Posts Tagged ‘HD’

  • Bernanke to Testify at 10 am
    , February 26th, 2013 at 8:49 am

    Today looks to be an eventful day. After the market’s worst day in more than three months, investors look to make back some gains today. The biggest news today will be Ben Bernanke’s testimony at 10 am before the Senate Banking Committee.

    Wall Street is still trying to digest the fallout from the elections in Italy. What seems to have happened, and we still don’t exactly know, is that this is the first election in which voters said no to austerity and by austerity, I mean Germany. In other countries like Greece and Ireland, the voters eventually pleased the markets. The Italians, however, did not. There’s no clear-cut winner and Italians may have to head back to the polls soon. In response, the euro dropped very sharply yesterday although it made back some of its losses.

    Look what else we have on tap for this morning: The FAHA House Price Index and Case Shiller Index come out at 9 am. Then at 10 am, New Home Sales, the Richmond Fed Index and Consumer Confidence are released.

    As I’ve talked about before, the key driver of the economy and market is any area where the consumer intersects with finance like cars, homes or travel. We also see that in spillover industries. We saw a good example of that this morning as Home Depot ($HD) reported earnings of 68 cents per share which was four cents better than estimates.

  • A Housing Boom?
    , August 14th, 2012 at 10:51 am

    Is there a housing boom afoot? Well, the simple answer is no. But there has been some modestly good news, and combined with some very cheap prices in housing-related stocks, that’s added up to a nice rally in the sector.

    Check out this chart:

    Lennar ($LEN, red line) has added some impressive gains. Our Bed Bath & Beyond ($BBBY, orange line) has also been a strong performer. I also included Lowe’s ($LOW, black line) in order to contrast it with Home Depot ($HD, blue line). Just because two companies appear similar doesn’t mean the stocks will perform the same way.

  • A Housing Boom?
    , August 14th, 2012 at 10:51 am

    Is there a housing boom afoot? Well, the simple answer is no. But there has been some modestly good news, and combined with some very cheap prices in housing-related stocks, that’s added up to a nice rally in the sector.

    Check out this chart:

    Lennar ($LEN, red line) has added some impressive gains. Our Bed Bath & Beyond ($BBBY, orange line) has also been a strong performer. I also included Lowe’s ($LOW, black line) in order to contrast it with Home Depot ($HD, blue line). Just because two companies appear similar doesn’t mean the stocks will perform the same way.

  • A Housing Boom?
    , August 14th, 2012 at 10:51 am

    Is there a housing boom afoot? Well, the simple answer is no. But there has been some modestly good news, and combined with some very cheap prices in housing-related stocks, that’s added up to a nice rally in the sector.

    Check out this chart:

    Lennar ($LEN, red line) has added some impressive gains. Our Bed Bath & Beyond ($BBBY, orange line) has also been a strong performer. I also included Lowe’s ($LOW, black line) in order to contrast it with Home Depot ($HD, blue line). Just because two companies appear similar doesn’t mean the stocks will perform the same way.

  • Don’t Invest From 40,000 Feet
    , April 19th, 2012 at 9:49 am

    I read a lot of investment advice on and off the web. One of the mistakes I often see is that investors try to invest from 40,000 feet above their targets. By this, I mean they pay far too much attention to things like politics, seasonal effects or the Federal Reserve.

    I hear people say things like, “I want to hold off investing right now until I see how the election turns out.” I’m never sure what that means exactly. Or they say, “I’d never investment now, not with Helicopter Ben in charge!”

    I realize this sounds like heresy, but the Fed’s role in the movement of stocks is far, far over-rated. What’s more important is earnings and (to a lesser extent) valuations.

    Look at McDonald’s ($MCD). The stock has done very well over the last ten years because its profits have done well. Yahoo‘s ($YHOO) profits haven’t well and the stock has suffered. Sure, there are exceptions, but those are the minority. Valuations, of course, do matter. Overall profits have increased while the market has done poorly.

    Don’t mistake what I’m saying: Monetary policy is important, but even if you knew exactly what the Fed was going to do, that should barely impact your investments. Most investors would be much better off if they ignored all the news about the Fed or politics. People need to believe that someone is in control of the market, and that someone must be in Washington. I hate to break it to you, but they’re not running the market.

    I also hear people say that sure, the market is up over the last three years, but that’s only because it’s been boosted by the Fed. They often say this as if the profits somehow don’t count. Don’t look for confirmation of your political views in the stock market (this is known as the “Larry Kudlow Effect”).

    Since the beginning of 2009, Lowe’s ($LOW) is up about 40% while Home Depot ($HD) is up about 110%. Investors would do themselves a lot more good thinking about how two companies that are so similar can perform so differently or why Starbucks ($SBUX) went from $40 to $10 and is now over $60. What happened there? Google ($GOOG) gets tons of attention but its stock hasn’t outperformed the market over the past few years. Danaher ($DHR) gets almost no attention yet the stock keeps powering higher (even this morning, the AP calls the company a “health care conglomerate“). I don’t think that’s due to Ben Bernanke.

    Ignore the large-scale stuff—anything where it’s easy to have a canned opinion (Obama, Bernanke, Romney). Instead, focus on low level things like one particular company’s sales, earnings and debt.