When I walked across the stage to accept the Charles H. Dow Award, it didn’t occur to me that I was one of the first women in history to do so.“Elves on Wall Street” alongside Louis Rukeyser. These women were trailblazers. Wall Street was clubby in their day. Being someone’s nephew was often a good enough reason to be hired… And being a woman was a good reason not to be. To succeed, they had to know more and work harder than the men they worked with — and accept less recognition. Not to mention endure plenty of struggles that nowadays we call harassment. Why am I telling you this? In honor of one pioneering woman on Wall Street, who recently passed away…I was in New York City, accepting the 2015 award for a paper I wrote the year before. Today, I am still just one of three female winners among 32 recipients. The event was pretty much as I expected — lots of older men in suits. There were only a few women scattered around the room. The first woman I met was Louise Yamada, who had retired after a lengthy career at Smith Barney. Another was Bernadette Murphy, one of the
Thank You, Geraldine Weiss
Memories of my time in New York came back to me last week, when I learned that Geraldine Weiss had passed away. Gerry’s name had come up many times at the conference. She’d had a remarkably successful career — thanks in large part to the fact that, for 10 years, she hid her identity from the public. Weiss wrote under the male pseudonym “G. Weiss” before finally showing who she was in 1976 on the PBS show “Wall Street Week.” It’s amazing to think that this happened in some of our lifetimes. In addition to overcoming the challenges of being a woman on Wall Street, Gerry also inspired me by creating her own indicator. Gerry’s indicator addressed a major problem with earnings. The New York Times obituary quoted her as saying “a clever accountant can make earnings appear good or not so good” by using “vague bookkeeping terms such as cash flow, depreciation or inventory resources.” This should sound familiar — after all, companies still use underhanded tactics to manipulate earnings. Just last month, the SEC penalized a company for increasing earnings per share by $0.01 to meet Wall Street estimates. It’s so bad today that companies usually release two sets of earnings — one based on accounting rules, and another “adjusted” one. Analysts and investors generally use the adjusted earnings, accepting the idea that management knows the best way to manipulate earnings. Gerry developed her own tools to combat this in the 1960s. She believed that only dividends mattered, so she created an indicator based on the dividend yield. It’s a long-term strategy that’s completely objective and meets the goals of value investors to buy low and sell high. While I agree dividends offer information that’s not found in earnings, I disagree that dividends are the most important metric to consider. Today, I believe the stock’s price is all that matters. Prices are the only thing that are real in finance. Everything else is subject to adjustment and revision. Gerry inspired me to find my own way. I studied price and developed tools that tell me when important trends are reversing. This gives me an edge. And thanks to Geraldine, Louise, Bernadette, and others, I don’t have to hide my identity from you. That means I’m able to work in a field that was largely closed off to the women before me.
Regards,Amber Hestla Senior Analyst, True Options Masters
Chart of the Day:The Oil Trend Is Still Up
By Mike Merson, Managing Editor, True Options Masters
If you’re tired of paying high prices at the pump… Well, you’d better find a way to finance a pricey EV, and fast.The trend in oil is up. Volatile, but up. There’s no question about it. The breakout of the very long-term resistance back in February was extreme, and oil prices needed to come in to retest that former resistance as support. That’s exactly what happened. Sure, the market got a bit jumpy — a war did break out, with one of the sides being a key oil supplier — and prices chopped below the former support for a couple weeks. But that doesn’t take anything away from the fact that oil, and all energy, is trending higher. New local highs in oil prices, north of $125 a barrel, seem imminent to me. With inflation doing its thing, we may even return to the 2009 highs of just under $150 a barrel.
Mike Merson Managing Editor, True Options Masters