WorldCom was destined to be part of the new generation of telecoms that dominate the U.S. Companies like Verizon, T-Mobile and Qualcomm, giants that to this day appear on the watch lists of stock traders. So what happened to a company that had a market cap of over $175 billion at its peak? How could…
George Santayana once said that “those who cannot remember the past are condemned to repeat it”. Apparently, humans are not the remembering type. For example, every time we declare that a new economic crisis is impossible, it strikes us harder than ever. Then we are always wondering where did it came from. As Mark Twain put it “ history does not repeat itself, but it often rhymes.” And that is why we have to learn from it.
The Dotcom Bubble and Bust of 1995-2002
In early August 2018 we came across an article saying that “..stocks are as pricey as they were during the dotcom bubble”. This made us reminisce about one of the largest drops in the U.S. stock market’s history, especially for the NASDAQ. But what exactly caused the Dotcom Bubble and where are the companies involved…
Enron – One of the Biggest Stock Market Scams of All Time
In 2001 Enron Corp. was one of the high-flying U.S. corporations. An innovator, a leader with an impeccable team at the helm and with billions coursing through its veins. The company was the pioneer in introducing several crucial changes in the energy sector which was liberalized in the early 90s. Enron was the first and…
Bitcoin is Not a Bubble, Because… Oh, Really?
Bitcoin is everywhere you look these days. From bank officials, to hedge fund managers, to IT specialists, people with different professions, level of education, interests and investing experience are talking about Bitcoin. And who can blame them – the virtual currency is conquering milestone after milestone, climbing from $8000 to over $11 000 in just…
Cigna: Fundamental Analysis Simply Not Enough
Cigna Corporation has been one of the wonder stocks of the last 8 years. Shares of the health services organization gained from as low as 8 dollars a share in November, 2008, to as high as 170.68 in June, 2015. We are not even going to calculate those gains in percentage points. “A lot” is…
What Do Oil and Tulips Have in Common?
If we need to provide a definition for a “market bubble”, we would describe it as a part of the economic cycle, which characterizes with a rapid and often irrational expansion of the market, accompanied by a an unprecedented surge in prices, driven mainly by optimism and euphoria about the future, followed by an unexpected sharp contraction…
ECB’s Quantitative Easing (QE) and Velocity
Why ECB quantitative easing program may not achieve the much needed results? If we follow the economic theory, an increase in the money supply should cause inflation and therefore price inflation. But here comes the tricky part. Most economists do not make the difference between these two concepts. Inflation is an increase in the overall money…
The Wave Principle and “The Panic of 1907”
Have you ever heard of “The Panic of 1907”? Before the Great Depression of 1929-1933, 1907 was known as one of the worst years in the history of the stock market. Needless to say nobody saw it coming when the Dow Jones Industrial Average climbed above the 100 dollar mark for the first time in January 1906.…
The “Black” Days In Market History
This article is an overview of the “black” days in market history and has its task to explain what happened then, why people called them “black” and why investors will always remember them with fear and caution. Once Mark Twain said: “History doesn’t repeat itself but it often rhymes”, that is why we find it…
Is the FED controlling interest rates?
Here is a chart of the 10-Year Treasury Note all the way from 1981. The downtrend is over, marked with an ending diagonal. The rise in interest rates will continue as we see a sharp impulsive rally, typical for ending diagonals, signaling a reversal and symbolizing the new trend. The hidden engine behind the market…
Black Wednesday
The day when the British government was forced to withdraw the pound from the European Exchange Rate Mechanism. The date of the Black Wednesday crash was September 16, 1992, and five years later the UK Treasury estimated that the loss from that day was around £3.14 billion. The picture shows us how Bank of England…
What is credit inflation?
This chart contains some of the worlds biggest indices. It clearly shows, that every other country except the USA is still trying to recover from the 2008 crash. Even countries like China and Germany are still struggling and can not come close to the point they were before the crash. On the other hand the…
