On August 15, 1971 something very interesting happened in the world of currency – the United States, under President Richard Nixon, removed the dollar from the gold peg. Foreign traders were able to redeem their dollars for gold at a rate of $35 per ounce. Nixon dropped the gold peg in the face of rising inflation and in response to other nations also leaving the gold standard set up in 1944 at the Bretton Woods meeting in New Hampshire. The event, known as the Nixon Shock, instantly devalued the debt and left the dollar as a fiat currency – with nothing backing it up. However, the dollar also found itself in a unique position as the reserve currency which other nations used to back up their own currency.
More on ‘AAA’ S&P Debt
Posted By Last updated August 11th, 2011 1 Comment
Here at DQYDJ, we retrieved Standard & Poor’s AAA ‘Domestic Ratings’ for sovereign debt on the morning of 8/11/2011. Here’s the list of ‘AAA’ rated sovereign debt issuers you have already seen at our site: Australia, Austria, Canada, Denmark, Finland, France, Germany, Guernsey, Hong Kong, Isle of Man, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, and the United Kingdom. We told you the other day that the only thing that really matters is the yield – the price at which a sovereign can issue debt. Let’s dig into that further!
Facebook vs the IPO
Posted By Last updated January 6th, 2011 1 Comment
(Updated with information on Facebook’s potential IPO in April 2012). Remember back just a few short years ago when the ultimate goal of a start-up in Silicon Valley was to either get bought out (by a public company) or to go public? The first internet bubble saw companies like Amazon and eBay make their debuts, but it also relegated other companies to the history books: iWon.com, pets.com, and Startups.com. As a result of new regulations and laws (a major piece being the Sarbanes-Oxley Act of 2002), an Initial Public Offering may not be the glamorous exit strategy it once was. A perfect example most of us have experience with? Facebook.
Oh No! Volatility!
Posted By Last updated May 27th, 2010 Leave a Comment
My friend sent me an article the other day which really summarized my thoughts succinctly – he sent me this piece from Evan Newmark writing at the Wall Street Journal. If you haven’t noticed the crazy action in the stock market in recent weeks and days, let me be the bearer of bad news: the major US indicators are down from their yearly peaks. You’ve probably lost some money on paper, even. Between oil in the Gulf, the Greece Drama, and even North Korea, there is a lot to be worried about. Here’s the thing – these are all known unknowns, and generally priced into the stock market already.
Headline Risk in Investing
Posted By Last updated January 13th, 2010 1 Comment
One of the more interesting risks you’ll face in investing in stocks (or bonds, or any security of a single company for that matter) is headline risk. Headline risk, as you may know, is the effect that news can have on a company (or sector, etc.). Often times, negative news which is only loosely related to a company can hurt it negatively. Of recent note: Tiger Woods’s “transgressions” on the companies that pay him to sponsor their products.
Market Timers Agree: Buy Stock
Posted By Last updated January 7th, 2010 Leave a Comment
What should you make about the Mark Hulbert article claiming that top market timing newsletters are bullish heading into the new year? After a 27.76% increase in the value of the S&P 500 (not counting dividends) in 2009, how much further does the stock market yet have to run? And what does a bullish consensus among market timers mean, exactly?
The Outperformance of the Big
Posted By Last updated November 17th, 2009 1 Comment
Yesterday saw a 1.45% rise in the value of the S&P 500 Index and a 1.33% rise in the Dow. The closely followed indexes have been strong in November, rising 5.53% and 5.09% respectively. However, they are being boosted by a weird trend – the outperformance of large cap stocks.
So, The Stock Market Is Up?
Posted By Last updated November 10th, 2009 Leave a Comment
Or is it? The Dow Jones Industrial Average increased 2.03% yesterday, on the surface a nice gain for the index. Rises such as that give confidence to investors that the worst is over and it’s time to work back into stocks. Let me briefly present the other side of that argument.
