ENTREPRENEURSHIP SERIES: USING REALISTIC ASSUMPTIONS CAN BE TRICKY, BUT VALUABLE

Over the years I have written many business plans and created countless financial forecasts for startups and early-stage companies. One of the most difficult aspects of creating a financial forecast is identifying realistic assumptions. The earlier the stage of development of the company, the more difficult it typically will be to make reasonably accurate assumptions. Depending on the main purpose of the financial forecast, or the business plan that the…

Market Psychology and the Risk of Compacency

With the markets reaching new all-time highs, I thought it would be worthwhile to consider how far the markets have run from the lows after the “Great Recession” of 2008/2009. The S&P 500 bottomed out at 666. As of today (August 27, 2018), the S&P 500 is trading at about 2,890, which represents a 333% gain since March of 2009. We can review multiple metrics to try to determine if…

Entrepreneurship Series: Men With Hats

From time to time I write articles about the tenets of good entrepreneurship qualities and guidelines, and this article definitely fits within that category. In teaching entrepreneurship classes, one thing that often is discussed is the need for professionals to wear many hats. This is especially true with start-ups and very early-stage companies. Typically these firms just do not have the resources to attract and compensate a full compliment of…

Tech Weakness Continues to Drive Market Direction

Despite yesterday’s reprieve, stocks are pushing lower today with Technology stocks leading the way. Over the past few weeks, we have seen tech stocks trending lower, lead by the FAANG stocks – Facebook, Amazon, Apple, Netflix and Google (Alphabet). These stocks have been the darlings of the stock market rally over the past 4 years, but have now rolled over, and are dragging the rest of the tech sector, the…

Tech Stocks Continue to Diverge

In the past few weeks we have witnessed a marked change in leadership for the overall stock market, with Technology stocks, which were the previous leaders, weakening significantly. As evidence of this, we have seen the tech-heavy NASDAQ Composite Index trending lower, while the Dow and S&P 500 have maintained their strength. I have written about the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) – these stocks have been…

Amazon Buys Whole Foods for $13.7B in Cash – Is this the end of brick and mortar grocery?

Amazon announced today that it will acquire Whole Foods for $13.7 billion in cash. Following this news Whole Foods was up almost 30%, a great day for shareholders of both Whole Foods and Amazon, but not so great for the rest of the retail grocery segment (Kroger is down about 9% today). The grocery segment is nothing new for Amazon – they have been selling a multitude of typical grocery…

Fed Rate Increase As Expected; Shrinking Balance Sheet Much More Interesting

As expected, The FOMC (Federal Open Market Committee) of the Federal Reserve raised the Fed Funds rate by 1/4-point to a range of 1% to 1.25%. They further projected that one more rate increase will be needed this year. This is all pretty much as was expected (the futures were indicating a 99%+ likelihood on a 1/4-point raise). What was much more interesting is that the Fed now plans to…

Techs falling apart despite overall market stability

Okay, I know it has been a while since I posted anything to my blog. Life is busy and complicated! Looking at the markets today, we are seeing a very interesting divergence between the NASDAQ, which is tech-heavy and is down about 1.75% today, and the S&P 500 and Dow, which are both about flat at the moment. The Dow was up about 100 points this morning, and the NASDAQ…

Fed Stays the Course, for Better of for Worse

The Fed did not change rates today, and didn’t change course in terms of their plans for raising rates over the coming quarters and years, at least in terms of the Fed statement released after their meeting today. This outcome, or lack of any change, is a bit of a double-edged sword – since they didn’t raise rates of state directly that they are concerned about financial markets (which we…

Stock Market Poised for Strong Performance for the Balance of 2016

Yesterday was a great opportunity to invest cash, with the market dropping significantly early in the trading session. I was able to invest a significant portion of my remaining cash, and am now about 90% invested with 10% cash remaining. the S&P 500 dipped as low as 1812 before rebounding nicely to end the session at 1859, still down about 22 points from the previous close, but up 47 points…