You may have seen this chart, but given the continued excitement regarding Apple as it hovers in the vicinity of $600 a share, and garners more exciting news with the introduction of the iPad4, the announcement yesterday that it will begin to pay a dividend, and will launch a $10 billion share buy-back program next year, it is an interesting chart.
It’s the work of Doug Kass, and has appeared on Business Insiders and a few other sites. So it has already been out there.
The chart shows how similar the excitement and spike-up of the stock of Apple, the red line, has been so far to the similar excitement and 3-year spike-up in Google shares, the blue line, to their peak in 2007, just weeks before the 2007 bull market top. Once they peaked, Google shares dropped 64% from $741 to $265 over the next 12 months.
Not that Apple is going to continue to track with Google’s previous run. But the chart is interesting.
Housing Market Index.
It was reported yesterday that the NAHB/Wells Fargo Housing Market Index, which measures the confidence of the nation’s home-builders, was unchanged in March, at 28.
It was immediately touted as a four-year high and a big positive for the housing market as we enter the traditional spring buying season.
Yeah, it’s near a four year high. But as a glance at the chart shows that’s a long ways from meaning a positive outlook by builders. The index is designed so that 50 on the index is normal. So except for its spike down in 1991, after the 1990 housing, it remains well below its level since at least 1985 which is where the chart begins.
And that’s after improving for four years to its current level.
It’s also interesting to note that at this time last year an improvement in the index had Wall Street calling the bottom of the housing decline and predicting a great spring season. But as the next chart shows, 2011 turned out to be even worse than 2010, and the worst year for housing since the bubble burst.
Meanwhile, it was not a good thing in the final years of the bubble that 30% of home sales were to investors and speculators, expecting home prices would continue to rise so they could flip them for big profits.
I wonder if it’s a good thing with the bottom hopefully in, that last month it was reported that 30% of sales were to investors and speculators?
To read my weekend newspaper column ‘There is now a new type of ‘wall of worry!’ Click here.
Images: Flickr (licence attribution)
About The Author
Sy Harding publishes the financial website www.StreetSmartReport.com and a free daily Internet blog at www.SyHardingblog.com. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!