Executive Summary Current stock market valuations are pushing the limit of statistical norms. Look at the first graph below which shows the market is over four standard deviations from the mean. Normal statistical distributions fall within four standard deviations 99.9937% of the time! The second two graphs [...]

Executive Summary The following was written by Brian Wesbury, Chief Economist, and Robert Stein, Deputy Chief Economist, at First Trust Advisors, L.P. I thought it clarified much of the chatter surrounding the inflation argument. I hope you enjoy their take. Please proceed to read The Details below [...]

Executive Summary Benjamin Graham (Warren Buffett’s mentor) and David Dodd authored the book Security Analysis, in which they define investment as: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” The second [...]

Executive Summary Historically, when the yield curve un-inverts, a recession is soon to follow. In the first graph below one can see interest rates are behaving similar to previous recessions. Note, no recession has currently been declared. Additionally, the National Federation of Independent Business (NFIB) Small Business [...]

Executive Summary What does stock market overvaluation mean? Overvaluation refers to whether the price paid for a stock is higher than what would be considered reasonable based upon corporate revenue and earnings. One benchmark is the price-to-earnings ratio (P/E), which has a long-term median of 15. The [...]

Executive Summary Election day is finally upon us! Everyone wants to know who is going to win, and what will happen to the economy and the stock market. I am here to give you the answers…just kidding. As a follow up to last week’s commentary, the Congressional [...]

Executive Summary As we near the end of an election season, I find it intriguing that neither party is highlighting the dangerous debt predicament facing the U.S. After the 2007-2009 Financial Crisis, the U.S. annual budget deficit soared to over $1 trillion (see first graph). The rapid [...]

Executive Summary Housing prices have perplexed many since mortgage rates rose in 2023. Since active home listings plummeted from 1.2 million in 2019 to 347,000 in 2022 (see first graph), prices stayed high. Now analyzing housing affordability, one can see it is more unaffordable than in 2007 [...]

Executive Summary A recent article in the Financial Times suggests that the Fed pushing interest rates higher has led to a windfall profit for large banks of almost $1 trillion at the expense of depositors. In this missive I will review changes in Fed policies, including growing [...]

Executive Summary Speculators have driven the stock market to extreme highs, along with the imbedded risks. The four graphs (included below) represent various valuation methodologies. Twelve-month trailing p/e (currently 30, long-term median is 15) Shiller P/E (currently 37, long-term median 16) The Buffet Indicator Hussman’s ratio of [...]