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political action committees (PACs). There’s one other factor that allows for incumbent re-election victories: political action committees (PACs). PACs are entities that collect corporate and large donor contributions into one spot then decide where that aggregate money goes – meaning… to whom. Their plan is to get the biggest bang for their buck. And they do that by giving the lion’s share of their dollars to incumbents. That's because they get a surefire bet, with congressional re-election rates around 90%. And it’s not just corporations but labor groups that heavily give to incumbents, too, at $41 million. The only group that tends to bet on political newbies is a single-issue one, and even when compared to the money spent to re-elect politicians ($65 million), this still makes up a small fraction ($16 million). As you can see here, a large proportion of PAC money comes from Wall Street (as represented by the finance, insurance and real estate, or FIRE, line), at $69 million. Nex

While the market can go down and stay down for extended periods, it's up substantially from each of those disasters. Or to put it in perspective... From its lows in 1974, the S&P 500 is up nearly 7,000%.  So much for the death of equities .   BusinessWeek   magazine ran its infamous headline, "The Death of Equities," with the subtitle, "How Inflation is Destroying the Stock Market"... But look at what the S&P 500 did in the next two decades after that  BusinessWeek  issue... I was at TheStreet.com working alongside Jim Cramer in 2000 when the dot-com bubble burst. I remember the panic well – from its peak in March 2000 to the bottom in October 2002, the tech-heavy Nasdaq Composite Index collapsed 78%. But over the next several years leading up to the next crash, take a look at the recovery... The point here isn't calling tops and bottoms... I'm saying that I've been there, I've seen it all, and now that I'm 70, I'm taking everythi

A voiding stocks entirely can mean missing out on big gains in the future. Just consider the numbers... According to JPMorgan Asset Management, if you had invested $10,000 and missed the 10 best days from 2002 to 2021, your gains would have been cut by more than half. If you had missed 30 days, you would have missed out on more than 80% of potential gains.

 Buybacks are no new ideas This week, energy giant  Chevron  announced plans to buy back  $75bn  of its shares, five times the oil giant's current  buyback plan , along with an increase in dividend payouts. A prevailing theme from our  2022 in 5 charts  was how it was the year for  stuff-that-comes-out-of-the-ground  — with  Chevron's  oil and gas clearly no exception.

 Egyptian pounds is super cheap Burgernomics The Economist   has published its bi-annual update of one of our favorite pieces of data analysis: the  Big Mac Index . Apart from telling you how much a  McDonalds  burger will cost on your winter vacation, it’s also a lighthearted test of the economic theory of  purchasing power parity  (PPP) — the idea that exchange rates should settle at a place where identical goods and services cost the same in every country.

Switzerland-based chipmaker STMicroelectronics Switzerland-based chipmaker STMicroelectronics N.V. (NYSE: STM) gapped 7.75% on January 26 after significantly topping analysts’ views for fourth-quarter earnings.  The company earned $1.32 per share on revenue of $4.42 billion, topping analyst views of $1.13. Wall Street had expected ...

Still room for a week or two of profit Earnings helped boost the market higher as well.  Companies like Tesla (TSLA) surged 10%, which helped lift the other tech stocks.  Chevron (CVX) rose nearly 5% after earnings and the announcement that it would raise the annual dividend and spend $75 million in stock buybacks. Where does that put the broader market? Here’s a chart of the Dow Jones Industrials (via ticker DIA).  I’ve also included the Williams%R indicator.  I’ve written about it before - it’s a momentum indicator that moves between 0 and -100.  A reading above -20 is overbought and we’re sitting at -29 right now, which means we could have more upside room to go.   You can also see on the chart that an overbought reading on Williams%R doesn’t mean the trend is over.  But it gives you a warning of a potential reversal.  The two areas in the middle of the chart had an extended overbought reading as the market continued higher.  That could happen again, but we’re getting close to a lon