This article originally appeared on Iknowfirst.com I have been a Plug Power (PLUG) bear for quite some time now. The stock has declined considerably since I first covered it. Missing estimates, history of unprofitability and overpromising results has been the primary reasons why I have recommended investors to sell/short Plug Power over the years. And as you can see from the image below, my bearish stance on Plug Power has yielded over 34% returns. (Source: TipRanks.com) Why I have been bearish on Plug Power I have always advised investors to short companies that have a track record of non-profitability. I have previously recommended shorting...
There’s a reason investors have blindly trusted Wall Street’s “buy the dips” mantra since 2009. In fact… there are 2.3 trillion reasons. That’s because since 2009 U.S. companies spent more than $2.3 trillion buying back their own shares, according to a report by Aranca Investment Research Services. All that buying acted as a floor for stocks and launched the major indices to new heights. But now, after watching stocks fall off the “Wall of Worry” this year, instead of climbing it, investors who simply bought the dip without any strategy are praying new buyback programs will start lifting stocks. Too...
The Walt Disney Company (DIS) reported earnings yesterday and reaction hasn’t been great despite posting descent numbers. On the chart there are two technical developments: one good and one bad. Which way it decides to go is anyone’s guess. But I’ll lay out the two scenarios for you. The Good: The rising trend-line that goes back to the Spring of 2014. Right now DIS is trying to bounce off of this level. It provides a nice risk/reward setup for the stock going forward and could be worth playing here. The Bad: A massive double top formed over the past year that has confirmed this week on the weekly chart. If this chart ...
The move in Gold over the past week or so has captured a lot of attention and is rather exciting as it is the first real evidence of an impending behavioral change in the precious metals complex. I say this because Gold has rallied sharply many times during the last four years, but has always failed to surpass a previous swing point high. The move on Monday finally did that albeit only briefly. Daily closes are usually what matters most in commodities, so I would really like to see a settlement above 1191 to solidify a more meaningful shift. However, time seems to be working against the yellow metal in the near-term as a confluence of various...
The stock market is really a by-product of tremendous forces at work primarily in the currency and commodity markets and on Tuesday, traders were very uncertain given this is Janet Yellen’s week. The Federal Reserve chairwoman goes up to Capitol Hill to deliver the Fed’s semiannual monetary policy report to the House Financial Services Committee on Wednesday and Senate Banking Committeeon Thursday. The Fed has recently announced that its bank stress tests for 2016 will include a period of negative yields on short-term Treasuries as part of its “severely adverse scenario”. So all ears will be on what Janet Yellen has to say as this...
Fed chair Janet Yellen keeps repeating the mantra “inflation expectations are well anchored”. They’re not, and I can prove it with a pair of chart on 5-year and 10-year “breakeven” interest rates. The breakeven rate is the difference in yield between inflation-protected and nominal debt of the same maturity. Falling breakeven rates indicate decreasing expectations of future inflation. 5-Year and 10-Year Breakeven Rates 2012-Present 5-Year and 10-Year Breakeven Rates 2006-Present What Me Worry? Earlier today, MarketWatch economic director Steve Goldstein posted a chart of breakeven rates and inflation swaps with the headline Here’...
Yep, we have such clear warning signs of imminent disaster. I should probably also point out that the interest burden measured as a share of GDP (net of money refunded from the Fed) is at the lowest level since before World War II. You can see we are imposing a terrible burden on our children. At least the Post is honest and says that its deficit reduction means cutting Social Security and Medicare. Oh well, here on Planet Earth low interest rates and low inflation are a very good market signal that the economy could use much more demand (i.e. larger budget deficits). The Post actually seems to support this, but tells us about the Congressi...
The ‘holy grail’ of dividend growth investing is to find businesses that offer: Growth potential High dividend yields Consistent and safe operations This article takes a look at 4 businesses that have: High dividend yields above 4% Above average total return potential Consistent operations backed by a long dividend history. This combination is difficult to find in today’s low interest rate environment.Low interest rates increase the share prices of high dividend stocks, reducing their yields. Source: Multpl.com You can see the effect of rising interest rates on the S&P 500’s dividend yield. Source: Multpl.com The trade off b...
Photo Credit: Joe Lazarus Twitter, Inc. (TWTR) Information Technology – Information, Software & Services | Reports February 10, After Market Closes. Twitter (TWTR) appears to be a company in search of their identity. Despite coming off two straight quarters of growth, share prices have taken a severe beating. This quarter the Estimize consensus is calling for EPS of $.013, just one penny higher than Wall Street, and revenues of $711.88 million, roughly $2.64M ahead of the Street. Compared to Q4 2014, this represents a projected YoY increase in EPS and revenue of 5% and 48%, respectively. That said, investors and users have lost fai...
“The Fed doesn’t have a clue!” – I allege that not only because the Fed appears to admit as much (more on that in a bit), but also because my own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower – think what happened in 2000. What are investors to do, and when will we reach bottom? To understand what’s unfolding we need to understand how the Fed is looking at the markets, and how the markets are looking at the Fed. The Fed and the Markets In our analysis, policies at the Federal Reserve Open Market Committee (FOMC...