFT earnings & revenue beat expectations
See also Q3 Earnings LIVE Webcasts Oct 19-22: IBM $IBM; Tesla $TSLA; Verisign $VRSN results (pdf) | Intel $INTC results
Oct 5-9: 2020 NVIDIA GPU Technology Conference; CEO Jensen Huang Keynote replay (no registration required), on Nvidia's longer-term vision in "all-pervasive AI/accelerated computing." Oct 6-8: Arm DevSummit 2020 Virtual Conference featuring a fireside chat with Arm CEO Simon Segars and NVIDIA CEO Jensen Huang, topics: (1) what the combination of Arm and NVIDIA could mean for the future of AI, (2) more on NVIDIA’s plans for its AI Center of Excellence in the UK and (3) news from NVIDIA on its support for the Arm ecosystem. Shares of $NVDA are up 122% YTD (Oct 2).
Sep 14 LIVE Webcast replay: NVIDIA (NASDAQ:NVDA) to Acquire Arm for $40 Billion:
S&P 500 has its best August since 1986. Aug 31: S&P 500 -0.22%, DJIA -0.78%, NASDAQ Composite +0.68%. August 2020: S&P 500 +7%, DJIA +7.6%, NASDAQ Comp +9.6%.
Jackson Hole Symposium 2020 Aug 27-28 LIVE Stream: The Federal Reserve Bank of Kansas City announced its 44th annual Economic Policy Symposium, “Navigating the Decade Ahead: Implications for Monetary Policy,” due to the pandemic, as an online and streamed LIVE event this year (the full agenda), beginning Thursday, Aug. 27 at 8 a.m. CDT. View the symposium on the Kansas City Fed’s YouTube channel. Papers and other materials are posted on the Kansas City Fed’s website.
Aug 18: S&P 500 +0.23%, DJIA -0.24%, NASDAQ Composite +0.73% S&P 500 hits All-Time Record High Close, marking the fastest recovery in history.
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| Aug 18: The V-Shaped Recovery New Housing Starts Data |
A V-Shaped Recovery in the Making:
Google searches for “buy a house” are at an all-time high back to 2004. The #COVID19 Crisis has pulled forward housing demand. This is a classic early cycle setup to kickstart the economy. Read our full analysis here: https://t.co/jKJynF5jlC $SPY $IVV $QQQ pic.twitter.com/j6LMSnq3ec— DataTrek Research (@DataTrekMB) August 14, 2020
For the Month of July: S&P 500 +5.5%, DJIA +2.4%, NASDAQ Comp +6.8%:
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| NASDAQ Composite (INDEXNASDAQ: .IXIC) |
Markets are trading on economic fundamentals, says Goldman Sachs's Mossavar-Rahmani (video) 2020 July 10: Sharmin Mossavar-Rahmani, Goldman Sachs Wealth Management CIO, makes the case for staying invested in equities. She contends that while the Fed's low interest rates support equity markets, they are not overvalued. She joins David Westin with her insight on "Bloomberg Wall Street Week."
2020 June: S&P 500 has its best quarter since Q4 1998, S&P 500 UP +18%, the DJIA UP +15.6%, NASDAQ Composite UP +29.4%.
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| S&P 500 Index (INDEXSP: .INX) |
Jun 22-24: Bloomberg Invest Global Virtual Event. Speakers include Stephen A. Schwarzman, Chairman, CEO and Co-Founder, Blackstone; Jim Chanos, President and Founder, Kynikos Associates; Manny Roman, CEO, PIMCO; Bill Ackman, Founder & CEO, Pershing Square Management; Steven Mnuchin, US Treasury Secretary; Bob Prince, Co-Chief Investment Officer, Bridgewater Associates; Jon Stein, CEO & Founder, Betterment.
A V-Shaped Recovery: Cathie Wood, ARK Invest video (May 29, 2020) at 9:04: "I've been through a lot of recessions and by definition a v-shaped recovery is caused because inventories are liquidating and not keeping up with consumption. We think that's what's going to be happening during the next few months." CBO forecasts Q3 GDP growth UP +21.5% (annual rate). CBO forecast graphic:
2020 Mar 15 FOMC lowers fed funds target interest rate: "... the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals ..."--FOMC statement.
Feb 20-28: COVID-19 Coronavirus Spooks Stocks. CDC Risk Assessment & WHO Updates, S&P 500 Index DOWN 13%:
2019 Best Year for US Stocks Since 2013, S&P 500 UP 28.9%, Dow (DJIA) UP 22.3%, NASDAQ UP 35.2%. The S&P 500 Index tends to produce an annual return of 11.2% after a year in which it climbs at least 20%. Why the S&P 500 Has Beaten Other Indices over the Past Decade:
US 2020: ‘Bond King’ Jeffrey Gundlach says a recession is ‘very unlikely’ in 2020.
Brexit 2020: This Time is Different, Global Elite Show No Signs Of Wanting To Stop Brexit.
EU 2020: 'The Bottom Is Not In' For Europe's Struggling Economy says El-Erian.
Survivorship Bias: "Most businesses fail. Most people do not become rich or famous. Most leaps of faith go wrong. It does not mean we should not try, just that we should be realistic with our understanding of reality." "A powerful algorithm for happiness is to be wealthy but anonymous"--Scott Galloway. Remember: Most 'News' Today is Noise, False Narratives or Disinformation.
Feb 20-28: COVID-19 Coronavirus Spooks Stocks. CDC Risk Assessment & WHO Updates, S&P 500 Index DOWN 13%:
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| S&P 500 Index DOWN 13% Feb 20-28 |
2020 Feb 28: Federal Reserve Chair says coronavirus is an "evolving risk to economic activity" and Fed ready to take action if necessary.
Year 2019's 13 Worst #FAILs in Tech: 13. Samsung Galaxy Fold;12. Facebook privacy & Libra; 11. Apple FaceTime bug & butterfly keyboard; 10. Amazon Ring & local police; 9. Huawei in US; 8. Uber IPO; 7. Amazon HQ2;6. Airbnb bedbugs; 5. Vaping; 4. Jeff Bezos, Amazon CEO & Washington Post owner's mid-life crisis: divorce tweet, dick pics, sexts to skanky girlfriend(s); 3. ICANN, Internet Society & Ethos Capital re: .ORG; 2. WeWork, need we say more? #1. The Worst of the Worst: Boeing 737 MAX. Congrats to Google, Microsoft, and Elon Musk, for missing this year's list of "13 Worst #FAILs in Tech." See also Boeing CEO Finally Fired.
2019 Best Year for US Stocks Since 2013, S&P 500 UP 28.9%, Dow (DJIA) UP 22.3%, NASDAQ UP 35.2%. The S&P 500 Index tends to produce an annual return of 11.2% after a year in which it climbs at least 20%. Why the S&P 500 Has Beaten Other Indices over the Past Decade:
Three 'experts' who got the 2019 Stock Market Totally Wrong.3/3 ...The lesson: innovative disruption at scale in conjunction with profitability drives equity returns. The S&P 500 has beaten the Russell, EAFE & EM equities handily over the last decade because it houses more global disruptors than those other indices. $SPY $XLK $EEM $EFA— DataTrek Research (@DataTrekMB) December 30, 2019
Predictions for 2020: Oil and gas prices will remain range-bound in 2020. See also 5 Biggest Threats To Oil & Gas In 2020 and IEA: An Oil Glut Is Inevitable In 2020.Remember how everyone was worried about an inverted yield curve forecasting a global economic contraction over the summer? Fun fact: the US has NEVER seen a recession (back to 1970) w/out oil prices 1st rising by +90% over a year. Full analysis here: https://t.co/V2MKAhpB8b $SPY— DataTrek Research (@DataTrekMB) December 23, 2019
US 2020: ‘Bond King’ Jeffrey Gundlach says a recession is ‘very unlikely’ in 2020.
Brexit 2020: This Time is Different, Global Elite Show No Signs Of Wanting To Stop Brexit.
EU 2020: 'The Bottom Is Not In' For Europe's Struggling Economy says El-Erian.
Inverted Yield Curve T10yr/2yr: Aug 14, 2019: Former Federal Reserve Chair Janet Yellen said the markets may be wrong this time in trusting the yield curve inversion as a recession indicator. "Historically, it has been a pretty good signal of recession, and I think that's why markets pay attention to it, but I would really urge that on this occasion it may be a less good signal," Yellen said, adding, "The reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long-term yields." Aug 15: Mohamed El-Erian agreed with Yellen (CNBC video). See also Goldman Sachs Oct 7, 2019: 'US Is Not Close To Recession' - Economic Run 'Not Over.'
Economic & Earnings Links:
Markets | cnbc.com | Stock Exchange Trading Hours (24 hour format / local time):
DISCLAIMER- TSE (Tokyo Stock Exchange) 09:00-11:30 | 12:30-15:00
- HKE (Hong Kong Stock Exchange) 09:30-16:00
- LSE (London Stock Exchange) 08:00-16:30
- NASDAQ and NYSE (New York Stock Exchange) 09:30-16:00
Twitter: @ReutersTech @techreview @fastFT @technology @markets @business @WSJ @NAR
How to Read Financial News Redux: Process Determines Priorities & Understanding Consensus & Separate the Narrative from the Noise.
Other stock & investor links:
Profits explained | Finance Decoded FT.com video: Jonathan Guthrie explains how companies calculate their profit, what investors should be wary of and the different measures used to gauge how a company is really performing (video published Feb 17, 2016).
Peter Lynch on investing:
Common Terms: Infographic: Here's 40 Stock Market Terms That Every Beginner Should Know | visualcapitalist.com
Operating Profits
Revenue is the income (before deducting expenses) that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Profits or net income generally imply total revenue minus total expenses in a given period. Source: Wikipedia
Risk Assets generally refer to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate and currencies.
Market liquidity | Wikipedia.org: "In business, economics or investment, market liquidity is a market's ability to purchase or sell an asset without causing drastic change in the asset's price. Equivalently, an asset's market liquidity (or simply "an asset's liquidity") describes the asset's ability to sell quickly without having to reduce its price to a significant degree. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. In a liquid market, the trade-off is mild: selling quickly will not reduce the price much. In a relatively illiquid market, selling it quickly will require cutting its price by some amount. Money, or cash, is the most liquid asset, because it can be "sold" for goods and services instantly with no loss of value. There is no wait for a suitable buyer of the cash. There is no trade-off between speed and value. It can be used immediately to perform economic actions like buying, selling, or paying debt, meeting immediate wants and needs."
Fungibility | Wikipedia.org: "Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place."
How to Read Financial News Redux: Process Determines Priorities & Understanding Consensus & Separate the Narrative from the Noise.
Other stock & investor links:
- 40 Stock Market Terms That Every Beginner Should Know--visualcapitalist.com.
- Bloomberg TV US LIVE / Asia LIVE / Europe LIVE; Bloomberg Radio.
- SHCOMP - Shanghai Composite Index (Bloomberg) / SHANGHAI Composite (Google)
- SZSE Component Index (Google)
- NYSE: BRK.B Berkshire Hathaway Inc. Class B
SEC.gov | Company Search Page; see also Full Text Search (advanced)
SEC.gov | How Investigations Work - The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them. One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.
SEC.gov | How Investigations Work - The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them. One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.
Profits explained | Finance Decoded FT.com video: Jonathan Guthrie explains how companies calculate their profit, what investors should be wary of and the different measures used to gauge how a company is really performing (video published Feb 17, 2016).
Peter Lynch on investing:
Still following the market at age 71--(he has no plans to abandon the stock market for other leisure pursuits, “It’s a fun exercise, beats the hell out of golf" ... Lynch spends time calling companies, listening to earnings calls and reading transcripts)--investor Peter Lynch explains his philosophy this way: Use your specialized knowledge to home in on stocks you can analyze, study them and then decide if they’re worth owning. The best way to invest is to look at companies competing in the field where you work ... "If you’re in the steel industry and it ever turns around, you’ll see it before I do.” The popular-wisdom version of his ideology is mistakenly often cited as “invest in what you know,” which leaves out the role of serious fundamental stock research. “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.” Lynch’s advice for small investors: Picking individual stocks is hard even for the professionals--"if you can’t understand the balance sheet, you probably shouldn’t own it.” Source: Peter Lynch, 25 Years Later: It’s Not Just ‘Invest in What You Know’ - WSJ Dec. 6, 2015
Where Markets Fail: Visible Hands | CFA Institute Enterprising Investor
Memos from Howard Marks
Shortcuts to Factor Investing 101 | blogs.cfainstitute.org: "Smart beta and factor investing are just fashionable marketing labels for a wide range of risk-based approaches that sit somewhere beyond active and passive investment management but possess attributes of both. In essence, smart beta and factor investing combine the disciplined rules-based approach of market-cap weighted passive funds with the discretionary selection of whichever chosen factors or index series those who use them hope to replicate."
See also on Domain Mondo: Investing, Jack Bogle, Warren Buffett, S&P 500 Index, US, China
Where Markets Fail: Visible Hands | CFA Institute Enterprising Investor
Memos from Howard Marks
Shortcuts to Factor Investing 101 | blogs.cfainstitute.org: "Smart beta and factor investing are just fashionable marketing labels for a wide range of risk-based approaches that sit somewhere beyond active and passive investment management but possess attributes of both. In essence, smart beta and factor investing combine the disciplined rules-based approach of market-cap weighted passive funds with the discretionary selection of whichever chosen factors or index series those who use them hope to replicate."
Common Terms: Infographic: Here's 40 Stock Market Terms That Every Beginner Should Know | visualcapitalist.com
Operating Profits
"The basis for all sustainable shareholder returns is operating profits, not, repeat NOT revenue. Profit is the source of all future dividends, it is the basis for increased book value via retained earnings. The art of investing involves buying future levels of profitability at a significantly low price to make the whole venture worthwhile. Thus, one of the first things we look at when considering an investment is the level of operating profits the firm manages to generate relative to the capital provided by owners and creditors ..."--Web.com And The Problem With Growth Investing | Seeking Alpha, Nov 8, 2015.
"Accounting games are also making the profits reported by companies much less trustworthy which, in turn, means P/E ratios are even more out of whack. Ciesielski, who writes The Analyst’s Accounting Observer ... [says] accounting manipulation has become very widespread and companies are using gimmicks to make profits look better. Company executives ...“all have a huge incentive to puff their numbers”... much of their compensation [is] tied to their stock’s performance. ... companies used to report profits according to Generally Accepted Accounting Principles — called GAAP for short. That meant all companies had to follow certain rules so that investors were able to compare apples to apples ... companies are now using creative accounting. GAAP has fallen between the cracks. The use of so-called “extraordinary items” and “non-cash charges” has made corporate earnings reports incomprehensible. “Non-GAAP earnings are more akin to anarchy,” says Ciesielski. ... How many companies are pulling these accounting tricks? Ciesielski says that, in 2009, 232 of the 500 companies in the S&P index were using tricks — thus straying from GAAP. Last year, 334 companies were doing so. Hundreds of billions in extra corporate profits were being reported simply by razzle-dazzle. It’s not that profits were actually higher — they were just made to look so." source: The secret stock market accounting trick | New York Post
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization - essentially net income with interest, taxes, depreciation, and amortization added. Often used to analyze and compare profitability between companies and industries, minimizing effects of financing and accounting decisions.
"Accounting games are also making the profits reported by companies much less trustworthy which, in turn, means P/E ratios are even more out of whack. Ciesielski, who writes The Analyst’s Accounting Observer ... [says] accounting manipulation has become very widespread and companies are using gimmicks to make profits look better. Company executives ...“all have a huge incentive to puff their numbers”... much of their compensation [is] tied to their stock’s performance. ... companies used to report profits according to Generally Accepted Accounting Principles — called GAAP for short. That meant all companies had to follow certain rules so that investors were able to compare apples to apples ... companies are now using creative accounting. GAAP has fallen between the cracks. The use of so-called “extraordinary items” and “non-cash charges” has made corporate earnings reports incomprehensible. “Non-GAAP earnings are more akin to anarchy,” says Ciesielski. ... How many companies are pulling these accounting tricks? Ciesielski says that, in 2009, 232 of the 500 companies in the S&P index were using tricks — thus straying from GAAP. Last year, 334 companies were doing so. Hundreds of billions in extra corporate profits were being reported simply by razzle-dazzle. It’s not that profits were actually higher — they were just made to look so." source: The secret stock market accounting trick | New York Post
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization - essentially net income with interest, taxes, depreciation, and amortization added. Often used to analyze and compare profitability between companies and industries, minimizing effects of financing and accounting decisions.
Revenue is the income (before deducting expenses) that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Profits or net income generally imply total revenue minus total expenses in a given period. Source: Wikipedia
Risk Assets generally refer to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate and currencies.
Market liquidity | Wikipedia.org: "In business, economics or investment, market liquidity is a market's ability to purchase or sell an asset without causing drastic change in the asset's price. Equivalently, an asset's market liquidity (or simply "an asset's liquidity") describes the asset's ability to sell quickly without having to reduce its price to a significant degree. Liquidity is about how big the trade-off is between the speed of the sale and the price it can be sold for. In a liquid market, the trade-off is mild: selling quickly will not reduce the price much. In a relatively illiquid market, selling it quickly will require cutting its price by some amount. Money, or cash, is the most liquid asset, because it can be "sold" for goods and services instantly with no loss of value. There is no wait for a suitable buyer of the cash. There is no trade-off between speed and value. It can be used immediately to perform economic actions like buying, selling, or paying debt, meeting immediate wants and needs."
Fungibility | Wikipedia.org: "Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place."
- Prior entries in archive: Markets & Stocks Archive (pdf).
