Monday, June 24, 2013

That's the news

In a world of uncertainty cash is king.
Well, no.  In case nobody noticed, the world is always an uncertain place and if you kept your money in cash, your returns would be, well, 0.  The one thing that investors should always remember is that higher returns = higher risk.  Unfortunately, most investors don't seem to realize there's risk in stocks until it's too late.  Now that I've got the preaching out of the way, though, it's time to get optimistic.  Perhaps this is what those sidelined investors have been waiting for.  The only question is, "How far does the market have to drop?"  Okay, that's not the only question.  But, it's the one I'm asking right now.

Financial crises may call for easier monetary policies: Fed's Dudley

The Taylor Rule governs the relationship between economic slack and inflation, and assumes a 2.25-percent real interest rate when policy is neutral. But Dudley said that rate is likely "considerably lower" if financial instability is impairing the effectiveness of Fed policy.
So, as near as I can tell, this is saying that most of the "rules" are changeable depending on current conditions.  Unfortunately, most people don't see it that way.  A rule is a rule, well, unless it's a law and you're a congressman.  For what it's worth, I've never seen an economic rule that holds no matter what the conditions are.  So, nothing new here.

The Fed "needs to be willing to respond to limit financial market bubbles from developing in the first place," Dudley said.
I wonder how long it took for anybody to come to that realization.  Hmmm.  Limit financial bubbles from developing in the first place.  Nah, it's way more fun to wait and see what happens when they pop.

Analysts Weigh Nike’s Prospects Ahead Of Earnings
I wasn't so much interested in what this article had to say about Nike, but more about what the implications might be for The Finish Line (FINL).
On the positive, basketball continues to be a key growth driver, while running, after having decelerated, is showing improvement; however, higher price points (e.g. $160 Flyknit) seem to be pressing the limits of consumer demand. That said, growth in running is being helped by the increased distribution in run specialty stores as opposed to the mall.
Although FINL operates in mall-based specialty stores, the company is more focused on running, and does run some running specialty stores which are not mall-based.  I'm not sure that being "mall-based" is a key issue anyway.  At any rate, it appears this should be somewhat of a positive for FINL, although I don't expect anything particularly great from the next quarter's results.  

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