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Portfolio Strategy News Daily Links 12-22-2008

Note: The articles below are intended to be thought provoking and for your reading enjoyment. Please be aware that we publish these links for educational purposes only. The opinions expressed are not necessarily those of Hennion & Walsh or its employees. Hennion & Walsh is not responsible for the content of these articles, nor should their inclusion be considered an endorsement on our part.

Barrons.com: Cashing In on the Cash Bubble
“If the cash bubble bursts, the record amounts of cash held by investors and corporations would flow back into the financial markets, benefiting stock prices and other assets, including fixed income, emerging markets, commodities and currencies. Even moribund investment bankers might get some action if corporations resort to mergers and acquisitions to increase depressed earnings, or diversify product suites.”
TheMotleyFool: The Most Dangerous Way to Invest Today
“Picking a stock without considering the economic environment is like picking out your clothes in the morning without considering the weather that day. Sure, that Def Leppard 1987 Hysteria Tour T-shirt may be comfortable and give you tons of street cred, but it’s just not practical in a foot of snow. All joking aside, no matter what sector you’re looking at, there are macroeconomic factors that will make a big difference to your investing thesis — durable-goods orders if you’re looking at manufacturers, housing starts for homebuilders.”
WSJ MarketBeat: Nixing the VIX
“If the stock market�s ‘fear gauge’ is anything to go by, investors are going to be less frightened for a while. The Chicago Board Options Exchange�s volatility index, or VIX, has been sliding steadily since the beginning of the month and now sits at levels last seen in early October, around 43. A lower reading on the VIX generally is seen as a positive for the equities market. The index tracks prices at which investors are willing to buy and sell options on the Standard & Poor�s 500 index – often to protect themselves against downward moves in stock prices. Because of that, the index tends to have an inverse relationship with the market.”
MarketWatch: Global downturn picking up speed, recovery only a forecast

    “Most annual forecasts are ‘notoriously wrong,’ said Steve Ricchiuto, chief economist at Mizuho Securities in New York. Ricchiuto and other economists say that it will not be until May that it is clear whether there will be a rebound in calendar year 2009.”

MarketSci Blog: Trading Strategy: Monthly Seasonality Mash Up

“In this report I�ll combine the two monthly seasonality observations I talked about recently, options expiration week and the turn of the month
into a fairly effective strategy using nothing other than the time of the month.”