Opinion (171)


Is The Stock Market Rigged?

Certainly HFT (high frequency trading) takes advantage of minute price discrepancies and can fire off trades faster than your head can spin but is it "rigged"?  Is it illegal? Clearly big funds have an advantage over Joe the Plumber trying to trade his own portfolio.  They, after all, can afford all the bells and whistles, the fancy (more expensive) indicators, gain insider insight and if nothing else, insider information however can you say that's illegal or "rigged"?  Maybe it's more their presence causes concerns over stock market integrity with flash crashes occurring (it seems) on a continual basis now. 

We here at StockBuz strive to trade our ports, whether dollar cost averaging or full trades and do a darn good job at it so collaboration works.  Whether members feel "rigged" is the proper term to use is anyone's guess but right or wrong..............it certainly sells books.

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Minimum Wage by State

1290474?profile=RESIZE_480x480For all the political yammering about raising the Federal minimum wage, it would seem that almost 1/2 of the country is already above the Federal level with Connecticut being the first to jump to $10.10 per hour just yesterday.

For all the fear mongering that raising the minimum wage would lead to job loss, the results don't match the scary bedtime story being spread.  To be honest, who really over staffs anyway (unless it's the holidays)?  In my opinion, businesses hire what employees they need to service their customer flow and keep down their bottom line but don't take my word for it. 

Examine San Jose, who raised their minimum wage to $10 an hour a year ago.  The results after one year have not been massive job loss and small business failure.  Rather San Jose has enjoyed a jump in small business creation, job growth and a drop in their unemployment rate.  With more money in the citizens pockets, it definitely seems to be translating into money flowing into local businesses and t

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The VIX In An Age Of Major Poltical Risk

1290472?profile=RESIZE_480x480Many eyes are watching the VIX as it has not decayed recently and made another new low.  This holding pattern could be due to concerns over Russia possibly invading the Ukraine (who believes them when they say "nyet"), concerns over lackluster earnings, the dreaded "taper", fear of rising rates and a long-in-the-tooth bull run. 

Looking back over recent history, the VIX did a similar basing in the Spring/Summer of 2013 when each month, there seemed to be a "fear" the Fed would announce removing their foot from the QE gas pedal during their FOMC meeting.  18 Italian banks being downgraded just poured more fuel on that short term fire spiking it even higher.  Of course, the market recovered but there seems to be much more going on behind the curtain at this point.1290549?profile=RESIZE_320x320

To quote Marvin Zonis from last weeks CBOE Risk Management Conference, "“We are in the age of major, major political risk.”  Not only is taper on people's minds, but larger geo-political concerns are out there as well such as

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1290335?profile=originalAh, 1978 and U.S. airline deregulation.  What a thing of beauty.  Suddenly there seemed to be a new airline popping up each year, all vying for a piece of the pie in the sky.  Then how to drum up business.  Remember the days of airfare wars?   A new start-up would lower prices to attract business and the big  boys , no longer with the luxury of their monopoly, had no choice but to follow suit as their passenger counts fell in step. 

The consumer was obviously elated!  Even those who previously couldn't afford to visit Grandma in Boca, were suddenly able to take to the skies; kiddies and all.   

1290355?profile=RESIZE_320x320Those were the clear benefits of deregulation and the consumer loved it - but corporate profits did not.

Then came the rise of jet fuel.  Did the government intervene to stop it?  If they did, it was too little too late.  (click chart to enlarge)  It doesn't take a rocket scientist to imagine what that did to profits and prices.

Oddly enough with dramatically less demand, fuel prices haven't

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A plan, which on the surface, appears to be very Reaganesque and commendable however business (in my opinion) has mutated since the '80s and I immediately envision Congress ripping this to shreds eliminating the following:

  • Eliminating tax loopholes while lowering the Corporate tax rate to a "fair" 28%  - seriously?  As if Corporations suddenly want to pay what someone may deem their  fair share?  It's all about profits baby and low-to-no taxes means profits.
  • Removing incentives to relocate overseas.  Corporations have and will continue to shift their mfg to wherever costs are lowest.  What's he smoking and why isn't he sharing?

Give them incentives TO manufacture here (more tax breaks)

1290243?profile=originalHe also proposes the sale of America Fast Forward (AFF) bonds to attract private capital to invest in infrastructure investments.  This reminds me of the bonds which were sold in the 50's...........which I don't recall anyone raving about what a great investment they turned out to be.  Just say

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Random market thoughts

While running a simple screen for Cheap Growth stocks, I had something unusual happen. There was not a single stock that met the criteria. That's right, zero, zilch, nada. The screen only had three criteria; a PEG ratio of .75 or lower, a debt to equity ratio of .8 or lower, and an expected growth rate of 25% for the next 5 years. Only two possible conclusions can be drawn from this. Conclusion A, growth stocks are way over valued at this time. Conlusion B, analyst estimates for earnings growth are still very bearish, too bearish in fact.

My past experience with this screen leads to me too conclusion B. I started using this screen six months prior to the beginning of the bear market. At that time, there was no shortage of cheap growers. In fact I had to add a market cap component to reduce the number of possible candidates. Since the screen depends heavily on analyst earnings estimates and considering the events that occurred half a year later, I would conclude that analysts were too

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First let me state, It's not my deliberate intention to make supportive case for the rampantly growing
already, and bursting at the proverbial seams, laced with redundant, inadequate, and antiquated govt jobs,
Super Bureaucracy of today. That to include it becoming any overbearing, oppressive, Orwellian,
and Nanny State Day Care-ish, that's already now! Yet, I am understanding or of the mindset. That eventually technology will shrink the bureaucracy considerably fold. Thus yielding a correction to the parabolic growth rate it has been in and executing now. No parabolic growth is sustainable indefinitely. And the Masses will soon realize that alot can be done with less in today's real/live time interconnected world.

Second, I am going to try and demonstrate throughout, that the exponential advancements in technology made
thus far, will not only allow us to do this, but undeniably require it at some point. That being taking a
REAL/LIVE time, monthly micro economic management and observa

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Quant Funds & High Frequency Trading

Re: Quant funds & high frequency trading - are they the reason that there issome perception that the market takes an appearance of "climbing smooth hills"(etfs). I heard that this presented a problem for some traders. It seems to meto be the opposite (nice and smooth, some etfs). I wonder if this would at somepoint smooth out the curves on underlying stocks and might be a reason that somecomment that sometimes earnings announcements, etc. seem to get ignored in termsof market action around them, e.g. the conflict between quant fund patternperformance and fundamentally oriented models, etc. My question: for those ofyou that are familiar with the quant fund domain, is it your opinion that the"smooth" price chart forms will continue (up or down). Or, do you think thatwith a down turn (future) that some of the inverse ETFs might smoothly rise. Itseems like 2008 was an extreme situation. I was wondering if a smoother bearmarket (future) would be possible with the new funds/etfs, etc. (wishf

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First, if you are going to criticize something...be prepared to offer solutions/remedies to what your criticizing...Otherwise you are just a wind-bag-arm-chair-critic! I have a plan to put about 400,000 people to work in the next two months time. With no more than a signature of a pen.There's roughly about 140,000* gas stations (70% of them having convenience stores and gas stations) in the USA. Now, only in New Jersey and Oregon is it illegal to pump/dispense your own gas at the station. Thus requiring a filling attendant to put gas in your automobile.Well, if we, meaning individual states governors of the states that dont have them self service laws. Enact similar laws....no....I change that to town ordinances...I say ordinances because this could be started by municipalities passing city ordinances to do this first..citing local unemployment #'s and blithe and economic hardships...to get the legal ball rolling...And make gas stations hire workers to fill tanks. Albeit they will be l

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Charles Schwab Corp. (SCHW) did almost double it's volume today. Saber rattling from Fed on punch bowl yank. Everyone knows CHUCK stands to make good scratch come rate raising time. More so than most. I think today we seen people getting there in the trade. Eat my dust....I 've been there for awhile....;).and riding nice shr avg....Someone is going to look at these guys for deposit/asset base and the retail trading arm that a buyer might be looking for or lacking of.... as bonus. I always felt Chuck was a poster child for asset integrity in all this. Took no TARP. And what little loans were made seem to be low risk. Or I could be wrong...and they're heading for door....last one out get the lights...will ya....lolI wrote the below last AugustI have to tell ya...After reading through the Q at (SCHW)-Charles Schwab...I amreally optimistic about the future for them. Let me state some points. First,someone asked me yesterday why is CHUCK a good long term stock to buyhere?....My reply was th

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Wow! are they ever hyping the impact/importance of the NEXT unemployment numbercoming. It's not as "paradigm shifting" as they make it. Regardless of what is shows or not. It's a drummedup/conjured to suite fit number....Agreed or disagree? They act like it's goingto end all problems on slightest statistically anomaly pimple. It dont change the factpeople are living longer ....and by default working longer/later into life to keep w/ rampantrise in cost of living....All while technology efficiency and automation and corporateprofit seeking to appease the "Masses" takes away(exponentially) the jobs neededto maintain.... let alone thrive and grow a vital economy. Thats the trade off with risinglife expectancy due to exponential advancements in medicine that keep peoplealive longer. Some say we as a species are on the cusp of immortality. Imaginewhat unemployment numbers will be then!I remember Judge Smails from 1980's cult classic "Caddy Shack"...when Danny was sucking up to him for the L

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