Time’s up. The fallacy-driven beliefs and actions have had their turn. Once again, the visible irregularities are stretched. Therefore, the misshaped environment is ready to produce profits from reality-driven investing. So, what are the irregularities? First off, know that the Federal Reserve is neither a perpetual source of wisdom nor an accurate forecaster. Instead, it periodically makes costly mistakes. The 19-year period of Ben Bernanke, Janet Yellen, Jerome Powell has been especially harmful. Its interest rate actions significantly disrupted capitalism’s key strength: the capital markets’ pricing process (interest rate determination) between capital providers and users. Especially harmed have been the…

Algorithmic Trading The term algorithmic trading is tossed around a lot these days. But what does it mean? Let’s break it down into its components. It’s not that defining an algorithm is all that complex. If anything, it is very simple. An algorithm is a set of instructions enabling a computer program to put together different sources of information [data] and generate a result. If you’re talking algorithms, you’re also talking AI and data. Both are equally straightforward. At its core AI is simply a way to organize, analyze, and apply data for an outcome. Data is anything that has…

Fellow investors, we’re witnessing a bond market bloodbath that would make even the most hardened WWI veteran wince. As we trudge into 2025, there’s no Christmas truce – or “Trêve de Noël” as the French would say, referring to that brief 1914 pause when soldiers exchanged greetings and gifts – in sight for our beleaguered Treasury bonds. Yields have surged 20 basis points since the Fed’s last pow-wow, it’s leaving investors with a case of financial shell shock. Uncle Sam’s fiscal house is a mess, plain and simple. We’re talking a $2 trillion deficit – that’s 7% of GDP for…

Key News Asian equities were largely lower on light volumes as the Philippines was closed for Rizal Day, which is a national holiday commemorating the life and works of Jose Rizal, a national hero of the Philippines. Both Hong Kong and Mainland China bounced around the room on decent volumes considering the holiday season. One factor in the volumes was $947 million worth of net buying of Hong Kong-listed stocks and ETFs by Mainland investors via Southbound Stock Connect, accounting for a staggering 55% of total turnover. The cumulative net flow from Southbound Stock Connect is now $102 billion versus…

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. Start slideshow: 10 Oversold Stocks You Should Know About » In trading on Monday, shares of Adobe entered into oversold territory, hitting an RSI reading of 29.4, after changing…

As of December 27, Joe Biden ranks ninth among U.S. presidents (post 1928) in stock-market performance. That’s not likely to change in the last few days of his term. Bill Clinton remains the champion, with a 17.49% annual return for the Standard & Poor’s 500 Total Return Index during his presidency in January 1993 to January 2001. He managed to balance the federal budget (with help from the Internet boom), and to avoid major wars and recessions. President-Elect Donald Trump, in his first term, saw the stock market return 15.95% per year. As he likes to point out, he was…

In today’s stock market, the best stories win. Nowhere is that more evident than in Tesla shares. The bull thesis for Tesla is mostly predicated on a simple story: Elon Musk’s cozy relationship with President Trump will be very good for Tesla. Investors are buying that story big time. Elon Musk reportedly spent $277 million to support President Trump and other Republican candidates in November. Since Election Day, Tesla’s stock has soared 72%, adding a staggering $570 billion to its market capitalization. In a Bloomberg story about Musk’s Trump trade, Esha Dey writes: “What happened to trigger the turnaround? Nothing…

The other day, we broke down how return of capital (ROC) can be both good and bad for investors in 8%+ yielding closed-end funds (CEFs). But in the case of high-quality CEFs, ROC is, contrary to what most people think, a good thing. Today we’re going to look at some real-world examples to explain how, in fact, return of capital can make up a large share of a fund’s returns. To do so, we’re going to go into five Nuveen funds, the Nuveen S&P 500 Buy-Write Income Fund (BXMX), Nuveen Dow 30 Dynamic Overwrite Fund (DIAX), Nuveen S&P 500 Dynamic…

The exchange traded fund that reflects the price movements of a host of retail stocks hit a new high in November but failed to make it quite that high in December. Certain individual retail equities, on the other hand, found a way to keep going and then established the higher highs. No one disputes the value of diversity when it comes to buying stocks but the investor who can discern which might be better than others could come out ahead. With that in mind, here is the retail ETF chart — and the charts of four individual names that have…

History suggests there never was a realistic chance Volkswagen’s radical restructuring plan would succeed in watering down its counter-productive, politicized corporate structure, although signs of a huge existential crisis on the horizon may still bring about that change. Volkswagen wanted to close three German factories to address efficiency shortfalls as Europe’s biggest automaker faced weaker markets at home and in China, floundering electric vehicle sales and lagging profitability at its own VW brand. After negotiations ending just before the holiday break union leaders declared the talks a “Christmas miracle” because there will be no immediate factory closures, layoffs or wage…