The Exchange
  • Will ‘Sell in May’ Come True This Year?

    By Terry Connelly

    It’s baseball season, so superstition is back in fashion in the stock market – not least, the old chestnut, “sell in May and go away!” And this little rhyme is not really like wearing the same socks to keep a win streak going; indeed, it’s all about knowing when to “fold” on the 2013 equity winning streak, take your cash and head to the beach. And there are even some statistics that bear out the claim that stock market returns in the May-September period do tend to run lower than over the remainder of the 12-month cycle commencing on May Day.

    But as Rex Kramer (Robert Stack) warned us so memorably in the immortal movie, “Airplane,” when the hero pilot suggested an apparently obvious life-saving maneuver: “No, that’s just what they’ll be expecting us to do!”

    Trusting the conventional wisdom

    In this case, as in the past three years when “sell in May” seemed to work right (at least until about July), “they” are the hedge funds and other money managers who missed the Q1

    Read More »from Will ‘Sell in May’ Come True This Year?
  • If you'd put the sell in May and go away rhyme into practice, you would have exited the stock market this year at a time when the S&P 500 had risen 9.2%. Not a bad gain since the start of 2013.

    However, should you prefer a more fine-tuned approach to the wholesale departure (if anyone in reality does that), you may choose to study the biggest individual winners and losers for their potential to reverse. Of course, in isolation, a stock's being down or up a lot is only one thing -- it's not much more thorough than the idea of simply shutting out the lights when the fifth month of the year arrives.

    Nobody knows where we're going, only from where we've come, so shorting the strong and buying the weak doesn't guarantee you anything. But if you're inclined to start here, the bountiful and the woeful are as follows:

    For this year, the stocks that have risen the most so far on the S&P are a little more diverse than the market's weak names. The top advancers have a bit of a consumer-services

    Read More »from Reversal Candidates? Netflix Stays in Lead, While Miners Slump
  • In the Longer Run, the Short Run Matters

    By George L. Perry

    The worst of the deadlock between the House and the White House has passed, and there are even signs that a compromise may now be reached addressing long-run budget issues. We are in a better place politically than we were late last year, but still in no position to get complacent about near term economic prospects. Chances of renewed recession are low, but so are prospects for vigorous expansion.

    For the past two years, the need for fiscal and monetary stimulus has been debated both in Washington and Wall Street. One thing that has been missing from these debates is the potential for longer run damage if the sluggish economy persists. When a recession is brief and the economy returns promptly to high rates of employment, the long-run costs are minimal. But when recovery is weak and joblessness persists for many workers, the long-run costs become meaningful. And they include worsening the long-run fiscal problems that concern everyone.

    The economy’s economic

    Read More »from In the Longer Run, the Short Run Matters
  • Smartwatches: Wave of the Future or Over-Hyped Failure-in-Waiting?

    By Kevin Chupka

    It wasn't long ago that many were declaring the wristwatch dead, killed by the rise of cellphones. The logic: Why would you need a time-tracker on your wrist when you have a smartphone that provides this service – and so much more?

    According to sales data from NPD Group, in the two-year period from 2008 to 2010, casual watch sales in the 18-24 demographic fell a whopping 29%, even as overall growth was at 4%. Given this downtrend in sales to an emerging generation of consumers, it might seem counterintuitive that all the big tech companies have either announced plans to release a “smartwatch” or are at the center of rumors about them.

    The Wall Street Journal recently reported that Microsoft (MSFT) would enter the space with a Windows watch. Microsoft joins the likes of Google (GOOG), Apple (AAPL) and Samsung, who, according to speculation across the industry, are all in some stage of development regarding smartwatches.

    The idea is not new. Sony (SNE), Casio, Timex and

    Read More »from Smartwatches: Wave of the Future or Over-Hyped Failure-in-Waiting?

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(654 Stories)
 
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