Some key earnings reports that came in stronger than expected pushed markets higher Friday, to end the week with a gain.
According to the Efficient Market Hypothesis (EMH), the best – and perhaps only – way to outperform the market over time is simple:
First, claim that beating the market over time is virtually impossible. Then, take home $1.2 million for “proving” it.
That was Professor Eugene Fama’s approach, anyway, after co-winning the Nobel Prize in economics.
90 years is the amount of prison time looming over each of three former ICAP employees. The men face charges of conspiracy to commit wire fraud and commission of wire fraud stemming from their attempt to manipulate the LIBOR rate.
Think of the housing market as a ladder with first-time homebuyers at the bottom and homeowners on the upper rungs, with homes priced higher as you proceed upward.
Everything runs on liquidity. Unless you know something I don’t, that dollar bill in your pocket is just as likely to buy a can of Pabst Blue Ribbon today as it was yesterday, and will be tomorrow.
Or you could sell 1,000 lbs. of gold – if you have that lying around – without fear of completely scuttling the global gold market. Your bank has to have cash, liquidity, lying around somewhere in the back if it wants to stay in business.
And in many cases, it’s easy to see or verify this liquidity. It helps everyone feel better about doing anything.
There’s going to be a lot of very heavy betting over the next few days, weeks, and months on what’s going up, what’s going down, and what’s going around:
- How far will Facebook IPO price go?
- How far DOWN from here will JPMorgan go, with the FBI and DOJ now sniffing around?
- How far AROUND the globe will the fallout be if Greece loses its game of chicken?
If you don’t have the stomach for what’s going to feel like an out-of-control rollercoaster ride, sideline yourself.
If, on the other hand, you like a lot of action, welcome to Mayhem – the preamble month to what will likely be the Summer of Some Discontent.
That is, unless you like rapid-fire trading.
Which, by the way, is not just fun, but can be very, very profitable. I’m in, and so are the subscribers to my Capital Wave Forecast. We’re gearing up for some heavy betting in the weeks and months ahead.
So, what’s front and center today? You know. The big three headlines: Facebook, JPMorgan Chase, and Greece. Are you sick of hearing about them? I’m not. I like trading the headlines.
Here’s my “heads-up” on the big three headlines.