Sunday, May 27, 2012
Tuesday, May 22, 2012
Facebook IPO
The Facebook IPO was a flop however since it has fallen from $45 to $31 in 3 days everyone is now crying foul and saying they were ripped off in the process. However back in late 1999 VA LINUX (LNUX) came out as an IPO and reached just over $300 it's first day of trading. It has never gotten close to that price since then and now trades just over $14 as GKNT. However keep in mind it did a 1:10 reverse stock split in 2010 so in reality the late 1999 price in real dollars was over $3000 a share. Nothing is a given in the market so those that were looking to make a quick profit off of the overvalued Facebook IPO got what they deserved just like those who bought LNUX at the open back in late 1999.
Saturday, May 19, 2012
Weekend Stock Market Analysis
The latest Weekend Market Analysis provided by Amateur Investors is
at http://www.amateur-investor.net/Weekend_Market_Analysis_May_19_2012.htm
at http://www.amateur-investor.net/Weekend_Market_Analysis_May_19_2012.htm
Friday, May 18, 2012
Price of Gasoline
The Gasoline Futures have dropped 55 cents since the peak back in April however the national price of regular unleaded has only fallen 21 cents. Thus based on the latest Futures Contract the average price of regular unleaded should be falling under $3.40 a gallon at some point.
Friday, May 11, 2012
House screws Federal Employees
Here you go...House approves increase in pension contributions
Let's hope the Senate has some balls and doesn't pass this.
Let's hope the Senate has some balls and doesn't pass this.
Thursday, May 10, 2012
Are there any viable Presidential Candidates?
Personally I see no difference between Obama and Romney. Romney is a closest Democrat while Obama caters to the far left. Ron Paul has some good qualities but will he follow through on attacking the Establishment which includes Big Business and Wall street.
Wednesday, May 2, 2012
Is the Stock Market Undervalued?
Recently Alan Greenspan said the stock market was way undervalued. However based on research done by Robert Shiller the Cyclical Adjusted PE Ratio (CAPE) indicates the market is not undervalued. The chart below shows the long term average CAPE is at 16.4 which means the market would be fairly valued at that level. Back in March of 2009 the CAPE dropped to 13.3 so it was undervalued by roughly 19%. However in April of 2012 the CAPE has risen back to 22 so the S&P 500 is now overvalued by 34%.
Finally previous historical major market bottoms (points B) haven't occurred until the CAPE has dropped to a value of 7 (points A). The last time the CAPE dropped to around 7 was back in 1982 which preceded the Secular Bull Market from 1983 through 1999. Thus the question is will the CAPE eventually have to drop down to the 7 level before a major market bottom occurs?
Finally previous historical major market bottoms (points B) haven't occurred until the CAPE has dropped to a value of 7 (points A). The last time the CAPE dropped to around 7 was back in 1982 which preceded the Secular Bull Market from 1983 through 1999. Thus the question is will the CAPE eventually have to drop down to the 7 level before a major market bottom occurs?
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