Executive Summary Financial media and the stock market seem to hang on every word released by the Fed. In fact, last week the S&P 500 Index jumped by about 1.5% in a matter of seconds on virtually no new news regarding monetary policy in the Fed statement. [...]

Executive Summary In this eye-opening look at the current stock market cycle, I compare the cycle to 1929 and 1999 as well as uncover one of the significant underlying factors fueling the bubble. In 1929 the S&P 500 P/E ratio peaked at 20, and in 1999 the [...]

Executive Summary The current housing market appears to be booming with continually escalating prices. Substantially aided by the Fed’s low interest rates, rising home prices are disconnected from the Consumer Price Index, a proxy for inflation (see second graph below). The fifth graph in The Details demonstrates [...]

Executive Summary The quote below is from Warren Buffet’s long-time business partner, Charlie Munger, and speaks to the recent irrationality in the stock market.  One valuation metric used to evaluate the price of a stock is the price to earnings ratio.  Historically, the average P/E ratio for [...]