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@theMarket: Higher Interest Rates Clobber Stocks
By Bill Schmick,
11:42AM / Saturday, February 27, 2021
In the grand scheme of things, a small, upward blip in the yield of the U.S. 10-year Treasury bond should be of little concern to equity investors. But sometimes, when the conditions are ripe, even the tiniest spark can cause a conflagration within a speculative stock market.   As readers are aware, interest rates have been trading at historically low levels for some time. The onset of the coronavirus forced our Federal Reserve Bank to pin them even lower. Essentially, it is why the stock market has been having such a great run. Investors have been conditioned to just assume that, if anything, interest rates might trend even lower but not higher. However, during the last few

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The Retired Investor: SPAC Attack
By Bill Schmick,
12:37PM / Friday, February 26, 2021
One of the hottest trends on Wall Street today is "special purpose acquisition companies" or SPACS. There is hardly a day that goes by without an announcement of a new SPAC, or the acquisition and merger of a private company by one.   It works like this. Even though they are called "companies," SPACs have no commercial operations, no sales, profits, or losses. All they have is a pile of cash. They received that money from investors in an initial public offering (IPO) with the promise that they would invest that money down the road into a private company with good prospects.   You are basically giving a blank check to a group of financial pros

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@theMarket: Stocks Versus Bitcoin
By Bill Schmick,
04:48PM / Friday, February 19, 2021
There was no contest this week. Cryptocurrencies took center stage as the stock market churned, chopped and gave investors a little indigestion. Welcome to the market's brave new world.   It appeared that Bitcoin was the answer to whatever ails you. Higher interest rates, the threat of higher inflation, weaker (or stronger) dollar, no problem just buy Bitcoin. By the end of this week, the crypto coin had chalked up a 15 percent gain and was trading above $52,000. Ethereum, Bitcoin's younger cousin, was also up 10 percent.   None of the financial market's usual suspects — stocks, bonds, or commodities — could come close to those kinds of

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The Retired Investor: Clubhouse Comes of Age
By Bill Schmick,
04:09PM / Thursday, February 18, 2021
The latest entrant into the social media orbit is an audio-only chat app called Clubhouse. The internet company had a $1 billion valuation before it had a business plan. That is even more surprising since membership is by invitation-only.   On Jan. 24, 2021, the company announced its latest $100 million fundraising effort, and for the first time presented a rough sketch of how it plans to start generating sales. Its Silicon Valley founders, Paul Davidson and Rohan Seth, are hoping to offer paid subscriptions, ticketed events, and other schemes to turn the site profitable.   You need to know an existing member in order to get an invite to join Clubhouse. Once you

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@theMarket: Financial Froth Infects Markets
By Bill Schmick,
06:24PM / Friday, February 12, 2021
One sure sign that stocks are getting overdone, is the actions of overconfident investors that bid up stocks in a euphoric frenzy, only to dump them at the first sign of trouble. These behavior patterns normally usher in a corrective stage in the stock market, but exactly when that will occur is anyone's guess.   Investopia's definition of froth "refers to a market condition where an asset's price begins to increase beyond its intrinsic value." Wall Street's "Reefer Madness" event this week is just such an example. Certain stocks in the Cannabis sector saw their share prices double and then triple in a matter of days. Penny pot stocks with

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