Enodare et Illustrare
Introduction:
The Interactive
Investor presents research describing "How the U.S.
What's New:
Revised
Preface
“Economic
Growth in the U.S." (also an historic note on markets)
“Financial
Engineering and the Banks”
“How
the U.S. Stock Market Works" (rev.)
Investors:
click here for additional
7/1/10 comments on the market.
Comment:
Congress passed the
Financial Reform Act of 2010. It contains provisions regulating the kind and
amount of assets that banks can hold. The legislation incorporates a version of
the Volker rule that limits speculative proprietary trading to 3% of Tier I
equity and a version of the Lincoln amendment that moves most derivative
transactions to rule-based market exchanges. The bill does not focus on the
main reason why banks exist, to make sound loans to the rest of the economy.
But it is an improvement over the current state of affairs, reducing some
distractions and making the financial system somewhat safer.
Book
Reviews:
In Dealing
with Darwin (2005), Geoffrey Moore describes how businesses produce
innovative products and services. The reader may think of new products and new
markets. The fact is that companies must innovate in all markets: new, growing,
or developed, to fend off increasing commoditization and therefore decreased
profitability. During an era of globalization, a continuing cycle of innovation
and deployment is necessary for the U.S. economy.
This book is particularly relevant to value investors, as
it also investigates the process of innovation at companies operating in more
developed markets. The author makes a crucial distinction between companies
whose core expertise is designing complex systems, such as Nucor, and those
whose expertise is efficiency in volume operations, such as American Express.
The key to innovation in complex systems enterprises (or investing as a matter
of fact) is insight. Since each customer’s situation is unique and evolving,
implementation requires alignment around essential principles rather than
rules. For volume operations, on the other hand, implementation requires
alignment around exact rules.
Although it contains some confusing tables, this book
covers a lot of ground. Companies grow their sales for reasons; this book
discusses these reasons in very useful detail.
____
The July-August 2009 issue of the Harvard Business
Review discusses the many dimensions of the financial crisis and the
resulting transformations, what they mean for us in the future. Markets cause
change. The world-wide collapse of the financial markets will significantly
change the structure of the world economy, the management of companies, and the
regulation of businesses.
In “The Descent of Finance,” historian Niall Ferguson writes that the collapse of U.S. consumer confidence and the financial crisis in Western Europe have caused the first global recession since W.W. II. In that article, he sketches two different scenarios…
Continuing
Discussions:
These
discussions focus upon three major investment issues: valuation, that is the
profit potential of the stock market, company selection, and the macro
environment. By considering valuation, investors will be able to determine
whether the stock market has a sufficient profit potential to warrant the
purchase of additional stocks. By considering company selection, investors will
be able to identify companies that are likely to grow. These discussions also
emphasize the importance of the institutional environment, the context that
enables business planning for the future.
Click Here to Proceed
Other
Sites:
SEC Edgar Filings
CNN markets
Current
Economic Conditions:
Business Conditions
Economic Statistics
Capacity Utilization
Copyright © 2010 Horizon Capital Research, Inc.
topic: stock market valuation, market equilibrium, financial market behavior
Google PageRank Statistic