Business & Finance
Business and Finance
Business and Finance
Fri, October 15, 2010
Thu, October 14, 2010 Zacks' Voice of the People Highlights Opportunities with JPM
CHICAGO--([ BUSINESS WIRE ])--Zacks highlights commentary from People and Picks Trader ainthemoneystocksa.
For more Voice of the People, visit [ http://at.zacks.com/?id=5851 ]
Featured Post
Can We Really Trust the Banks' Earnings?
This morning JPMorgan Chase & Co. (NYSE: [ JPM ]) reported earnings. The headline in the media stated that the company's earnings rose or increased by 23 percent. This would normally be a huge beat and most people would believe the stock would skyrocket higher. However, while the headline number was very good the stock is actually trading lower as I write this small article. Let us ask why this is happening?
Can anyone really understand the accounting that is used by the large major banks? Remember these banks do not have to report their toxic assets as liabilities any longer since the FASB 'mark to market' accounting changes. These toxic derivatives that the banks actually have on their books are really credits now. Bad mortgages are also a thing of the past and very few people really understand how they write down their foreclosure losses.
Personally I'm not an accountant, however, I can read an income statement and a balance sheet. These bank balance sheets really make no sense to me and looks more like an Enron statement. Every accountant that I have spoken with can't really make heads or tails out of any of the major banks balance sheets either. I suppose when you write the rules you can change the rules at anytime. Please understand that these large major banks can borrow money from the Federal Reserve Bank at zero percent.
Therefore, theoretically the large major banks do not need to lend money in order to make money. They can simply buy stocks, U.S. Treasuries, and operate their credit card business. Remember the average interest rate on a credit card is over 16.50 percent. It's not a bad racket when you think about it.
This is why as a trader we must use charts. The charts will simply tell us if money flow is going in the stock or out of the stock. Who can really figure out what a bank's balance sheet or earnings report is really telling us? These earnings reports are so filled with accounting shenanigans that sometimes I wonder if they understand it themselves. My advice is too stay with the charts as price action is king.
About the Zacks Community
In 2008, Zacks Investment Research launched PeopleAndPicks.com, a stock-picking website where members of the Zacks community can test their strategies and share ideas with other members. Each user is scored on the accuracy of his or her picks, and top users are rewarded with free products from Zacks. Registration is free. To learn more about People And Picks, visit [ http://at.zacks.com/?id=5957 ]
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to [ http://at.zacks.com/?id=5958 ].
Follow us on Twitter: [ http://twitter.com/ZacksInvestment ]
Join us on Facebook: [ http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts ]
Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
