July 31, 2013

How might the world look on New Year's eve? A 2013 midyear outlook

A year ago fears grew rampant that Washington politics and the automatic termination of the Bush era tax cuts would sink the US economic expansion. Europe’s woes and China’s slowdown provided additional anxiety for investors. However, the expansion continued. The possible crises were at least temporarily avoided, and the business cycle kept moving on. One year later the growth in earnings from publicly traded companies is rising. It seems that the price trend in the market is closely in line with the business cycle, not ahead of it.

July 29, 2013

A calm and cautious step back from rising markets and weaker earnings

Third-quarter earnings reporting season for US companies is half complete. The results are mixed and in some cases worrisome. It is fair to say that Wall Street expected progress to flatten out. Analysts held low estimates for this reporting season. Certainly no one thought we would continue to see the robust earnings and margin increases that characterized the US exit from recession in 2010 and 2011. This mixed bag of results is to be viewed against an S&P 500 index that is up 12 of the last 13 days, up 18% year to date and up 28% for the last 12 months. I think it is time to take a breather and gather some more information. Where are we going in Q3, Q4 and 2014?

July 26, 2013

Sharing insights globally: Swanson on CNBC Asia

Chief investment strategist James Swanson appeared on CNBC Asia on 11 July to discuss the impact of a rising rate environment on the financial sector of the US stock market as well as to give his overall review of the US market and economy.

July 22, 2013

The four keys to interpreting earnings season in Q2 2013

Earnings season for S&P 500-listed companies is upon us. Over the next three weeks earnings reports will be released along with the usual headlines about companies that miss and beat expectations. But what matters most in all of this?

Individual announcements can make or break a company's stock for short term investors and traders. Research analysts with longer-term perspectives need to confirm results that match their expectations of the company’s performance and management's guidance.

Here are the four keys to analyzing the direction of the market based on earnings information.

July 16, 2013

Nerves of steel

I'm traveling this day in Traverse City, Michigan. Conversations turn to the market and immediately Egypt comes up: "Shouldn't investors be afraid of Egypt?" Alternatively, I am asked at a dinner party, "Why aren't you invested in thorium?" "Thorium?” I ask.

These sorts of issues, driven by the media, come up every day in the world of investing. As an investor I try to steer a steady course based on facts and relative judgments having to do with what really matters in the world of investing. The strength and durability of the business cycle matters. Cash flows and spending power matter, not what fills the media time slots.