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The Definitive Investment/Finance/Economics Thread

jebac

TRIBE Member
Alright, I know there are a few investment/finance/economics threads floating around on tribe but I find the information is scattered and not up to date. I think an investment/finance/economics thread would be very useful. Hopefully people can post interesting articles, thoughts, explanations, and whatever questions they might have. So for anyone that has any questions regarding the FOREX market or DCF (Discounted Cash Flow) analysis, post them here and I'm sure someone will help you!

-jebac

ps: It's a great way to network and meet intelligent and capable people...
 
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jebac

TRIBE Member
From Yahoo Finance:

AP
Stocks Plummet on Subprime Lending Woes
Tuesday March 13, 11:24 pm ET
By Madlen Read, AP Business Writer
Stocks Tumble on Mounting Concerns About Subprime Lenders, Slowing Retail Sales

NEW YORK (AP) -- Stocks plunged Tuesday, driving the Dow Jones industrials down more than 240 points to their second-biggest drop in almost four years, as troubles piled up for subprime lenders.

Investors, bracing for a wilting economy, fled the already deflated subprime mortgage sector on more news that lenders New Century Financial Corp., Accredited Home Lenders Holding Co. and General Motors Acceptance Corp.'s residential unit are facing financial problems. The Mortgage Bankers Association bolstered the belief that the struggles are widespread after it said new foreclosures surged to an all-time high in the last quarter of 2006.

All three major stock indexes were knocked down about 2 percent.

Japanese stocks followed suit, and the benchmark Nikkei 225 index fell nearly 3 percent Wednesday morning in Tokyo.

"The market's still jittery, and they're starting to get full-blown concerns over a bleed in the larger subprime mortgage market," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds.

Subprime lenders provide mortgages to people with poor credit. Though they are a relatively small part of the U.S. economy, their difficulties raise larger concerns about the housing market, which until its slowdown in recent years was a big source of money for consumers. That, coupled with the Commerce Department's report Tuesday that U.S. retailers eked out a meager 0.1 percent rise in sales last month, led Wall Street to reconsider whether Americans' buying power will withstand an economic slowdown.

Tuesday's selloff was accentuated by options expiring soon and by volatility that has increased since the market's big plunge on Feb. 27 -- a 416-point drop in the Dow that was caused partially by the escalating distress among subprime lenders.

The Dow fell 242.66, or 1.97 percent, to 12,075.96. On March 24, 2003, the index dropped 307 points when U.S. casualties began mounting in Iraq.

The blue chip index is now down about 710 points, more than 5 percent, from its record close reached Feb. 20. Many market watchers suspect that the market's correction is not over.

The Dow is still above the low for the year of 12,050.41 reached March 5 and has yet to slip below the 12,000 level, which it reached for the first time last October.

Broader stock indicators also fell by their largest amounts in two weeks. The Standard & Poor's 500 index fell 28.65, or 2.04 percent, to 1,377.95, and the Nasdaq composite index slid 51.72, or 2.15 percent, to 2,350.57.

Consolidated volume on the New York Stock Exchange, where declining issues outnumbered advancers by 5 to 1, was high at 3.49 billion shares -- more than the 2.62 billion shares traded a day earlier, but lower than the 4.56 billion shares traded on Feb. 27, when the Dow took its largest plunge since Sept. 17, 2001.

Trading collars were triggered Tuesday afternoon when the New York Stock Exchange Composite index lost more than 180 points. The collars put a chokehold on certain orders, forbidding transactions that capitalize on discrepancies in prices.

Subprime lending jitters and sluggish retail sales drove up bond prices. The yield on the benchmark 10-year Treasury note fell to 4.50 percent from 4.56 percent late Monday.

Gold prices fell, and the dollar was lower against most major currencies. A drop in the dollar versus the yen renewed anxiety about traders unwinding their yen "carry trades," or taking money out of high-yielding dollar assets bought with the low-yielding yen.

On the Tokyo Stock Exchange, the Nikkei fell 512.04 points, or 2.98 percent, to 16,666.80 points Wednesday morning. The index had fallen 0.66 percent to finish at 17,178.84 points Tuesday.

Foreign investors and individual players who bought up stocks during the market's recent rally led the selling in Tokyo, traders said.

The subprime worries have been mounting for weeks now, but came to a head when the New York Stock Exchange took steps to delist shares of New Century, which said Tuesday that the Securities and Exchange Commission would be probing accounting errors that inflated its loan portfolio.

"Investors are poking around to see how much rotted wood there is here," said Jack Ablin, chief investment officer for Harris Private Bank. "It looks like the notion was subprime was contained, and now we're starting to see that maybe this problem has moved into other areas of the market. That's causing investors great concern."

Accredited Home contributed to the anxiety after it said it is in need of cash. Its shares plunged $7.43, or 65 percent, to $3.97.

Wall Street sold off further when the Mortgage Bankers Association's quarterly report on the mortgage market seemed to confirm investors' worries that the entire sector is floundering and could weaken further: not only did new foreclosures hit a record high in the fourth quarter of last year, but late mortgage payments soared to a 3 1/2-year high.

Late in the session, General Motors Acceptance Corp. -- General Motors Corp.'s part-owned financing arm -- reported that its fourth-quarter profit rose, but struggles in its Residential Capital LLC unit were eating into earnings. That news gave investors extra motivation to sell.

"The fear index is rising," said Steven Cochrane, senior managing director for Moody's Economy.com. "(Subprime mortgages) are our No. 1 concern right now."

That anxiety hit stocks of homebuilders, as lending obstacles could further cripple the lagging housing market. D.R. Horton Inc. fell 86 cents, or 3.7 percent, to $22.31; Centex Corp. lost $2.15, or 4.8 percent, to $42.76; and Toll Brothers Inc. dropped 67 cents, or 2.4 percent, to $27.34.

Investors trying to gauge how far problems in the subprime sector have spread pounced on comments from Goldman Sachs Group Inc. The investment bank said that while the subprime sector showed "significant weakness," the broader credit environment "remained strong." Goldman Sachs fell $3.57 to $199.03, despite record first-quarter profit thanks to strong revenue from trading and investment banking.

Government data on Tuesday suggested that consumer spending might be getting crimped. The Commerce Department said sales at U.S. retailers rose 0.1 percent in February as wintry weather in much of the country kept shoppers away from stores. Investors had expected an increase of 0.3 percent from January.

"I think a big question mark on this is how much of this is weather-related," said Rob Lutts, chief investment officer at Cabot Money Management. "We had two or three days during the month which knocked out activity. ... I think it is causing a little bit of alarm short-term."

Several retailers stumbled following the Commerce Department's report. Federated Department Stores Inc., parent of Macy's and Bloomingdale's, fell 85 cents to $44.09; Wal-Mart Stores Inc. slid $1.08, or 2.3 percent, to $46.18; and Target Corp. fell $1.76, or 2.8 percent, to $60.47.

Traders now await the producer and consumer price indexes, scheduled to be released Thursday and Friday, respectively. The two inflation gauges should give investors a better idea of whether costs are escalating too fast, and if the Federal Reserve might give consumers some relief by lowering interest rates later in the year.

Of the Dow's 30 blue chip stocks, the only gainer was AT&T Corp., which rose 20 cents to $37.26.

The Russell 2000 index of smaller companies fell 19.88, or 2.52 percent, to 769.12.

Overseas, Britain's FTSE 100 fell 1.16 percent, Germany's DAX index fell 1.36 percent, and France's CAC-40 fell 1.15 percent.

Light, sweet crude fell 98 cents to settle at $57.93 per barrel on the New York Mercantile Exchange.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com
 

jebac

TRIBE Member
Blue Chip Definition

Here is a wikipedia definition of a blue-chip company. I'm using this definition since it essentially contains all the info I'd write about blue-chips and therefore saves me time :p.

BLUE-CHIP DEFINITION

A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. Most blue chip stocks pay regular dividends, even when business is faring worse than usual. They are valued by investors seeking relative safety and stability, though prices per share are usually high. Typically, such stocks are perceived to offer reliable returns, low yield, and low risk. Many blue chips are components of popular indices, such as the Dow Jones Industrial Average and the S&P 500.

Alternately, blue chip stocks are sometimes defined as companies whose stocks have large market capitalization values (for example, over $1 billion.)

The term comes from blue-coloured poker chips, which are typically the most valuable. Examples are Royal Dutch Shell (petroleum), The Coca-Cola Company (food) and IBM (information technology).
 

jebac

TRIBE Member
Also, does everyone know what YIELD is?

Anyone? Feel free to put your hand up if you'd like a definition.

-jebac
 

AshG

Member
on a related note, what's the easiest way to buy very low management fee stocks and bonds.

to start i just want to, well start. index funds i suppose, that sort of thing, until i bring myself up to speed to the point where i'm more comfortable dealing with specifics.

i've got a mixed bag of shit already, managed by a broker, that does well, but i'd also like to do some trading myself. just for shits really at the moment.
 
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jebac

TRIBE Member
Hehe, I can't help you out with this one since I don't do any trading myself. I'm sure someone here will be able to tell you who has the lowest trading fees...

-jebac
 

judge wopner

TRIBE Member
check out ETF's, easy way to buy shares in an entire sector
at lower fee's than a mutual fund:

http://www.ishares.ca/product_info/index.do

theres over a dozen for canadian equities so you can build a fully diversified portfolio with different ETF's.

they trade like shares on the TSX, and have counterparts in the US and everwhere else.

if youre planning on setting up a regular RRSP type account and dont plan on active trading, then commissions shouldnt be too big of a deal, use what is most comfortable and has customer service to guide you through.

if you do want to do some trading,

Interactive Brokers for non-RRSP accounts is the best platform ive ever seen (but i don know what professional traders use) and the comissions are low.

E-trade is cheap and the platform is pretty easy, especially if you are an active trader.

ones like Disnat direct are direct access and apparently it makes it faster and more efficient than conventional platforms like the banks. never used it but commissions are dirt cheap for active traders. my firewall at work blocks it.
 

Ms. Fit

TRIBE Member
i can't deal with buying stocks - only ones from my work's parent company and that's cuz it's a good deal for employees. i simply don't have the will, time or discipline to follow stocks.
 

kuba

TRIBE Member
AshG said:
on a related note, what's the easiest way to buy very low management fee stocks and bonds.

to start i just want to, well start. index funds i suppose, that sort of thing, until i bring myself up to speed to the point where i'm more comfortable dealing with specifics.

i've got a mixed bag of shit already, managed by a broker, that does well, but i'd also like to do some trading myself. just for shits really at the moment.

wopner said it best. Open a discount brokerage account (usually best at your branch b/c of cash transfer ease), and buy ETFs, or Spiders, which are available in many/most sectors.

For example, the other day I was at a presentation by Ben Tal from CIBC and he emphasized water as a commodity going forward. Look up "water index" on google and you find PHO (not the soup), which is the [SIZE=-1]PowerShares Water Resources ETF. This trades stocks in the Palisades Water Index on the AMEX exchange (http://en.wikipedia.org/wiki/Palisades_Water_Index) and lets you follow/invest directly in that sector.

Here is a list of all ETFs in the US market: http://finance.yahoo.com/etf/browser/mkt

QQQ on Nasdaq is possibly one of th emost heavily-traded ETF/Spider, as it's linked to the Nasdaq. http://www.nasdaq.com/aspxcontent/qqqq/default.aspx

But I'm not sure what you mean by low-fee stocks? To buy/sell a stock there is usually a fixed cost, something like $20 per trade. But then you don't actively pay a fee to hold these stocks, i.e. an MER (mangt expense ratio)



[/SIZE]
 
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judge wopner

TRIBE Member
you can always involve yourself in needlessly complicated technical analysis thats doesnt always work, this says screaming buy.... :D

2jfbywo.jpg
 

jebac

TRIBE Member
AdRiaN said:
All I can say is: OMGFOREXDCFIPOCFABBQ!!!

And that, ladies and gentlemen, are your tax dollars hard at work!

-jebac

ps: Adrian, IRT to what you were asking me over PM earlier, I'm pretty sure you CAN'T expense alcohol fueled trips to the rippers where you doused your private dancers, dancers for money, with alcohol while yelling "YIPPIE KAI-EH!!!"... thats CAN'T... CAN NOT

-jebac
 
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jebac

TRIBE Member
i didnt want to write coke fueled ripper trips because its a public message board but then i realized that your bosses are probably too square to even know what electronic music is

so no, you cant expense those either, but i hear you have a great cell phone plan!

-jebac
 
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jebac

TRIBE Member
Market Bounces Back - Blamed on Buyers

Ok so back on topic... from Yahoo Finance Today:

AP
Dow Rebounds After Slipping Below 12,000
Wednesday March 14, 6:54 pm ET
By Tim Paradis, AP Business Writer
Dow Rebounds After Briefly Tumbling Below 12,000 As Investors Worry About Mortgages

NEW YORK (AP) -- Wall Street gyrated and then steadied itself Wednesday, closing with a respectable advance although the Dow Jones industrials fell as much as 136 points and briefly dropped below the 12,000 mark before recovering.

Stocks bounced back and forth a day after concerns about faltering subprime mortgage lenders sparked a broad selloff. H&R Block Inc. had added to Wall Street's uneasiness by announcing after the closing bell Tuesday its fiscal third-quarter losses would rise because of a $29 million writedown at its mortgage arm.

The anxiety over mortgage lenders, particularly the subprime lenders that make loans to people with poor credit, pushed the Dow down by more than 240 points Tuesday, its second-biggest drop in nearly four years. Such concerns jostled stocks for much of Wednesday's session.

"I think the market got below 12,000 and buyers came in," said Todd Leone, managing director of equity trading at Cowen & Co.

The Dow rose 57.44, or 0.48 percent, to 12,133.40.

The Dow first climbed above the 12,000 level on Oct. 18, after a meandering, 7 1/2 year journey from the 11,000 mark. During that time, Wall Street dealt with the dot-com bust, recession and the aftermath of the 2001 terror attacks. Tuesday's drop echoed a 416-point drop in the Dow seen two weeks ago that began in part after a nearly 9 percent drop in stocks in Shanghai and amid concerns about subprime mortgages.

Broader stock indicators also rose Wednesday. The Standard & Poor's 500 index advanced 9.22, or 0.67 percent, to 1,387.17, and the Nasdaq composite index rose 21.17, or 0.90 percent, to 2,371.74.

Bonds fell as stocks bandied about; the yield on the benchmark 10-year Treasury note rose to 4.52 percent from 4.50 percent late Tuesday. Gold prices fell.

Light sweet crude settled up 23 cents at $58.16 per barrel on the New York Mercantile Exchange.

"I think people right now don't know what to make of this market," said Larry Peruzzi, senior equity trader at The Boston Company Asset Management. "You look like a hero right now if you bought when the Dow was down 120 points and if you sold you look like a goat."

Peruzzi said stocks recovered after indexes neared technical levels and that the higher close in crude prices lent a boost to energy stocks. Exxon Mobil Inc. rose $1.11 to $71.02, while ConocoPhillips rose $1.32, or 2 percent, to $67.91.

After Tuesday's big decline, the market appeared to have been awaiting further economic data -- notably Thursday's producer price index and Friday's consumer price index -- for signals about the economy's health and whether an interest rate cut might be in the offing. Lower interest rates would make access to capital cheaper and perhaps inject strength in the housing market.

Wall Street's turbulence came as stocks in Europe closed sharply lower, apparently seeing little room for optimism U.S. markets would rebound. Britain's FTSE 100 fell 2.61 percent, Germany's DAX index lost 2.66 percent, and France's CAC-40 fell 2.52 percent. Japan's Nikkei stock average closed down 2.92 percent, while Hong Kong's Hang Sang index fell 2.57 percent and the sometimes volatile Shanghai Composite Index fell 1.97 percent.

The dollar, which was mixed against other major currencies, rose against the yen. Some observers have fingered the ascendent yen with contributing to the volatility seen in recent weeks on Wall Street. A rise in the yen against the dollar stirred concern of a reduction in the so-called yen carry trade, which occurs when investors use the yen to acquire higher-yielding assets elsewhere.

Following Tuesday's sobering declines in stocks, investors appeared to find little reassurance in a General Motors Corp. report that it turned a profit for the fourth quarter, its first since the first quarter of 2006. GM, which fell 26 cents to $30.25, benefited from a big gain from the sale of about half its stake in its General Motors Acceptance Corp. financing arm.

But trouble at GMAC's Residential Capital LLC real-estate financing business added to investor concern Tuesday after ResCap said it has struggled with a slower pace of loan originations and a further erosion in its subprime business.

H&R Block, the nation's largest tax preparer, said it would delay filing its annual report and that the reduced value of its mortgage business pushed its quarterly loss higher. The stock rose 9 cents to $20.14 after spending most of the day lower.

In economic news, the deficit in the broadest measure of foreign trade narrowed by 14.6 percent in the final quarter of 2006 to $195.8 billion, the smallest quarterly imbalance since the summer of 2005. A lower foreign oil bill took received some credit. For 2006, the Commerce Department said the current account deficit, which reflects not only trade in goods and services but also investment flows between countries, set a record for the fifth consecutive year.

The Labor Department said the prices of imported goods rose 0.2 percent in February when excluding oil prices. In January, import prices fell 0.9 percent.

Weighing in again with mortgage data, the Mortgage Bankers Association said Wednesday its weekly mortgage index, which measures mortgage loan application volume, rose 2.8 percent on a seasonally adjusted basis from the prior week. On Tuesday, the group's report that new foreclosures jumped to their highest-ever level in the fourth quarter of 2006 helped touch off the day's cavalcade of sell orders.

In other corporate news, Citigroup Inc. rose 33 cents to $49.08 after announcing plans to begin a tender offer for Nikko Cordial Corp. on Thursday after raising its offer for Japan's third-largest brokerage to quell shareholder opposition.

Lehman Brothers Holdings Inc., the fourth-largest U.S. investment house, credited robust trading and an expansion overseas with driving first-quarter profits. Lehman fell 28 cents to $71.72 on investor concerns the subprime meltdown will hurt financial stocks.

The recent volatility in the U.S. markets has drawn concern from some investors grown accustomed to the calm conditions since U.S. stocks began their steep climb in July. Even before Wall Street's recent uneasiness, volatility might have been expected to increase as the contract expirations near for stock index futures, stock index options, stock options and single stock futures. Such expirations can bring volatility as investors try to square their options and futures orders.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 3.72 billion shares from 3.49 billion on Wednesday.

The Russell 2000 index of smaller companies rose 6.56, or 0.85 percent, to 775.68.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com
 

screamy

TRIBE Member
I know etrade had a "sign up for a new account, get 100 free trades" promo on, but I just saw it on the splash page. Not sure what the restrictions are, if any.

And yay for having a "definitive" thread...this makes me happy!!
 

wakipaki

TRIBE Member
AshG said:
on a related note, what's the easiest way to buy very low management fee stocks and bonds.

to start i just want to, well start. index funds i suppose, that sort of thing, until i bring myself up to speed to the point where i'm more comfortable dealing with specifics.

i've got a mixed bag of shit already, managed by a broker, that does well, but i'd also like to do some trading myself. just for shits really at the moment.



e trade
 

lobo

TRIBE Member
I don't know if anyone has talked about it here on Tribe or not but I'm wondering if any of the financial people on here had any comments regarding the Smith Manoever to help pay off your mortgage?

Lobo
 
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