Some Common Cents for February 17th, 2017

Perhaps it is a little fitting the movie with the most Oscar nominations this year, with 14, is one entitled “La La Land.” By virtually all accounts, it is more than a fine film, but I will undoubtedly wait for it to come out on Netflix or Amazon Video. While the movie industry had its second best year in history, in nominal terms, in 2016, I haven’t been inside a theater since 2014.

I say it is fitting because much of the country seems to be in la la land, particularly the stock market.

In the simplest terms, stocks rally result when more money flows into the market than comes out. Basically, there are more buyers than sellers at the time, for whatever reason. However, stock prices usually come back to a few things: corporate profits (and expectations for future profits), how much investors are willing to pay for them, and the availability of attractive investment alternatives. We all want to make it more complicated than that, and some of our jobs depend on doing so, but that is about it. …Read More…

The opinions expressed within this report are those of John Norris as of the initial publication of this blog. They are subject to change without notice, and do not necessarily reflect the views of Oakworth Capital Bank, its directors, shareholders, and employees.

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