Executive Summary Benjamin Graham, the father of value investing and mentor to Warren Buffett, in December 1959 commented that at the peak of all bull markets, “past experience” only represents the “sunny side of the investment”. And he also indicated the sentiment that the market has always [...]
Executive Summary The Jobs Report released last week reported 943,000 new jobs, and the markets and media celebrated. What the headline did not reflect was the actual loss of 133,000 jobs, which then was seasonally adjusted (part of the calculation) to arrive at the nearly one million [...]
Executive Summary Most investors take a myopic view of economic growth. When viewed in isolation, second quarter real annualized GDP growth of 6.5% sounds outstanding. However, GDP growth per capita remains below trend (second graph below). For the economy to grow, there must be either productivity growth, [...]
Executive Summary Due to low mortgage rates and depressed inventory, the housing market is red hot. Investors have scooped up existing home inventory, while new single-family home sales are off their peak (see second graph). New-home prices are very high (third graph); however, if one takes a [...]
Executive Summary Since I am out of town taking a few days of R&R, I want to share an article written recently by economist Lance Roberts of Real Investment Advice. The S&P 500 Index closed at 4,327 down 0.97% for the week. The yield on the 10-year [...]
Executive Summary Long-term interest rates, while cycling up and down over the last 35 years, have remained in a downward channel (see first graph). During the pandemic and recession of 2020, yields dropped to .5% - however escaping going negative like Japan and Europe. Many suggested inflation [...]
Executive Summary The stock market has now become a destination for speculators. The most recent target of the market’s lure has been retail investors. Retail investors historically have been the last to arrive and depart the party; thereby, suffering the most damage during the speculative market’s reversion [...]
Executive Summary To understand the risk of inflation or stagflation, it is important to know how “money” is created and what is required of this new money in order to generate inflation. In this missive I review these concepts and show graphs of the money supply, Federal [...]
Executive Summary A relatively strong correlation exists between economic growth, inflation and 10-year Treasury yields as can be seen below (first graph). I believe the current leap in GDP growth is due to the economic reaction from reopening post pandemic; however, I think this is transitory. Take [...]
Executive Summary In this missive, I will review debt levels and growth of the following types of debt: Federal, nonfinancial corporate, and household and nonprofit organizations. I will examine the rate of growth of each of these categories of debt from 1980 to present. This rate of [...]