When smart investors consider a stock, they look at profit margins, revenue growth, and a raft of ratios to decide if it's a good buy. But beyond those measurements, here's a subtle and simple guideline that can give you real insight about a company's prospects: How honest is its management?
Yes, Call of Duty: Modern Warfare 3 posted a new sales record last week. But Activision Blizzard just can't keep a hold on fickle gamers. Guitar Hero hit a high note, then went silent, and now World of Warcraft is losing population fast.
Wall Street is whispering about the "Hindenburg Omen," a technical indicator that's supposed to signal an upcoming stock market crash. Some brokers are warning their clients. Others dismiss it as too much drinking.
As results roll in, earnings are beating expectations, but revenue growth is lackluster as the economy slows. So despite upbeat analysts, investors should be vigilant about earnings quality.
It sure didn't feel good getting here, but Wall Street kicks off Monday on a two-week winning streak. It's enough to make even a bear like Peter Costa, president of Empire Executions, say he's encouraged by the market's resilience. (With video)
The irrational despondence that set in during the grips of the downturn is now giving way to unfounded exuberance. The most concrete sign of that now: Analysts expect S&P 500 companies to rack up earnings increases next year at an unprecedented rate.