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This and That: Market melt-up edition

May 7th, 2009 · 11 Comments

Canadian Money Forum Thread of the Week: Should you have an emergency fund? What about a line of credit instead? What is an emergency anyway? Join the discussion in this thread by registering in the forum.

  1. The strong stock market rally of the past eight weeks has some worried that it is running on “fumes of optimism”. I think that easing credit conditions is a far more encouraging development.
  2. It is outrageous that many CEOs walked out generous cash bonuses, stock options and golden parachutes when shareholders were wiped out. Jason Zweig pointed out that some companies are devising incentives for top management that are better aligned with outside investors.
  3. It has been a bad year for dividends but surprisingly, 70 companies in the S&P 500 have initiated a dividend or increased their payouts. Still, the dividend cuts have swamped the increases.
  4. Million Dollar Journey crunches the numbers to find out how much you need to save for an early retirment.
  5. Hat tip to the Globe and Mail’s David Berman for mentioning this post in his take on the DALBAR study update in the Report on Business MarketBlog.
  6. Jon Chevreau’s wrote a post and a column on a tweetable financial plan: Lose debt. Join pension. Own home. Spend little. Save tons. Invest wisely. Be tax wise. Marry 4 life. Insure life. Make will.
  7. Larry MacDonald says that car makers and dealers are offering substantial sales incentives to deal with plummeting car sales.
  8. Preet notes that a “fee-based advisor” doesn’t necessarily mean a better advisor.
  9. Michael James says that short sellers are like runners in a downhill race who choose to run uphill instead.
  10. My Findependence Day on his favourite lesson from the market crash.

For the moms out there, Happy Mother’s Day! Have a great weekend everyone!

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11 responses so far ↓

  • 1 Michael James // May 8, 2009 at 12:42 am

    Thanks for the mention. I’m not too surprised from Zweig’s column that giving bonuses to CEOs based on growth in book value has worked out well. From Buffett’s annual reports, this seems to be how he judges his own performance.

  • 2 mfd // May 8, 2009 at 5:24 am

    Thanks for the mention CC. Enjoy your weekend.

  • 3 Million Dollar Journey // May 8, 2009 at 8:15 am

    Thanks for the link CC!

  • 4 Jon D. // May 8, 2009 at 10:24 am

    Fortis, TransAlta and Telus are some of the Canadian companies in the TSX60 who have raised their div’d in 2009.

    Also, yesterday Manulife announced they are removing all fees from their DRIP & SPP plans:
    http://www.newswire.ca/en/releases/archive/May2009/07/c9309.html

    Regarding CEO payouts, watch this nice Marxist interpretation by Richard Wolff:
    http://www.mediaed.org/cgi-bin/commerce.cgi?preadd=action&key=139&template=PDGCommTemplates/HTN/Item_Preview.html

  • 5 Canadian Capitalist // May 8, 2009 at 10:40 am

    Thanks for the info Jon. Interesting, I haven’t been following Canadian dividend increases…

  • 6 Phil S // May 8, 2009 at 3:48 pm

    I would describe my outlook as “cautious optimism”. While I have been buying into this market, I’m not buying “everything” such as index funds and their ilk. I’m being very selective to only buy stocks whose earnings have been unaffected (or going up) by the economic downturn, resulting in ridiculously low P/E ratios.
    I will admit that using my method, I didn’t catch the “bottom” because I waited until I saw the 2009 Q1 reports before deciding upon the health of the company. Trying to pick stocks BEFORE the earnings data comes out is more like guessing than investing based upon quantified values.

  • 7 WhereDoesAllMyMoneyGo.com // May 8, 2009 at 5:51 pm

    Thanks for the link CC – have a great weekend!

  • 8 RR // May 8, 2009 at 7:22 pm

    The rally has been quite amazing to watch over the last few weeks… anybody heard any news on Derek Foster lately?

  • 9 Canadian Capitalist // May 10, 2009 at 5:45 pm

    @RR: I agree. I don’t recall as impressive a rally as this. The surest way to look pretty stupid in retrospect is to make forecasts about short-term stock market movements. I do think that Derek Foster is simply a retail investor who panicked and sold and it does look like a bad move today. In the future, who knows?

  • 10 Phil S // May 10, 2009 at 9:29 pm

    @RR: LOL @ Derek Foster comment. The last post that CC had on the Derek Foster story was that he cashed out as the market was crashing.

    The odd thing is that stocks are rebounding while the economic data in the USA is still very grim. I know that statistically speaking, the stock market rebounds on average 6 months before the arrival of positive economic news… But wow, I’m not sure that we’ve seen the worst of it yet. I mean, Chrysler just shut down. GM may be about to go through the same thing. It doesn’t matter what our opinion is on those companies, the reality is that those thousands of pink slips will yet register some sort of impact on our economy.

  • 11 Jon D. // May 10, 2009 at 9:44 pm

    Good piece on financial advisor myths in Canada on CBC:
    http://www.cbc.ca/sunday/2009/04/041209_3.html

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