Value Line’s Timeliness rank is the proprietary ranking system that Value Line has developed. The Timeliness rank is from 1-5 with 1 being the best, 2 being above average, 3 being average, 4 being worse than average and 5 being the worse.
Here is what Value Line states on their website:
A stock portfolio of #1 Ranked stocks for Timeliness from The Value Line Investment Survey, beginning in 1965 and updated at the beginning of each year, would have shown a gain of 22,062% through June 2008*.
That compares with a gain of 1,145% in the Dow Jones Industrial Average over the same period. VALUE LINE #1 RANKED STOCKS OUTPERFORMED THE DOW BY MORE THAN 19 TO 1*.
This gain would have beaten the S&P 500 by nearly 16 to 1 for the same time span.ne-year holding periods in Value Line’s 100 Top-Ranked TimelinessMstocks
Below is a chart showing the returns from Value Line’s Timeliness rated stocks. Group 1 is the best performance and Group 5 is the worst performer.
The returns are based on rebalancing the portfolio every year. Dividends and commissions were not included in the calculations.
Based on the great performance of this, some ETF’s have been created to try and mimic the performance of this.
PowerShares Value Line Timeliness Select Portfolio (ticker: ... Read More
I see a problem with this statement that the market is always forward looking. Recently, companies around the US have been laying off employees.
Stock prices have gone lower as people expect things to get much worse. As a result, some people cut spending, sell assets and stocks. This is forward looking.
However, as the recession grows, the market may go from forward looking to one that is based on current needs. When the economy gets worse and unemployment is near its peak, funds will ineviatably be tight for a great number of people.
In such a case stocks will go much lower as people try to raise money to pay for living expenses. When the stock market goes lower, the outside observer that believes that the market is forward looking may believe that the low stock prices are a forecast of the future when in reality it is what is going on currently.
... Read MoreThe United States is made up of mostly non natives, many whom have evolved in much different environments. Europeans that have genetic variations towards cool weather have moved to the warm south western and southeastern areas of the US. Others such as Asians have moved from warm, tropical areas to dry desert areas or cool areas of the US.
It is relatively easy for people from people from many different regions to survive in the US because of the business systems created in the past such as the industrial revolution and the agricultural revolution.
The result of this is it eliminated hunting and gathering as well as many small farms. These things helped to increase our population but have created other problems in the process.
In a hunting and gathering society, harmony with the environment was required. Over hunting one year would mean less food the next year, so careful attention must have been made as far as only hunting what was necessary and nothing more.
If mistakes were made, the system would correct itself. If too many animals were killed, the group may have gone hungry the next winter or died. In a hunting and gathering society, there was a checks and balances system in place.
Move forward to today and we see that things are much different.The environment does little to control us. We control the environment. We use enormous amounts ... Read More
This jump in price was caused after Porsche announced over the weekend plans to increase its stake in Volkswagen from 42.6% to 75%. With few shares outstanding (less than 5%) and a potential increase in the stock price as a result of Porche buying stock, many short sellers decided to close their positions and buy back the shares.
The result of this was a short-squeeze. Friday the shares were trading at $57 and when Monday trading opened, the shares were trading at $95 a share. This continued until Tuesday when the stock peaked at $230, surpassing the value of all of the automakers combined.
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... Read MoreThe plan is to use the $700 billion dollars of newly printed money to purchase “distressed assets.” My interpretation of this is that these are loans where the people are late at paying or show signs that they will not be able to pay the mortgage soon such as ballooning debt or lowered credit score.
So the government is supposed to buy these “bad loans” from the banks then hopeful turn around and sell them in the future at a higher price than what they paid for them.
For sure these will be “bad loans” because the banks won’t likely want to sell good loans to the government.
The money paid for these bad loans cannot be too low, or the banks won’t receive enough money and the wrong message will be sent to the market. The government has been stating that they want to pay above
current values for these loans so that it sends a positive message and so banks have more money.
So, how can we make money at this if we cannot buy below market value for the loans which will most likely fail anyways?
As far as transparency goes, will the government know just how bad these loans are? If they purchase one home, for instance, will they find out that the person owning the home also has seven other homes
that he has defaulted on while only making $50,000 a year in income?
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From 1959 to 2007 the personal savings rate reached a high of about 11% in 1985 and has fallen since then until 2006 where it has been negative since. This means that Americans are spending more than they earn. Much of this negative savings was most likely people purchasing homes and drawing on home equity lines of credit. 
Now that the credit has dried up, and unemployment has increased, there will be downward price pressure on new jobs and probably existing jobs also as people work for whatever is being offered in order to try to stay afloat.
The good news is that this will help to keep inflation down. However, it won’t be enough to deal with the high costs of importing products. This is going to cause many Americans to get squeezed financially for several years most likely.
The good that will come out of this is that Americans are now going to have to start living within their means. They are now cutting back on discretionary spending which is effecting many different parts of the economy. Large car dealers are going out of business, furniture stores, pool ... Read More
Some areas of the economy will generally be less effected than others. One area are the utilitiy companies. These companies usually are local monopolies and are allowed to increase prices when their costs increase.
Electricity companies and gas companies are such examples. Even during a recession people will continue to use gas and electric. They may cut back to a certain extent but there are few competitors.
If a customer that has Nevada Power wants to lower his/her bill, he or she will have to use less electric. They can’t just cancel Nevada Power and go to anotehr company that is cheaper because there is only one company.
When Nevada Power wants to increase the rates, they will hold a hearing and it will generally be approved.
Also something that may help these companies is that both McCain and Obama have expressed interest in nuclear energy. These existing utility companies will most likely be the obvious candidates to be the companies to take on this task.
On the downside for these companies is the interest in alternative energy sources such as wind and solar power. These alternative energy sources would most likely hurt utility companies. However, a huge increase in alternative energy is unlikely to happen anytime soon due to the poor financials in the US. Alternative energy such as solar takes a huge investment with payoff ... Read More
The american economy has historically been based on freedom and capitalism. People and companies are free to make decisions. People are free to bet that stocks will go up or down. These decisions can lead to failure or success. When a business fails, it either goes bankrupt or is purchased by another entity.
What we are seeing now is a goverment that is picking and choosing who succeeds and who fails.
This is very similiar to how the Bush administration has hand picked christian run companies to run the war in Iraq and Afganistan. This is a form of corruption.
In addition to picking and choosing who succeeds or fails, the goverment has sided with the losers not the winners. AIG was apparently over leveraged and selling risky insurance products. Now the government is crossing its fingers and giving away taxpayer money hoping that the plan will work out.
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The goverment is so afraid of a recession that it is printing enormous amounts of money to try and stop the inevitable recession.$85 billion dollars of taxpayer money has been loaned to AIG. Much of this will most likely be lost.
They have even come up with a plan to spend nearly half a trillion dollars to purchase distressed mortages which will more than likely never be paid back.
They are even restricting freedoms such as short selling which is ... Read More
In the past when people had faith in the US dollar, simply keeping your idle funds in a checking account or money market account was fine. That was then, this is now.
The dollar should continue to fall unless something changes.
The US cannot continue to have trade deficits every year. The trade deficit every year in the US is about 700 billion dollars and gowing every year while China recently had a surplus of $180 billion dollars.
Warren Buffett has proposed that the US give [[import certificates]] to US exporters for the dollar amount of items that they export. Then the import certificates could be auctioned off to the highest bidder for the right to import that dollar value of goods. Such a system would make sure that has balanced trade.
The other problem haunting the dollar is social security/medicare and military spending. Until these expenses are cut significantly, the dollar will be weak.
So where should you put your idle funds? There are several options:
- Keep money in checking / money market acct (most likely lose money to inflation)
- Open Everbank world currency money market account (lose money in conversion fees)
- Open HSBC offshore bank account.
- Buy Euros or other currencies that are stronger than the dollar
- Hedge with a currency fund.
- Buy gold
- Buy ADR stocks or ... Read More
The US is in a awful financial state right now. Banks have been flooded with money from the Fed just to keep them afloat. All of this money is keeping the banks from collapsing but is also devaluing our currency. The result of this is inflation and it is rising faster than any official government estimate.
Many successful investors are looking outside of the US for investment opportunities. A couple of names you may have heard of are Warren Buffett and one of the co-founders of the Quantum hedge fund, Jim Rogers. Both have been seeking investments outside of the US.
The US dollar can no longer stand out as the currency of choice. Investors are now skeptical of the underlying value of the dollar and most likely will be more critical of it. The dollar for so long was propped up by the view that the US is the #1 country with the #1 currency.
The dollar has been off of the gold standard for a while now and the broadest measure of US money supply, M3 stopped being published in March 2006. With fewer hard measures on how to value the dollar, the less attractive the dollar becomes.
The dollar is no longer #1 and investors are looking elsewhere. This leaves plenty of room for the dollar to continue to fall. The deficit and the growing money supply makes the dollar a poor choice for an investment.
The result is a falling dollar and double digit ... Read More