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Investor Beat: JPMorgan's CEO Succession Chain Uncertain?

By Chris Hill - Mar 25, 2014 at 7:26PM

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Who's next to be CEO at JPMorgan now that the front-runner's been hired away? Plus, the case for McCormick, weak new home sales, and why we're watching the biotech bubble, on Tuesday's Investor Beat.

The Dow and S&P bounced back today, despite the latest round of housing data, which showed that new home sales fell 3.3% for the month of February, hitting a five-month low.

On Tuesday's edition of Investor Beat, host Chris Hill and Motley Fool analyst Morgan Housel discuss whether or not this puts an end to the housing market recovery. The guys discuss that while the harsh winter weather this year was definitely a factor here, the most important aspect to remember is that one month of data does not make a trend. Morgan still sees the housing recovery to be strong by several metrics, despite this blip.

Then, many have long considered Michael Cavanagh as the high-ranking executive who stood next in line at JPMorgan Chase for CEO, once Jamie Dimon stepped down. Now however, Cavanagh has been hired away from JPMorgan by private equity firm The Carlyle Group. Where will Dimon turn now for a successor? Chris and Morgan discuss the chain of succession at JPMorgan. Morgan notes that at these major financial institutions, one of the strongest assets they have is their high-quality employees, and that another toll of the institution facing so much litigation apart from the financial cost may be the drive for employees to go elsewhere, to firms that aren't making headlines.

Also, first quarter profits for McCormick & Company came in better than expected, and shares have risen on the news. Although the company hasn't been a market beater of late, Morgan thinks it's worth a second look. He discusses the spice maker, and talks about why "boring" stocks like McCormick sometimes make the best investments. Unlike the high flying, headline-grabbing stocks like Tesla Motors, McCormick doesn't need to constantly innovate, it can continue to make the same products that people will continue to need for decades to come. Morgan sees that as a key ingredient to outperformance over the long run.

And finally, Morgan takes a look at the iShares NASDAQ Biotechnology Index, and why he sees many tell-tale red flags that the biotech space is in a bubble right now. Morgan gives his insight on what these warning signs are, and whether or not the bubble could be near collapse.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
JPM
$157.89 (-0.59%) $0.94
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,022.04 (-1.34%) $-461.68
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,513.04 (-1.18%) $-53.96
iShares Trust - iShares Nasdaq Biotechnology ETF Stock Quote
iShares Trust - iShares Nasdaq Biotechnology ETF
IBB
$150.74 (-2.26%) $-3.48
McCormick & Company, Incorporated Stock Quote
McCormick & Company, Incorporated
MKC
$86.55 (0.85%) $0.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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