Author Archive

• Wall Street Bombed 100 Years Ago Today
  Eddy Elfenbein, September 16th, 2020 at 8:14 am

  

  One hundred years ago today, at one minute past noon, a bomb exploded in Wall Street which killed 38 people and seriously wounded 143. Windows were shattered up to a half-mile away.

  A horse-drawn wagon loaded with dynamite had been parked in front of the headquarters of J.P. Morgan. The dynamite was packed with 500 pounds of cast-iron slugs.

  For the first time ever, trading was halted on the floor of the New York Stock Exchange because of violence. The previous day, anarchists Sacco and Vanzetti had been indicted for bank robbery and murder. At the time, it was the deadliest terrorist attack on U.S. soil.

  No one knows who carried out the attack, but it was assumed to have been orchestrated by an Italian anarchist group. They had carried out a series of bombings in June 1919.

  Damage from the blast is still visible on 23 Wall Street. J.P. Morgan refused to have it repaired.

  

  The perpetrators were never caught.

• Morning News: September 16, 2020
  Eddy Elfenbein, September 16th, 2020 at 7:08 am

  World Economy to Withstand Virus Better Than Forecast, OECD Says

  UAE Signals It’ll Atone For Pumping Too Much Oil in July, August

  ‘Farewell, Fossil Fuels’? What Oil’s Demise Will Do To The World’s Leading Economies

  Europe’s Economic Revival Is Imperiled, Raising the Specter of a Grinding Downturn

  Fed Debates Next Steps After Shifting Approach to Rate-Setting

  Both Candidates Support ‘Buy American’: Both Are Wrong

  U.S. House Report Blasts Failures Of Boeing, FAA In 737 MAX Certification

  Buffett-Backed Cloud Unicorn Snowflake Nets $3.4 Billion In Record-Breaking Software IPO

  Ex-GM Executive Moonlights as Matchmaker in Deal With Startup Nikola

  Movie Theaters Returned. Audiences Didn’t. Now What?

  US Retailers Roll Out Foreign Toilet Paper Amid COVID-19 Pandemic

  Joshua Brown: Gambling & Shorting Nikola, Most Stocks Are Terrible, The Options Trading Bubble

  Michael Batnick: What Should Young Investors Read?

  Ben Carlson: How To Get People To Save More Money

  Nick Maggiulli: The 9 Best Income Producing Assets to Grow Your Wealth

  Be sure to follow me on Twitter.

• Industrial Production Continues to Rebound
  Eddy Elfenbein, September 15th, 2020 at 3:08 pm

  I wanted to mention this morning’s industrial production report. For August, it rose by 0.4%. It’s had a nice rebound after a big fall, but it’s got a long way to go to get back to normal.

  Economists surveyed by The Wall Street Journal had expected a 1% increase in August.

  Industrial production is still 7.3% down from its level in February, the last month before factories shut down across the country to control the spread of the coronavirus.

  Manufacturing, the biggest component of production, rose 1%, a slower pace than in June and July.

  

  In the stock market, today is another strong lead for growth over value. I still suspect that the shift to value isn’t quite over.

  The Fed meeting starts today. We’ll get the policy statement tomorrow. It now looks like the Fed won’t raise rates this year, next year or the year after that.

  Here’s a look at the relative strength of financial stocks. A few days ago, it dipped below the very low level it reached during the financial crisis. This is just a bad time to run a bank.

  

• Trex and Our Track Record
  Eddy Elfenbein, September 15th, 2020 at 8:18 am

  For track record purposes, I assume our Buy List is a $1 million portfolio that’s equally weighted at the start of each year.

  For 2020, we had 445.03783 shares of Trex (TREX) at $89.88 per share.

  Due to the 2-for-1 split, that now becomes 890.07566 shares at $44.94.

  The Buy Below is now $75 per share.

• Morning News: September 15, 2020
  Eddy Elfenbein, September 15th, 2020 at 7:07 am

  Stock Market’s 7% Pullback? Get Ready For More, As A 2009-Style ‘Stair-Step’ Rally Continues, Says Wall Street Bull

  Big Investors Are Dying to Know What Amateur Traders Are Doing

  The Fed and the Future of America’s Debt

  U.S. Restricts Chinese Apparel and Tech Products, Citing Forced Labor

  TikTok’s Proposed Deal Seeks to Mollify U.S. and China

  How ByteDance’s CEO Balked At Selling TikTok’s U.S. Business

  Banks Balk at Fed’s $600 Billion Lifeline for Main Street Firms

  Pandemic-Proof Apple To Kick Off Lineup For Critical Holiday Season

  Verizon to Buy Prepaid Wireless Provider Tracfone for $6.25 Billion

  For Ray Dalio, a Year of Losses, Withdrawals and Uneasy Staff

  Daimler to Pay $1.5 Billion to Settle Emissions Cheating Probes

  With Nissan’s Carlos Ghosn Gone, Greg Kelly Faces Trial Alone

  Ben Carlson: 4 Questions I’m Pondering At the Moment

  Howard Lindzon: The FinTAM Explosion

  Joshua Brown: 7 Summers Ago

  Be sure to follow me on Twitter.

• 20 Years Ago, Small-Cap Value Bucked the Bear
  Eddy Elfenbein, September 14th, 2020 at 11:45 am

  Here’s an interesting chart. The blue line is the broad market and the black line is small-cap value.

  

  March 2000 was the start of a terrible bear market as the tech bubble popped, but small-cap value almost completely ignored the selling. Of course, value stocks had a rough time before that.

  Looking for a single index to represent the entire market ignores many important trends happening beneath the surface.

• Investment Talk By Peter Lynch
  Eddy Elfenbein, September 14th, 2020 at 10:00 am

  If you have the time, here’s a good talk about investing by Peter Lynch.

• Reminder: Trex to Split 2-for-1
  Eddy Elfenbein, September 14th, 2020 at 9:31 am

  Shares of Trex (TREX) will split 2-for-1 today. That means shareholders will get twice as many shares and the share price will fall in half. Our Buy Below price will drop to $75 per share.

  The split goes into effect after today’s closing bell and you’ll see the impact in tomorrow’s trading.

• Morning News: September 14, 2020
  Eddy Elfenbein, September 14th, 2020 at 7:00 am

  Oracle Chosen as TikTok’s Tech Partner, as Microsoft’s Bid Is Rejected & The Woman Taking Over TikTok at the Toughest Time

  Nvidia to Buy Chip Designer Arm for $40 Billion as SoftBank Exits

  Immunomedics Shares Double After Gilead Agrees to Buy the Cancer Drugmaker in $21 Billion Deal

  Amazon Hiring 100,000 New Employees in U.S. and Canada

  AstraZeneca Shows the Risk of Investing in Coronavirus Vaccine Stocks

  Feds Can’t Scapegoat Google and Big Tech As Anti-Trust Targets Forever

  Condo Butler Service Demand in China Sparks 400% Stock Gain

  How GE Has Become a Shadow Of Its Formerly Great Self

  Exxon Used to Be America’s Most Valuable Company. What Happened?

  BP Says the Era of Oil-Demand Growth Is Over

  How to Stop CEOs From Laying Off Workers While Earning Fortunes

  Greed Is Good. Except When It’s Bad.

  Michael Batnick: What’s Driving Inflation?

  Ben Carlson: The Work From Home Backlash is Upon Us & Investing Experts on an Earlier Version of the World

  Joshua Brown: The Whole Story, Why Markets Crash in the Fall, A Tale of Two Semis

  Be sure to follow me on Twitter.

• Inflation Runs Hot in August
  Eddy Elfenbein, September 11th, 2020 at 10:40 am

  This morning’s inflation report was surprisingly strong. For August, the CPI rose by 0.4% (or 0.37% to be more precise). That beat Wall Street’s forecast for a rise of 0.3%. Some of this could be a bounce back effect from the lockdowns earlier this year. We had deflation in March, April and May.

  Nearly 30 million people are on unemployment benefits. The Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, rose 1.3% in the 12 months through July. August’s core PCE price index data is scheduled to be released at the end of this month.

  Gasoline prices rose 2.0% in August after increasing 5.6% in July. Food prices edged up 0.1% after declining 0.4% in July, the first decrease since April 2019. The cost of food consumed at home fell 0.1% after dropping 1.1% in the prior month.

  One interesting detail from the report: the cost of used cars and trucks rose by the most in 51 years.

  The core rate of inflation also rose by 0.4% (or 0.385%).

  Over the last three months, inflation has been running at more than 6.2% annualized while core inflation has been at 5.1%.

  Here’s a look at monthly core inflation: