They finally did it! You can click on the picture to see it...

Where will investment dollars flow?

It seems many bloggers read The Trader Wizard written by Bill Cara. He has a lot of experience and a lot of insight. If I am reading his stuff correctly, he seems to be very pessimistic about the US markets for the foreseeable future. He and I share similar concerns about what could hurt US stocks but I believe he comes to a more negative conclusion than I do. The US financial markets not doing well brings up some interesting questions, most importantly is where will investment capital that is fleeing US stock and bonds go to? Some of it I’m sure will go into money markets and t-bills, but being too conservative can be as bad as being too aggressive. If you have been too conservative it will be inflation that will hurt you. Investment capital, I believe, will have to find a place to invest. If the US gets knocked off of its perch somehow for some reason I have to believe it would be to the benefit of some other country or region. We all know China will one day be the largest economy on the planet so it makes sense to find a way to benefit from that and have at least a little exposure to China. That might mean Chinese equities, or investing in one of China trading partners (like Australia), or having exposure to the resources that China is consuming. There are probably other ways I am not thinking of too that could help you capture the effect of China. Ditto India. The Trader Wizard lays out a very compelling case for owning...

AT LAST!

Boston.com In case you missed it the Red Sox won the World Series last night by completing a sweep of the St. Louis Cardinals. I can’t begin to articulate the joy I am feeling. This coming after one of the greatest sports comebacks in history when the Sox beat the Yankees. Being a Bostonian I am also a Celtics, Pats and Bruin fan. I was five years old the last time the Bruins won, but I have lived through many Celtics championships and of course two Super Bowl wins but the Red Sox win feels different. The plight of the team and the fans is unique in sports. One thing that separates the Sox from other teams, I believe, is the unusual closeness of the players. Kevin Millar should get a lot of credit for this. He is a good player, not great, who knows how to fill his role on the field. In the clubhouse he may be one of the all time greatest palyers, I am serious about this. As a group they are all exceptional, I hope one of them writes a book that captures what I am talking about. I also think the selfless nature of this group can be a lesson for the rest of us too, at least it is for me. I think if you read this blog, even if you think I am a complete nimrod, it should be clear that I love all things pertaining to capital markets and I enjoy writing about them equally as much. I like sports even more. That’s how big of a deal this is....

Rally Rally

Is this it? Is the market all better? Could be but I think we need to see the S+P 500 make a higher high than what we saw three weeks ago. We have seen a series of lower highs for months now. I think we should hope for a higher high. What was nice today was the internal action of both the listed and NASDAQ markets. Both had volume above 2 billion shares. Advancers vs decliners was 1942/854 for the NYSE and 2091/906 for the NASDAQ. Up volume vs down volume was 1741/457 million on the NYSE and on the NASDAQ it was 1736/352. All in all good numbers. I wonder if there are any Dow Theorists out there that are concerned that the Utilities were down and the Trannies lagged the broader averages? I am not a huge Dow Theory guy myself, but it caught my eye that Utilities did so well early in the week but not today. Over the weekend I wrote that the market was probably oversold, now it feels like we are overbought but I hope I am...

Brazil Fund VS Brazil iShares

Today I wanted to continue my ETF connect series by comparing the Brazil Fund (BZL) and the Brazil iShares (EWZ). First I would point out that there is a lot going on in Brazil with respect to growth, natural resources, trade with China and India, and an evolving financial system. I have invested in Brazil both personally and for clients using individual stocks only. While I have been successful both times I have traded Brazil, I can’t discount the possibility that I benefited more from luck than skill. Energy makes up roughly 26% of both funds. Materials (mining names are included here) makes up 31% of the iShares and 25% of the closed end. Financials make up 11% of both funds. There are also similar weightings in telecom and food related stocks. So it should be no surprise that the performance has been almost identical with the nod going to the iShares, no doubt because of the lower expense ratio (0.74% vs. 2.04%). Petroleo Brasileiro (and its preferred issue) and Companhia Vale do Rio Doce (and its preferred issue) make up 38.5% of the iShares and the common class of those two names make up 41.5% of the closed end. One difference is the dividend. The iShares only yields 0.8% but the CEF yields 2.08%. Often, emerging market stocks pay a very healthy dividend. If you own either the ETF or CEF you may be getting less yield than you could by owning an individual name like Companhia Vale do Rio Doce which yields about 4.5% according to Yahoo finance or Petroleo Brasileiro which yields 4.2%. Keep in mind...