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Fishing for Answers

It certainly was a couple wild days for the market while I was fishing Lake Okeechobee down in Florida. Gladly I was able to stay abreast of these important matters while also bagging a boatful of big bass.

The main culprit for the drop on Monday was a Goldman Sachs report outlining how they believe the market is overvalued by most measures. There is some merit to their points EXCEPT for the most important element. That being the value of stocks versus other investment alternatives... in particular bonds.

Their study went back 35 years. Meaning they started when the 10 year bond rate was at 9.1%. From there it went up to a peak in 1981 and has been on a downward course ever since. Meaning that in modern times, bond rates have never been this low and unattractive. Or real estate so lackluster. Or precious metals a non-factor.

I am NOT saying that stocks are cheap. I would say they are fairly valued pushing towards fully valued given the current environment. And yes, if that environment changes, then so too does my stock market outlook. Namely if 10 year Treasury bond rates climb to around 3.5% or higher, then the price of stocks will come under pressure.

For now the bull market is in place and the rise back towards the highs the last two days tells you that most investors are in agreement with that notion. However, it will be tougher sledding this year.

Gladly we know how to make money in these times by keeping a firm focus on earnings estimate revisions. That is especially true during earnings season as our earnings whisper system coupled with the Zacks Rank gives us a big edge over the average investor. Jared Levy covers this timely strategy in his new article:

QE & Earnings Warnings: Time to Buy?

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Bull & Bear of the Day

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Artisan Partners (APAM)

This asset manager has seen sequential growth in revenue in each of the 3 quarters they have reported.


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Ford (F)

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Video Reports

This Week's Growth & Income Stocks: (LAZ) (NHI)

Growth & Income Stock Strategist, Todd Bunton, highlights Lazard (LAZ) and National Health Investors (NHI) on January 14, 2014.

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Ideas for ETFs, Insurance and Wireless. Opportunities covered include iShares US Broker Dealers ETF (IAI), Gogo Inc. (GOGO) and Maiden Holdings (MHLD).

What is Your Stock's Earnings Yield?

Kevin Matras talks about a stock's Earnings Yield and how to use it. Highlighted stocks include ACT, AHL, ANW, TRN and URI.

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Today's Noteworthy Earnings After the Bell:   ››  INTCAXPCOFSLMSWKS

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TRIMEDYNE INC TMED Jan 15 +0.02% +9.99%
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