Forget The Watch: The Two Things That Really Matter For Apple Stock
Forget the Apple Watch, the iPhone juggernaut and a bigger buyback should keep the stock hot, analyst says.
If It's 3:50PM In Hong Kong, China's Richest Man Must Be Richer
Li Hejun has emerged as China’s richest man by virtue of his controlling ownership in Hanergy Thin Film Power Group, the publicly-listed and thinly traded unit of Hanergy Group.
Accurately Analyzing RSI Divergences
Almost 30 years ago, using a series of networked Apple II computers, I started doing research and began writing about divergence analysis. Over the years, I developed some rather specific guidelines to analyze divergences. In the past few years, there have been a number of articles about divergence analysis that I feel do not allow it to be judged correctly as a technical tool.
In my opinion, these all have one common flaw, as no matter whether they are trying to prove that divergence analysis works or doesn't work, they only look at the daily data. I have always focused my divergence analysis on the weekly data because I find it to be the most reliable.
Over the years, I have observed consistent weekly patterns in the Relative Strength Index (RSI) that are quite useful in determining both intermediate-term tops and bottoms. Often times, weekly RSI divergences will confirm signals from other technical tools like the on-balance volume (OBV), which gives even greater validation to the analysis.
In these examples, I am using the 14-period RSI with a 21-period weighted moving average (WMA). Typically, at major turning points, you will be able to observe the formation of one or more divergences at overbought or oversold levels that form over a six- to 20-week time period. These divergences then must be confirmed by a move in the RSI below a significant support level or above a key resistance level.
Generally, when daily divergences are formed but no there are no weekly divergences, the daily divergences just signal corrections within the intermediate-term trend. The daily RSI analysis can often be used to identify continuation patterns within the major trend.
Those analysts who are only looking at daily divergences conclude that divergence analysis does not work because they observe a series of daily divergences within an intermediate-term trend. As a result, they are often whipsawed and fail to catch the major trend.
I hope the following examples will encourage readers to do their own analysis, especially on the weekly data, as only then will you have the confidence to act on your divergence analysis.
Junk Bonds Are The Investment Opportunity Of A Lifetime, Just Not Yet
An outstanding investment opportunity in high-yield bonds is growing closer. Let’s take a look at what you can do to identify the opportunity and act on it.
The Week Ahead: One Seasonal Trend Investors Should Ignore
In what has been a volatile 2015, investors are looking forward to the long weekend and hoping that the 2nd quarter will be less volatile. Unfortunately, though it is possible, it does not seem likely given the ever-growing wall of worry that is confronting investors.
Investors will now have a few days to ponder the impact of Friday’s weak monthly jobs report for March. Instead of 247,000 new jobs that most economists were expecting, there were only 126,000 new jobs added.
The sharply lower number triggered a 20 point drop in the stock index futures in Friday’s abbreviated trading. Much of the focus this week is likely to be on debate as to whether this report just reflects the impact of the winter weather or is a sign that the economy is deteriorating.
Does it really matter? Investors should never pay too much attention to any one data point or any one bullish or bearish market forecast. As we are entering the 2nd quarter, investors will once again be hit with a flood of articles about the old Wall Street mantra, Sell in May and Go Away.
This, of course, is based on the historical data that shows weaker relative stock performance from May through October than from November to April. I have written many times in the past about seasonal tendencies and I have always stressed that one should only invest or trade a seasonal trend when the technical studies are in agreement.
Best ETF Investing Ideas For Second Quarter 2015 From Five Stock Market Pros
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Exclusive Q&A With Tom Russo on GuruFocus.com
We recently had the opportunity to interview guru Tom Russo (Trades,Portfolio) of Gardner Russo & Gardner about his investment strategies in global investing, as well as how he became an investor. The questions asked are from our readers. Although we received around 44 questions, we were only able to use 15 of them due to time constraints, but we thank all of your for your submissions and encourage you to please continue to submit your questions for our Q&A’s with the gurus.1.How did you begin your career as an investor and what steps did you take to become as successful as you are today? Also, what made you decide you wanted to become an investor?I think my career probably started under the influence of my own family background. My grandfather’s career was as an investor and as a banker and an attorney. He grew up in a town called Titusville, Pennsylvania, which was blessed as having been the birthplace of oil. His family’s own experience as with his wife’s family experience in Titusville was full of business intrigue, fortunes made and lost. I find that to be quite fascinating. The oil went away at some point and the expectations of wealth that were built on that, proved to be fleeting.Seeing the aftermath as a young child growing up in Titusville, and pondering the notion that a very modest place could become eternally rich seeming and then only sort of succumb to the cycles of business was quite interesting to me. I then ended up growing up in a town in the Midwest called Jamesville, Wisconsin. They happened to be the headquarters of a company called The Parker Pen Company. The Parker Pen Company, when I was growing up, straddled the world at the most powerful iconic pen. It was probably 80% international. My hometown had all these global business types running around and they had a business that was a terrific consumer brand. It was internationally able to grow.That’s kind of become something that’s the heart of what I do as an investor. I look for great trademarks, great brands where they’re capable of reinvesting to grow their franchise internationally. I saw that as a kid growing up. I’ve also focused on family controlled companies over my career because it’s my belief that if you get the right family at the helm they can line your interests of the company more closely than companies that have no personal family input underway or any long term mindedness other than what stockholder options can do for management’s own personal wealth.Ironically, The Parker Pen Company was not only foreign and global advantage but it also had the family control company. In that case, the family probably at the end of the day was unsuccessful at transferring what seemed like it was an enduring trademark to their many generations that followed. Today, it’s kind of just a memory in the hometown I grew up in. I was influenced by its presence growing up as it was romantic and intriguing to think that you could have something that people would cover just because of the way you decorated the pocket clip of your pen and gave it a trademark that became esteemed. I liked that quite a lot.Then, early dabblings with stock were fairly illustrious I guess, though I was a student of Dairy Queen back in the early 1970s as a friend of mine recently reminded me having thought about Dairy Queen before Warren Buffett (Trades, Portfolio) took it over 100%. I was pleased to hear that though didn’t invest enough to change my life as a young man based on my early thoughts concerning from the annual report that my friend saw me reading about that company.I did have an interest in investing early on. I fed that interest through studying at Stanford Business and Law School. Really, that’s sort of the first professional layer in which it surfaced. For me, with investing being kind of a question about corporate culture and then the kind of consumer acceptance of brands globally, I spent time as a student at Dartmouth College looking at some anthropology courses and history courses, economics courses to find out what people might care about through anthropology.The cycles of history economically through the history department and then economics studying demand curve so we could figure out if the businesses that we own truly do have price inelastic demand and if so have they been able to harness the power that comes from that. those are things that I studied at Dartmouth, Stanford Business and Law School. I happened to have the great opportunity of studying under a man name Professor Jack McDonald who brought Warren Buffett (Trades, Portfolio) to our class in 1982.