Shah Gilani's Archive

The country’s biggest too-big-to-fail banks have all reported second quarter earnings and the results were chock full of good news and bad news, depending on the bank and its banking model.

What the banks’ earnings, profits and losses tell us about the economy, about their health, and about the outlook for their stocks gives investors a window into the economy and how to play the banks.

A window into the economy…

The stock market’s risen like a bat out of hell since bottoming out on March 23, 2020.

Remarkably, the institutional benchmark S&P 500 is up 43% after being hit by the coronavirus pandemic.

And while there’s still no vaccine for Covid-19, as the country sees dangerous spikes across 32 states, with mayors and governors again calling for businesses to shut down, as the additional $600 per week unemployed workers were getting runs out, the stock market looks clearly poised to go higher.

Here’s where we’re at, what hurdles are left to jump over, and why we’re headed higher.

With markets working themselves higher last week, higher since the March lows, higher forever for the Nasdaq Composite, you could say the good news is behind us and what’s up next will be weightier.

When I say good news, I’m not talking about the bad news all around the country showing dramatic and frightening coronavirus spikes, I’m talking about most of the economic indicators coming out ahead of analysts’ expectations over the past four weeks. Not all of them mind you, but most of them.

Why? Because analysts knocked down every number, every expectation, every hope they had.

And they were wrong. They were too pessimistic.

Is it too late to buy the FAANG stocks, Facebook, Apple, Amazon, Netflix, Google, and Microsoft?

In a word, “no.”

But with their valuations peaking, concentration in them at all-time highs, and pushback from advertisers, regulators, and politicians mounting, an increasing cadre of skeptics and analysts think their run’s about over.

Let’s examine the bull case and bear case for these mega-cap tech darlings and why it’s not too late to buy them.

Most importantly, I’ll show you how to make money on them going up if you don’t own them, and why and how to buy them lower if they come down.

Everyone knows shopping has changed forever. Online shopping is in, bricks-and-mortar stores are out.

Maybe not forever, but with cities, counties, and states prone to stay-at-home orders, no thanks to the coronavirus pandemic, shopping in physical stores is less appealing than ever.

Shopping malls, with their higher density, which get closed quicker than standalone stores and take longer to open, have been hit even harder by the pandemic and changing consumer habits.

For malls, suffering systemically, it’s the end of an era and the end of the line for many of them.

However, that doesn’t mean that there isn’t opportunity in their downfall…

Last week, equity markets roared back to life in a shortened trading week. The Dow Jones climbed 3.2% on the week, the S&P 500 climbed 4%, and the Nasdaq Composite climbed 4.6%.

That healthy rise came on the heels of the previous week’s losses, which came on the heels of the previous week’s gains, which came on the heels of the previous week’s losses. Which collectively amounted to a lot of sideways, go-nowhere action for the Dow, the S&P, and the Russell 2000.

But not so for the Nasdaq Composite, which just keeps defying gravity.

The back and forth in equity markets has been about risk-on versus risk-off, which has been about Covid-on versus Covid-off, which forces the fight between stimulus-on versus stimulus-off.

Of course, the Nasdaq Honey Badger don’t care; it keeps eating capital inflows and getting fatter.

To celebrate your financial freedom this Fourthwsq of July I’ve got five dividend paying stocks you can retire on.

You’ll know they’re great recommendations if you read my last two Total Wealth articles.

In the first article of this three-part series I showed you how to look through a few simple, easily found metrics to determine if a company’s dividend is safe, and by how much.

But you won’t have to do any calculations today, I’ll give you the safety-stretch numbers.

In the second article in this series I told you how trillions of dollars of buybacks are going to be converted to dividends in the future. Because the public’s outraged at companies manipulating their stock prices higher to compensate executives while workers’ wages stagnate. Because politicians are going on the warpath over the same issues and how the last tax cut juiced up buybacks by another trillion dollars. And because dividend payments are good for shareholders and the economy.

Here in the third and final installment in the series are five dividend paying stocks you can retire on.

Investors looking for good dividend yielding stocks don’t typically expect much price appreciation.

That’s going to change, probably sooner than anyone expects.

Here’s why dividend paying stocks have been playing second fiddle to growth stocks, what really drives growth, and how one all-important manipulative “growth factor” is poised to be flipped over to the benefit of dividend paying companies and their stockholders…

In case you missed it, last week the Fed fired a warning shot across the bow of investors who’ve won the bet, so far, the stock market would enjoy a V-shaped recovery and the economy would follow suit.

No, the Fed didn’t upset the applecart on Wednesday. The market tested itself on Wednesday when fear of rapidly rising virus spikes in Arizona, Texas and Florida triggered profit-taking.

The Fed didn’t upset the market on Thursday either. It actually helped stocks rally on the heels of Wednesday’s selloff when it announced all its children, the banks it shepherds, all passed their stress tests.

Banks rallied nicely on Thursday as investors cheered the good news.

But it was fake news.

If you’ve been searching for yield in the bond market you know there’s not much out there to be had.

Good thing there’s another market where you can find good yielding investments. I’m talking about the stock market.

Hundreds of listed companies pay dividends to their stockholders.

It’s not hard to find lots of big dividend paying stocks in the market, including some really fat yields that look too good to be true.

That’s because some of them are, too good to be true, that is, which means probably too good to last.

Here’s how to tell if a dividend yield is realistic and repeatable.