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Oil's Evolving Role in the Dow Transports

by: Lawrence Hamtil  on Sunday, March 18, 2018

Developed by Charles Dow over one hundred years ago, Dow Theory is one of the oldest forms of market analysis, and is still in widespread use by market strategists.  Dow Theory is the essence of simplicity; for a market move to be confirmed, both the Dow Jones Industrial Average (or DJIA), and the Dow Jones Transportation Average (DJTA) have to follow one another either to the upside or the downside.  The logic behind it is that since the equity markets track the fortunes of the broader economy, both the stocks of companies that manufacture goods and the stocks of companies that ship them should move in lockstep.   Read More

Capex Darlings and the Myth of Long-Termism

by: Lawrence Hamtil  on Tuesday, March 13, 2018

The buyback vs investment debate is back this week, spurred by a column by Bloomberg columnist Barry Ritholtz, who cites General Electric, IBM, and Exxon Mobil as examples of misguided policy, given that their current share prices are well below the levels at which large repurchases were made by each. Read More

Imagining the Next Bear Market - Part II

by: Lawrence Hamtil  on Tuesday, March 06, 2018

Last summer, I made an attempt to visualize how the next bear market will play out by using examples from the two most recent S&P 500 bear markets, which began in 2000 and 2007, respectively.  Then, earlier this year, I looked at drawdowns for the S&P 500 at both the index and individual sector level.  I thought it might be helpful to build on these two articles in an attempt to estimate (albeit in a very crude fashion) the depth of the next S&P 500 bear market. Read More