Best Stock Market Recovery Ever

Year Ends With Record High The stock market ended 2020 at a record high as the S&P 500 rose 64 basis points. Tesla was up 1.57% to a new record. This was the stock of the year. It now has a $669 billion market cap. Investors highly doubt it will have a great 2021. It…

Stocks Set For Multiple Contraction In 2021

Earnings & Stock Price Mismatch EPS growth and stock prices don’t always match if you’re looking at data by year. As you can see from the table below, in 3 out of the 7 years EPS fell, stocks were up. In 5 of 9 times the stock market fell, EPS growth was positive. We will…

Beyond the Looking Glass: Equity Peer Group Analysis

So you’ve found a stock and want to weigh its merits as an investment by comparing it to its peers. The tendency is to over-simplify the process by only considering companies that have similar products. The purpose of this article is to look beyond just the simple reflection of the stock in question and focus…

Can Tesla Catch Facebook?

Small Caps Rebound This is low volume trading at the end of the year which doesn’t mean much. Obviously, if you are taking profits and buying stocks, the prices are real, but we shouldn’t use this action to make conclusions about how January will go. As you can see from the chart below, the MSCI…

Energy Could Dominate 2021

Q4 GDP Growth Estimates The Chief Economist at RSM, Joseph Brusuelas, raised his Q4 GDP growth estimate from 2.7% to 4.8% on Wednesday because of November’s trade and inventory data. Remember, even though the quarter is over, only about 2/3rds of the data is out, so we have a lot of room to go until we…

2020 Hindsight Brings Out the Foresight to Hedge into 2021

As we approach the turn from 2020 to 2021, option traders are looking to major market index ETFs to hedge. Many look at the new year as an opportunity to set goals for redefining themselves physically, spiritually, financially, etc. A rebirth! However, how many aspects of our current circumstance will be suddenly absolved in 2021?…

Almost A Correction In Small Cap Growth

Are We In A Correction? It sounds silly to ask if we are in a correction because the S&P 500 is 22 basis points off its record high with its decline on Tuesday. However, it's not asking if we are in a correction in large caps. It's asking if we are in a correction in…

High Frequency Economic Data Tanks

Same Store Sales Growth Jumps Redbook same store sales growth is indicating there was an upturn in spending in the 2nd half of December which is interesting because most indicators have been weak. You’d think there was more weakness in the end of December because the virus spread as the month progressed. The vaccines have only…

A Magic Formula for a New Year

As we stare down the end of 2020 and welcome 2021, you may be looking for some magic formula to use in your investing. If you are, you are in luck, at least in name only and possibly more. This is a simple fundamental formula for investing developed by Joel Greenblatt in his 2006 book,…

Monster FANG Rally To End The Year

Another Santa Rally The stock market usually does well in the week between Christmas and New Years Day. The fact that we got a stimulus during this week made the rally even stronger (S&P 500 was up 87 basis points). Plus, many investors probably don’t want to sell because they would rather pay taxes next…