What the Market Taught Me This Week

As a member of our 10% Promise team, I see a lot of wild swings in the market. Sometimes there's an easy explanation and sometimes the market knocks us for a loop without telling us why. But every week I learn something new. Here are a few things the market taught me this week.

Sam Adams, please
I keep thinking Boston Beer (NYSE: SAM  ) will run out of steam, but the maker of Sam Adams just keeps pumping out great quarterly numbers. On Wednesday, the stock jumped 14% after the company released great earnings and bumped guidance higher. Apparently I'm not the only one turning down cheap light beer in favor of a tasty craft brew. How long can this trend continue?

AIG is back
Shares of AIG jumped earlier this week on comments from Chairman Steve Miller that the company may shift into growth mode from survival mode. But I also got a surprise when Timothy Geithner said he thought the entire financial bailout would cost less than $25 billion. It was once unfathomable that the government would get most of the bailout/taxpayer money back, so we should all be dancing in the streets after hearing this news.

The electronics world is turning upside down
The market kicked Best Buy (NYSE: BBY  ) and hhgregg (NYSE: HGG  ) to the curb faster than you can say "Geek Squad" after hearing Best Buy lost market share. I guess this isn't terribly surprising when you think about it. These days, Target carries comparable electronics to Best Buy, and you can pick up some milk and eggs on your way out. I love going to Best Buy but more as a sightseeing trip than a place I have to buy a big-ticket electronics item. Maybe that would change if Best Buy and hhgregg started carrying grocery items?

Knowing the rules is half the battle
Shares of optionsXpress (Nasdaq: OXPS  ) were all over the place Tuesday on confusion about an upcoming dividend. The company clarified the issue Wednesday in a press release stating that because of a Nasdaq rule, the ex-dividend date will be Dec. 28 for shares outstanding on Dec. 13. I hadn't heard of Nasdaq Rule 11140(b)(2) until this week, but these are the things you learn in the market. Head still spinning? See the press release here.

Speaking of rules, Visa (NYSE: V  ) and MasterCard (NYSE: MA  ) were both knocked down yesterday when the market found out regulators were looking at capping debit card interchange fees at a much lower rate than expected. The fallout from the Dodd-Frank financial reform bill is starting to hit investors, and so far it doesn't feel very good.

Interested in reading more? Add one of these companies to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his Motley Fool CAPS picks at TMFFlushDraw.

Best Buy, hhgregg, optionsXpress Holdings, and Boston Beer are Motley Fool Stock Advisor choices. Motley Fool Options has recommended buying calls on Best Buy, which is also a Motley Fool Inside Value recommendation. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 17, 2010, at 6:05 PM, patrails wrote:

    What I learned (I hope I learned) is that trading is like a golf swing. The harder you try the worse the outcome. Relax, take your time, let it come to you and it will usually come out good.

  • Report this Comment On December 17, 2010, at 6:28 PM, TMFFlushDraw wrote:

    @patrails

    Very well said.

    Travis Hoium

  • Report this Comment On December 17, 2010, at 10:34 PM, goalie37 wrote:

    Interesting piece. Although I'm not sure I buy into the TARP statement. Let me see if I can understand it:

    1) Government gives money to banks (TARP)

    2) Banks use money to buy treasuries from government.

    3) Government pays interest to banks.

    4) The Fed buys treasuries from banks at a profit to banks.

    5) Banks pay government.

    6) Government claims that TARP cost less than expected.

  • Report this Comment On December 18, 2010, at 1:39 PM, fuzzylou wrote:

    Great article! I agree with your assessment of Target and Best Buy.

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