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April, 2016 Archives

Richard's Thoughts on Life

By the Dow Theory Team

 

Richard's Comments

 

I started Dow Theory Letters in early 1956. I started it as a hobby, mimeographing the letter to friends at a cost of $15 per year.

 

Towards the middle of 1958 I was mailing out 50 Letters, many to people I didn't even know -- people who were friends of friends.

 

Towards the end of 1958 I became certain that the market was in for a tremendous bull movement. The more I studied the situation (and the black prevailing sentiment) the more convinced I was that the market was going to explode on the upside. In fact, I was so convinced that I showed Bob Bleiberg (then editor of Barron's) a few of my Letters, and I told him that I wanted to write an article for Barron's.

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Fed, Markets Align

By Matthew Kerkhoff

 

Central banks are in the spotlight this week, with the Federal Reserve’s statement yesterday, and the Bank of Japan’s policy decision today. Arguably two of the world’s most important central banks, let’s dig a little deeper into their actions (or rather, lack thereof) and the reasons behind them. Today’ we’ll focus on the Federal Reserve, and we’ll save the Bank of Japan for some other time.

 

Yesterday the Federal Reserve left interest rates unchanged, citing subpar performance in consumer spending, business investment and exports. They noted that growth in economic activity had slowed, and refrained from providing any details about the next possible rate hike.

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Daily Recap

Stocks breathed a sigh of relief as the Fed seems not inclined to rate interest rates soon, and perhaps not in June after all.  Global markets had already finished higher, with the Global Dow up a third of a percent.  

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Fickle Winds

by Jon S. Strebler

 

Writing this on a gorgeous Sunday morning, looking out through a big kitchen window at a farm B&B in England’s lovely Cotswolds region. I’m happy to be done with our 14-day Atlantic cruise. My wife, like so many others, just loves cruising, but I get bored quickly of reading, eating, walking the deck, eating, napping – repeat. The cruise itself was nice enough, with unpleasant weather only once or twice. One evening, seemingly out of nowhere, the winds picked up and the seas just went wild. But by morning, both wind and seas were totally calm. Bizarre and, in a way, reminiscent of how markets behave at times.
 

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Why are Companies Still Hiring?

By Matthew Kerkhoff

 

Companies are self-optimizing units, and they optimize with respect to the bottom line. As much as we would like to think of corporations as good citizens, the fiduciary relationship between management and shareholders revolves around one primary goal: maximize profits.

 

While there is an ongoing shift towards emphasizing the triple bottom line - an accounting framework incorporating three dimensions of performance: social, environmental and financial – these days, profits continue to steal the show.

 

Why, then, in the face of difficult economic conditions, are companies still hiring?

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Richard's Thoughts on Gold and the Dollar

By the Dow Theory Team

 

As far as I can see, there's only one "safe haven" in the rapidly changing world of today. It's an item that has served as a safe haven for 6,000 years. Because gold is the only item that can't go bankrupt, for thousands of years, gold has been treated as pure wealth.

 

It's an item that seems to be embedded in the DNA of mankind. It's an item that has allowed refugees to cross enemy borders and live. It's an item that inspired men to pack up, leave their families and head West. It's an item that inspired Spanish explorers to conquer parts of America.

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