December 2, 20101Comments

The Leak on WikiLeaks – Regulators Knew About Risks That Led to Financial Fallout

While I cannot predict what WikiLeaks will leak about some major banks, I have a hunch that one of the revelations might be from a special New Constructs report provided to the Senate Banking Committee’s Subcommittee on Securities, Insurance, and Investment.

by David Trainer, Founder & CEO

November 19, 20102Comments

Bernanke’s Masterstroke Puts the Ball In the Fiscal Policy Court

Contrary to nearly every headline you read about monetary policy these days, I believe it is quite possible the Fed Chairmen Ben Bernanke is performing quite well and much better than any of his recent predecessors. In fact, I think he is directing monetary policy with unprecedented precision and skill.

by David Trainer, Founder & CEO

November 17, 20101Comments

How Artificially Low Interest Rates Harm Economies in the Long Term

Maintaining artificially low interest rates or excessive money supply does permanent damage to economies in the medium and long-term because it delays creative destruction, the process of replacing low-return investments with higher-return investments. To help illustrate this point, I present the “Investment Opportunity Schedule” in Exhibit 1

by David Trainer, Founder & CEO

November 15, 20100Comments

S&P 500 Is Fully Valued

The Risk/Reward of the entire S&P 500 gets our Neutral Rating. Our recently published Index Benchmark report on the S&P 500 offers unique insights into the underlying profitability and valuation of all the companies comprised by this index. It also offers benchmarks for (1) investors considering buying ETFs or Index Funds based on the S&P 500 and for (2) comparing individual stocks to the S&P 500.

by David Trainer, Founder & CEO

October 27, 20100Comments

Wall Street’s Secret Plans To Continue Raiding the Capital Markets

In another excellent expose "Wall Street Proprietary Trading Under Cover", Michael Lewis exposes Wall Street's plan to exploit loopholes in the laws and regs to continue proprietary trading, the activity that was the primary downfall of Bear Stearns and Lehman Brothers.

by David Trainer, Founder & CEO

October 14, 20100Comments

Private Sector to the Rescue Part 1: The Google Price Index and Better Markets, Inc.

At a time when most of the public believes political leadership to be weak, we should not focus on finding scapegoats but rather on assuming accountability to help fix problems.

by David Trainer, Founder & CEO

October 14, 20100Comments

Wall Street Compensation Does Not Lie

For anyone who questions whether or not the rules of the game are controlled by those wuith the most money not the most ability, look no farther than Wall Street's compensation.

by David Trainer, Founder & CEO

September 28, 20100Comments

Munger on Accountants: “Utterly failed us…and no sign of reversal of the failure”

The reason we focus on Economic Earnings as opposed to Accounting Earnings is because Accounting Earnings are subject to too much manipulation - as Charlie Munger states below. This problem is not going away anytime soon.

by David Trainer, Founder & CEO

September 28, 20101Comments

Munger on Wall Street: Easy Money Corrupts

The Munger version of that is "easy money corrupts, and really easy money tends to corrupt absolutely."

by David Trainer, Founder & CEO

September 28, 20105Comments

XBRL: Digital Needles In the Digital Haystack

We have always known that finding data is the Footnotes is, for most investors who are without our patented Research Platform, like searching for needles in a haystack. With XBRL, the only difference is now investors can search for digital needles in a digital haystack. Funny how little things change.

by David Trainer, Founder & CEO

September 17, 20100Comments

Stock-Picking Matters More Than Ever

As follow-on to my 3-part Market Outlook series of posts, I am highlighting a quote from GaveKal research's Daily note today which supports my assertion that the "Easy Money Days Are Over" and that success in stock-picking will rely on superior analytical skills as opposed to the market-timing skills that have predominated most of the past 25 years (see Market Outlook Part 1: Rise of the Speculative Movement).

by David Trainer, Founder & CEO

Paradise Lost

September 2, 20101Comments

Market Outlook Part 3: How To Be Successful Post the Speculative Movement

The end of the Speculative Movement and the momentum-investing fad means we are entering an environment more conducive to value investing or, more specifically, an environment where skill in assessing the true economic profitability and valuation of companies will determine the success of stock-pickers.

by David Trainer, Founder & CEO

Speculators Paradise Is Over

September 2, 20104Comments

Market Outlook Part 2: The End of the Speculative Movement

I believe that most of the traders and speculators who have been successful enough to stay afloat will be forced to exit the business or shift to a value investment style - an endeavor in which I expect very, very few to be successful. And though there will be fewer speculators, enough will remain to keep the markets from being too efficient.

by David Trainer, Founder & CEO

Speculator's Paradise

September 2, 20102Comments

Market Outlook Part 1: Rise of the Speculative Movement

Since the early 1990s, we have seen huge growth in the number of speculators and their impact on the market. Belief that it was easy to make money in the stock market was the primary driver of this boom in speculation. As shown in Exhibit 1, it was VERY easy to make money in the equity markets from 1986 to 1999.

by David Trainer, Founder & CEO

August 11, 20100Comments

Wall Street Research Cannot Be Trusted – Proof Point

In case you needed proof beyond the Global Research Settlement that Wall Street research cannot be trusted, Morgan Stanley delivers by admitting "inadequately disclosing conflicts of interest on the part of its research analysts."

by David Trainer, Founder & CEO

July 19, 20100Comments

Good Place to Track Hedge Fund Returns

Boomerang Capital Partners provides a great resource for tracking and benchmarking investment returns for hedge funds in general and the many different hedge fund strategies. Here is the link to the page where they offer a free report called the Periodic Table of Hedge Fund Returns.

by David Trainer, Founder & CEO

July 19, 20100Comments

TED Spread Says Financial System Is In Good Shape

The takeaway: the TED Spread indicates the financial system is relatively safe these days with no imminent danger. It has recently fallen from recent highs related to the debt issues in Europe and it is no where near where it was during the sub-prime crisis which led to the Lehman crisis when the TED Spread hit historic highs.

by David Trainer, Founder & CEO

July 13, 20100Comments

No Double-Dip Recession In Sight, Just Slow(er) Growth

As highlighted in LPL Group excellent "Mid-Year Outlook for 2010", the economy is moving from 'recovery' mode to 'expansion' mode, which is very different from moving from 'recovery' back to 'recession' - a prediction made by many attention-seeking alarmists these days. We are still growing, just not as fast.

by David Trainer, Founder & CEO

July 7, 20101Comments

Charles Schwab Corp (SCHW) Neutral Risk/Reward Rating for Ask Matt Readers

Here is a free copy of our report on SCHW for Ask Matt readers. This report provides details behind Matt's analysis of SCHW in his recent article in USA Today:

by David Trainer, Founder & CEO

June 4, 20100Comments

GM – How far will companies go to dupe investors?

In April, GM bragged about having paid back the balance of its $6.7 billion loan under the Troubled Asset Relief Program. In truth, the did nothing of the sort. They simply pirated taxpayer funds to cover their losses.

by David Trainer, Founder & CEO

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