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Market Wrap-Up for Oct.10 (CVX, CMI, YUM, COST, GE, more)
10/10/2012 4:40:00 PM
We got our first taste of multiple Q4 earnings reports this morning, but the market could not climb back from its recent slump.
Looking at some companies that reported numbers today, investors cheered the results from Yum! Brands ( YUM ) and Costco ( COST ). On the flipside, the reactions weren't as positive for Alcoa ( AA ), Chevron ( CVX ) (company cut its outlook), and Cummins Inc. ( CMI ) (which also announced job cuts).
Wall Street analysts were busy, upgrading stocks like Ralph Lauren Corp ( RL ) and M&T Bank ( MTB ), helping boost those shares to end in the green today. In contrast, a bit of cautious analyst commentary had stocks like Qualcomm ( QCOM ) and Johnson Controls ( JCI ) moving lower.
What's My Role? (Am I the Bull or the Bear Today?)
I have been closely following the big controversy surrounding comments made by former General Electric ( GE ) CEO Jack Welch. Mr. Welch recently insinuated via Twitter that the recent Friday jobs number reported by the government may have been inaccurate. (For the record, throughout my career, I have always taken governmental economic data with a grain of salt. Ignoring it totally, however, would be a mistake, since the data always helps move the markets one way or another.)
With the Presidential election in focus this year, many folks will take stances claiming conspiracy theories or conflicts of interest. Of course, we all know any time politics is involved in a conversation, emotional reactions tend to not be too far off.
Anyone that reads my newsletters knows I shake my head often regarding today's mainstream media and its "cheap pop" tactics used to generate ratings. Don't get me wrong, there are plenty of talented people out there who produce great commentary for viewers, but I also see a whole lot of "amateur-hour" work as well. In some cases, I look at the information as no better than local news coverage. Anyone that relies on the local news to break down economic and business stories is likely going to get nothing more than a generic, watered-down, ill-informed overview of where things stand.
I have witnessed many super-smart market watchers get sucked into the media vortex over the years, distracted by sensationalist headlines. The idea for most business channel segments is to present conflicting opinions on events that have recently unfolded or may be set to unfold soon. Turning on your business media platform of choice, it is commonplace to find the bull/bear debates happening, similar to politics-focused programming. Several people will be talking over each other, sometimes to a point of on-air screaming. As the viewers sit there mesmerized, the fact of the matter is whatever knowledge is discussed gets overwhelmed by the theatrics of the guests.
Most of our Dividend.com readers have an investment time window that differs greatly from what the mainstream business media seems to target. We dividend investors look forward a lot further than just 3 hours, one day, or one week. We don't care if the news is good or bad, but rather, we want an objective opinion on what to expect going forward. Also, accountability is essential if one is to build a trust in whatever or whomever the source is. In this era of information overload, finding all the vital points necessary to formulate a solid investing plan is truly what investors deserve.
Here at Dividend.com, we try and avoid the many pitfalls of the mainstream media. We certainly will take all the noise in (as excruciating as it can be at times), but we don't ever believe investors should react to any of it. Being the main filter for tens of thousands subscribers is what we do best (and we'll continue to do so, conspiracy theories and conflicts of interest aside).
Bottom line, market watchers will always have strong opinions. It's our job to avoid overreacting to these media theatrics, as such actions could do serious damage to our portfolios.
An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our Best Dividend Stocks List are the names we currently like for new investor capital, regardless of what date the stock was first recommended on. If and when a stock is removed from the list, we will clearly state whether the stock should be sold (which is rare but occasionally will happen), or simply held in one's account until we see a better entry point or catalyst.
And here's one last thing to remember about what we do here at Dividend.com: it's not just the names that we recommend that can help you build wealth, but also the things we try to steer you away from that are just as important. Forget about speculative or penny stocks, chasing unprofitable IPOs, and listening to the manic talking heads in the business media!
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Thanks for reading everybody. I'll see you tomorrow!