Since the lows of last December, the markets have climbed ignoring weakening economic growth, deteriorating earnings, weak revenue growth, and historically high valuations on “hopes” that more “Fed rate cuts” and “QE” will keep this current bull market, and economy, alive…indefinitely.
Capitalism? Is it really broken? Or, has it just been distorted into an unrecognizable wealth transfer system? In the 1st of the 3-part series we discuss how we got here & why things seem to have gone awry.
When Carl Gugasian of Dewey, Cheatham & Howe rates Bianchi Corp. a “Strong Buy,” whose interest is that in? We dig into the conflict between WallStreet and You.
Has the splurge in companies buying back their own shares to support asset prices and improve bottom-line EPS finally begin to lose its effectiveness? We dig into the data and what could cause buybacks to end altogether.
Since the 2009 lows the stock market has surged by more than 300% which should be representative of a surging economy. Yet, what we find is a market which has pulled from the future.
Once a year, I post a list of investing rules of great investors in history. Experience is a valuable commodity and these rules can keep you from learning the hard way.
I first wrote about the consequences of hiking the minimum wage in 2016. A recent CBO study confirmed our previous take on the unintended consequences of hiking minimum wages.
With the political, fundamental, and economic backdrop becoming much more hostile toward investors in the intermediate term, understanding the value of cash as a “hedge” against loss becomes much more important.
Just recently, Rex Nutting penned an opinion piece for MarketWatch entitled “Consumer Debt Is Not A Ticking Time Bomb.” His primary point is that low per-capita debt ratios and debt-to-dpi ratios show the consumer is quite healthy and won’t be the primary subject of the next crisis.
Inverted yield curves, Fed cutting rates, and more QE all seem to "the bell ringing" for investors to jump into stocks as markets rise. But, is this the bell ringing to buy stocks, or is it the bell ringing the top of the market?
In last Tuesday’s “Technical Update,” I wrote that on a very short-term basis the market had reversed the previously overbought condition, to oversold. This oversold condition is why we took on a leveraged long position on the S&P 500.
Yesterday, the financial media burst into flames as the yield on the 10-year Treasury fell below that of the 2-Year Treasury. In other words, the yield curve became negative, or “inverted.”
Is the recent stock market correction just another "buy the dip" opportunity, or is there a greater risk than many investors realize?
I have often been asked when I am going to become a raging stock bull again. As Treasury Rates approach our zero target the table is being set for value to return to the stock market.
I have previously discussed the pending correction due to extreme deviations above long-term means. Trump's actions were simply the match that lit the fuse.
We have repeatedly warned about the danger of the Fed hiking into a weak, highly leveraged economy. The Media said it was bullish. Now they are cutting and it's bullish. It can't be both.
Over the last 18-months, there has been a continual drone of political punditry touting the success of “Trumponomics” as measured by various economic data points. Even the President himself has several times taken the opportunity to tweet about the “strongest economy ever.”
I recently wrote about the “F.I.R.E.” movement and how it is a byproduct of late-stage bull market cycle. It isn’t just the “can’t lose” ideas which are symptomatic of bullish cycles, but also the actual activities of investors as well. Not surprisingly, the deviation of growth over value has become one of the largest in history.
Over the last couple of weeks, I have laid out the bull and bear case for the S&P 500 rising to 3300, and the case for the Fed to cut rates. In summary, the basic driver of the “bull market thesis” has essentially come down to Central Bank policy.
The Etrade commercial aired during Super Bowl XLI in 2007. The following year, the financial crisis set in, markets plunged, and investors lost 50%, or more, of their wealth. However, this wasn’t the first time it happened.
Economists are stunned by why economic growth remains at low levels a decade after the last recession. Here's why.
In this past weekend's newsletter we discussed the bull/bear case for S&P 3300. We now look at the #complacency behind it.
WIth a $5-7 Trillion shortfall in funding, it is a lesson that investors/savers also engage in which is simply a #math problem.
This final chapter is going to cover some concepts which will destroy the best laid financial plans if they are not accounted for properly.
There have been many comparisons about the Fed using "insurance" #rate #cuts today versus 1995. We compare the financial and economic conditions of both periods to make the case.
While “Part One” focused on the amount savings required to sustain whatever level of lifestyle you choose in the future, we also need to discuss the issue of the investing side of the equation.
Let me start out by saying that I am all for any piece of advice which suggest individuals should save more. Saving money is a huge problem for the bulk of American’s as noted by numerous statistics.
There is little denying the rise of “socialistic” ideas in the U.S. today. You can try and cover the stench by calling it “social democracy” but in the end, it’s still socialism.
For the majority of investors, the recent rally has simply been a recovery of what was lost last year. In other words, while investors have made no return over the last 18-months, they have lost 18-months of their retirement saving time horizon. The decline was small last time. But what about next time?
During very late stage bull markets, the financial press is lulled into a sense of complacency that markets will only rise. It is during these late stage advances you start seeing a plethora of articles suggesting simple ways to create wealth.
Recent comments from Fed Chairman Powell with respect to corporate debt echoes what Bernanke said in 2007 about subprime mortgage debt.
Nathan Rothschild once quipped "You can have the top 20% and the bottom 20%. I will take the 80% in the middle." This is 80/20 rule of investing.
This past weekend, I was digging through some old articles and ran across one that needed to be readdressed on“human stupidity” as it relates to investing.
Since the beginning of 2019, the market has risen sharply. That increase was not due to rising earnings and revenues, which have weakened, but rather from multiple expansion. In other words, investors are willing to pay higher prices for weaker earnings.
It is often said that no one saw the crash coming. Many did, but since it was “bearish” to discuss such things, the warnings were readily dismissed.
A recent comment from Chamrath Palihapitiya last week suggests that may be the case. An award to an aspiring economist who wants to study ending recessions. But are #recessions a bad thing?
This past weekend, we discussed the breakout of the markets to all-time highs. The question I asked this past weekend was simply; “The bull market is back, but can it stay?”
A look at combined problems of pensions and lack of savings facing #babyboomers as they face retirement.
The previous recessionary warnings from autos was dismissed until far too late. It is likely not a good idea to dismiss it this time.
Last week, the Federal Reserve released their March FOMC meeting minutes. Following the release, the markets surged higher as the initial reading by the markets was “the Fed is done hiking rates.”
There is little argument the streak of employment growth is quite phenomenal and comes amid hopes the economy will continue to avoid a recessionary contraction.
The market, and the yield curve, are trying to tell you something very important.
Let’s review the periods just prior to the onset of the last two bear markets to see if there are any similarities to today’s environment.
The most critical aspect of the financial system is "trust" in it. After years of Wall Street "raping and pillaging" individuals to line their own pockets, the next bear market will likely destroy the remaining "trust."
In a widely expected outcome, the Federal Reserve announced no change to the Fed funds rate but did leave open the possibility of a rate hike next year.
It is critically important to remain as theoretically sound as possible as a large majority of investors have built their portfolios on a foundation of false ideologies. The problem is when reality collides with widespread fantasy.
There should be no one more concerned about YOUR money than you, and if you aren’t taking an active interest in your money – why should anyone else?
There has been a lot of commentary as of late regarding the issue of corporate share repurchases. Even Washington D.C. has chimed into the rhetoric as of late discussing potential bills to limit or eliminate these repurchases. It is an interesting discussion because most people don’t remember that share repurchases were banned for decades prior to President Reagan in 1982.
With the fundamental and technical backdrop no longer as supportive, valuations still near the most expensive 10% of starting valuations, and interest rates higher, the returns over the next decade will likely be disappointing.
One of the most highly debated topics over the past few months has been the rise of Modern Monetary Theory (MMT). The economic theory has been around for quite some time but was shoved into prominence recently by Congressional Representative Alexandria Ocasio-Cortez’s “New Green Deal” which is heavily dependent on massive levels of Government funding.