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Market Folly submits:Market strategist Jeff Saut is out with his latest investment commentary entitled, "Don't bet the farm." In it, he lays out some basic risk management principles. The first of which, obviously, is to not bet the proverbial farm on any one scenario, no matter how good it looks. Managing downside risk is the key to success in markets. Louis Bacon, famed hedge fund manager at Moore Capital, will be the first to tell you that. Saut also believes that portfolio rebalancing is one of the tenets of successful investing. This whole conversation is an extension of his commentary last week where proclaimed risk adjusted stock selection is a key to portfolio success. You can read his entire investment strategy for the rest of his thoughts on risk management but we wanted to touch on his latest market thoughts as well. Saut highlights an excerpt from Lowry's Selling Pressure Index, who writes,Complete Story »

Steve Alexander submits:Think back a decade ago to mid-2000. The average person probably owned a single desktop computer and accessed the Internet through AOL (AOL) dial-up. Few people bought products on-line. Nearly everyone still purchased CDs to own music and VHS tapes to own movies (DVD did not outsell VHS until 2001). Film cameras were found in 90% of homes while digital cameras had only penetrated 10%. Digital cameras still took relatively small, low-quality photos - 3 megapixels was state-of-the-art at the time. Digital video was barely even being used in Hollywood, let alone in the hands of consumers.Most computer files were small, text-based word processing or spreadsheet documents that could easily be backed up onto floppy drives, Zip drives, or CD-ROM disks. Back in 2000, the largest hard drives you could find were about 80 gigabytes (GB) in size, and most computers had disk drives in the 20-40 GB range.Complete Story »

Brooks McFeely submits:4:16 PM, Jul 19, 2010 --

• DJIA up 56.5 (+0.6%) to 10,154
• S&P 500 up 6.37 (+0.6%) to 1,071
• Nasdaq up 19.2 (+0.9%) to 2,198

GLOBAL SENTIMENT Complete Story »

Jesse Felder submits: The 10-Year Treasury Note currently yields just under 3%. The 15 Dow components above all sport dividend yields greater -- with a hypothetical portfolio yield nearly a full percentage point higher. Which would you rather own over the next decade? Disclosure: NoneComplete Story »

Chuck Carnevale submits:ChameleonsInvestors have generally considered tech stocks as growth stocks. However, to be technically precise (pun intended), most tech stocks would be better described as a quasi-cyclical growth stocks, at least historically. On the other hand, a case could also be made that most tech stocks are in truth chameleons that are ever changing how they look.It could be argued that tech stocks were growth stocks during the five infamous years known as the irrational exuberant period, 1996 through calendar year 2000. Then, they morphed into more pure cyclical stocks for the five years that began with the 2001 recession through calendar 2005. Over the most recent past five years, 2006 through current, they have now evolved into dividend growth stories.Complete Story »

Roger I. McNamara submits: It seems plain that as U.S. stocks headed into the current "Earnings" season most companies reporting June Quarterly outcomes would post a number above what had been consensus estimates. Managements --- whether influenced by the myriad and arcane constraints of Sarbannes-Oxley or otherwise --- have become well practiced at "guiding" The Street lower, the better to then report "surprises" which "beat" the number. This seems to me widely understood and accepted. As if on cue and by tradition leading the pack, Alcoa (AA) chipped in following the close of Monday July 12 with strong results accompanied by positive sounding commentary. But center stage this week clearly belongs to Intel (INTC), which as the sun set in the East on Tuesday the 13th had some positively exciting things to say not only about its recent Quarter but the state of the microprocessor Industry as a whole. Alcoa traded higher on Tuesday but at this writing --- 3:00PM Wednesday EDT --- has surrendered much of the gain. Intel at its best level today was ahead by close to 6%, but hs since given back roughly half that amount. My argument is that Alcoa and Intel now stand as proxies for a general pattern to emerge in coming weeks.Complete Story »

Brooks McFeely submits:4:26 PM, Jul 14, 2010 --

• NYSE down 4.42 (-0.1%) to 6,903.36
• DJIA up 3.70 (+0.04%) to 10,367
• S&P 500 down 0.17 (-0.02%) to 1,095
• Nasdaq up 7.81 (+0.4%) to 2,250

GLOBAL SENTIMENT Complete Story »

Frederic Ruffy submits: SentimentStocks are trading mixed late Wednesday, with strong earnings from Intel (INTC) helping support the tech-heavy NASDAQ, but disappointing retail sales numbers and a dim view on the economy from the Fed weighing on other sectors of the market. Stock index futures rose late Tuesday after Intel posted solid second quarter earnings and also raised estimates for the third quarter. However, the Dow Jones Industrial Average opened only modestly higher after the Commerce Department reported that retail sales fell .5 percent in June, and more than double what economists had predicted. The Dow was holding modest gains into midday until the minutes from the latest FOMC meeting showed Fed officials revising downward their forecast for economic growth to 3 to 3.5 percent in 2010, down from earlier predictions of 3.2 to 3.7 percent. The Dow Jones Industrial Average is now down 36 points. The NASDAQ is up 1. With forty-five minutes left to trade, the CBOE Volatility Index (.VIX) edged up .58 to 25.14. Trading in the options market remains active, with about 6.6 million calls and 5.5 million puts traded so far.Bullish FlowAK Steel (AKS) is up 95 cents to $14.25 after Goldman raised the steelmaker to Buy from Neutral. Options volume is running 2.5X the average daily, with 25K calls and 2600 puts traded so far. Most of the action has been in smaller lots, with the exception of a buyer of 5000 September 15 calls at 90 cents and a buyer of 5000 December 15 calls at $1.73. Volume in those two contracts is more than 6000. Meanwhile, implied volatility is up 5 percent to 61 ahead of a July 27 earnings report.Complete Story »

Kenneth Hackel submits: At the end of last year, to avoid having to consolidate its investment in Globalfoundries, which, if undertaken would have harmed its financial results and balance sheet, AMD took the unusual step of renouncing its control in that large enterprise.Adopted by FASB in June, 2009 for adoption beginning in 2010,FAS 166, Accounting for Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46 (R), changes the method by which entities account for securitizations and special-purpose entities. FASB 166 relates to the consolidation of variable interest entities, and 167 amends existing guidance for when a company “derecognizes” transfers of financial assets. A variable interest entity is a business structure that allows an investor to hold a controlling interest in the entity without that interest translating into possessing enough voting privileges to result in a majority. The new standard requires noncontrolling interests be reported as a separate component of equity and that net income or loss attributable to the parent and noncontrolling interests be separately identified in the statement of operations.Under this recent accounting rule dealing with variable interest entities, which took effect this year, AMD would have been required to consolidate Globalfoundries' debt and income into AMD. By renouncing its control, AMD is merely required to state its investment as a single line entry, even though it may be partially or wholly on the hook for a share, or all, of its debt.Complete Story »

Hickey and Walters (Bespoke) submit:
Below we highlight the performance of S&P 500 sectors from the market's 2010 high (4/23) to its July 2nd low as well as since July 2nd. As shown, the Financial sector is up the most since July 2nd with a gain of 10%, followed by Materials (9.5%), Technology (7.8%), and Energy (7.6%). The Financial sector was also down the most during the correction. The four defensive sectors -- Utilities, Consumer Staples, Health Care, and Telecom -- have all underperformed the S&P 500 since July 2nd.click to enlargeComplete Story »