Posts Tagged ‘stocks’

Why last night’s market correction is good news for smart investors

Posted: August 1, 2014 in Business Management
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1929 it ain't. Relax, people.

1929 it ain’t. Relax, peeps.

“Wall Street hammered, Dow closes down more than 300 points!” screamed the headlines.

And stocks did indeed get slammed on Thursday, with the Dow Jones Industrial Average ending the day down 1.87%, at 317 points in the red. The drop wiped out all the benchmark average’s gains for 2014, and put an end to a five-month winning streak for stocks. This was the Dow’s largest point drop of the year since February 3; percentage-wise, it’s the worst plunge since April 10. At 16,563, the index is well below the all-time closing high of 17,138 hit just a couple of weeks ago.

Additionally on Thursday, the S&P 500 saw a 1.89% drop to end at 1,932, and the Nasdaq fell 1.98%, ending at 4,374.74.

So what’s going on? Well, Yahoo Finance editor Phil Pearlman says those looking for easy answers are going to be disappointed. “Over the last 25 years, stocks have their worst month in August. This is the worst time of the year, and we’re getting a preview of that on the last day of July.” Why? Your guess is as good as the experts.

Oooops.

Oooops.

Experts believe the selling was triggered by a variety of factors. To add to the long-standing laundry list of troubles in Ukraine and violence in the Middle East, Argentina failed to reach a deal with bondholders and defaulted late Wednesday. Argentina’s benchmark Mervel index dropped more than 6.5%.

The employment cost index in America also posted its fastest rise since 2008, stoking fears of inflation and chatter of an earlier-than-expected Fed rate hike. There are suggestions of interest rate rises elsewhere too. More expensive money always stokes sell-offs of companies that are highly leveraged or involved in market sectors that respond poorly to interest rate rises such as housing and building.

Though the US selling was intense, there was little evidence of the panic that typically marks the end of selloffs. After years of being rewarded for buying every dip, investors seem conditioned to treat corrections as buying opportunities, though little buying was apparent as of the close. So is this the correction that canny investors have been waiting for?

“I have no idea; my best guess is that [it is]” said Pearlman. “But if we get a 4%-5% pullback,” he continues, “the resulting “panic” could lead to a bottom, which will provide an attractive entry point for some investors with cash ready to put into the market.”

Yahoo Finance’s Jeff Macke commented, “If you’re too nervous to sleep tonight, you’re too long stocks. Trim a little gains if … you’re already nervous. If not, ride it out. This is the way markets are supposed to behave.”

Or to put it another way, if you expect the stock market to always go up, you should probably be investing your money on the gee gees or bingo.

Get ready to buy value. Always look for a track record, good management and good value. As always.

Teens “dislike” Facebook. Now that’s not a headline you ever expected to hear.

Posted: November 11, 2013 in Popular Culture et al
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failbook

Can’t live with ’em, can’t live without ’em.

The age-old aphorism wasn’t originally meant to describe teenagers, but it could. This article from Yahoo neatly captures a problem the granddaddy of all social networks — Facebook — seems to have. Facebook has turned in impressive financial numbers lately, and its stock has soared by more than 80% so far this year, to around $48. But company execs alarmed some analysts recently by acknowledging that teenagers are falling out of like with the site that seemed like a phenomenon when teens first discovered it. (Maybe that’s why two key FB execs unloaded hundreds of millions of dollars of stock in the last couple of days? Ed.)

This is not the age group for a new technology company to piss off.

This is not the age group for a new technology company to piss off.

In a way, that’s a good problem to have. Many companies covet the cachet (and potential future customers) that come with a high proportion of teenage users. But old folks, no matter how uncool, tend to be the ones with money to spend today. For a while, Facebook had the best of both worlds:  A robust teenage audience that kept the vibe young, plus enough oldsters to justify high ad rates and juice profits.

There’s now a lot of competition, however, and Facebook is apparently losing teenage users to trendier networks such as Twitter, Snapchat, Instagram (which Facebook owns), Tumblr (owned by Yahoo, which published this story), and lesser-known online hideouts.

To figure out why, I asked my two teenage kids (who in turn asked a few of their friends), plus a few test subjects recruited through Twitter. Here are the five biggest problems they have with Facebook:

Parents. Apparently they’re ruining everything on Facebook. “If you want to comment on something funny, and you see that somebody’s Mom already commented on it, you don’t want their mom to yell at you,” my 15-year-old son told me. Yeah, that’s a bummer, I consoled him. Many parents, of course, fear their kids will be stalked, bullied or somehow abused via Facebook, so looking over their kids’ digital shoulder is just another way of protecting them. I’m willing to go out on a limb, however, and bet that some parents simply think they’re cooler than they are, and would be crushed to know their teenage kids don’t consider them the best companions, even online.

It’s not just parents. My 17-year-old daughter told me about a friend with an aunt who routinely lurks around her niece’s Facebook account. “Every single photo that [my friend] is tagged in, she’ll write a paragraph about how beautiful [my friend] is. I’m just like, ‘okaaaaay….’” my daughter told me.

Too much pointless stuff. If you ‘re a forty- or fifty-something Facebook user and you’re wondering what all that clutter on the site is about, you’re not as out of touch as you think. “Facebook has 100 things on the newsfeed we just don’t care about,” one of my daughter’s high-school friends explained. Examples: ceaseless invites to play Farmville or other games you may not be interested in, or prompts to answer “questions about me.” Renaud, a 19-year-old Facebook user at McGill University in Montreal, finds that other networks, with far less clutter, are now better at what Facebook used to be good at. “I feel that instantaneous reactions (or what used to be Facebook status) are now more compelling on Twitter, pictures are more fun on Instagram, funny pictures and videos are more tailored for your interests on Tumblr or Vine, and messages on the wall of a friend have been replaced by Snapchat,” he wrote.

Too many ads. Teenagers, not surprisingly, are hip to corporate exploitation. “The biggest problem is the ads,” one of my son’s friends emailed. “Yes, they are needed to make money, but Facebook no longer seems like a social networking site first. It seems like a gold mine for companies to place ads and is straying from its actual purpose.” Particular gripes: Ads that pop up in notifications, and others that scroll down the page right along with the cursor when scanning the newsfeed, as if there’s no escaping them.

It’s vapid. “Everything on Facebook is to gain likes,” another of my daughter’s friends complained. “It’s like a popularity contest. It requires a lot to maintain, like having a good profile picture that will get a lot of likes.” My son said one of his biggest aggravations, after parents, is people — OK, girls — continually asking him to like their status as part of “truth is” requests, whatever those are. “It just fills up your timeline with really stupid stuff,” he said.

Fake friends. In case you’re wondering, adults aren’t the only ones who find it weird to be “friends” with people you’ve never met. A teenager at my son’s school said one of his biggest issues with Facebook is that “it’s normal to be friends with people you don’t know.” One of my daughter’s friends agreed: “I’m friends with people I don’t even know on Facebook, so my newsfeed to me is sometimes just pointless,” she said. “I explore the lives of strangers, and it is a complete waste of my time.” Maybe teenagers and their parents aren’t so different after all.

Meanwhile, we are not expecting anyone at the Wellthisiswhatithink ranch to be cured of their FB addiction anytime soon, but we are also quite convinced that it’s time for The Next Big Thing. Overdue, in fact. And when Facebook dies, as it will, we trust they realise it was because of their own idiocy – filling a social network with ads, push-posting endless amounts of what people don’t want to see, and worst of all, banning people for spamming when they weren’t – by computer, with no human appeal. Zero customer service. it is a matter of time.