Should Investors Embrace Their FOMO?

2020-06-09T15:25:47+00:00June 2nd, 2020|Categories: INVESTMENT|

Executive Summary Presently, investors are rightfully confused by the diametrically opposed forces influencing markets.  Many have asked: Why are the markets not dropping?  There are two competing forces: economic reality versus Federal Reserve Bank efforts to save the day through more debt and money creation.  With the [...]

Does Larry Kudlow Have it Wrong?

2020-06-09T15:26:24+00:00May 27th, 2020|Categories: INVESTMENT|

Executive Summary Prior to becoming the Director of the U.S. National Economic Council, Larry Kudlow hosted a financial program on CNBC where he frequently touted, “Profits are the mother’s milk of stocks.” The recent rally in stock prices pushed stock valuations to extremes last seen in February [...]

How Likely Are Negative Interest Rates?

2020-06-09T15:27:36+00:00May 12th, 2020|Categories: INVESTMENT|

Executive Summary The Federal Reserve Bank controls the very short-term Federal Funds Rate; however, longer-term interest rates tend to track economic growth.  In the second graph in The Details, one can visually see the correlation between economic growth and the yield on the 10-year Treasury Note.  And [...]

Are Stock Prices More Overvalued Now Than at the Market Peak?

2020-05-08T17:59:34+00:00April 28th, 2020|Categories: INVESTMENT|

Executive Summary Many investors are probably thinking the recent stock market correction brought stock valuations more in-line with their long-term average. Stock valuations are typically measured using some derivation of the price-to-earnings ratio. The trailing twelve-month price-to-earnings ratio was 24 in February. However, due to the COVID-19 [...]

Is the Fed Getting Scared?

2019-12-03T20:57:42+00:00December 3rd, 2019|Categories: INVESTMENT|

Executive Summary In November 2008 the Federal Reserve Bank (Fed) initiated QE1 (The first Quantitative Easing program), the purchase of Treasury Securities with “created” money. They also began moving short-term interest rates zero-bound in an attempt to rescue the struggling economy. After successive QE programs, the result [...]

What Does the Underlying Data Indicate?

2019-11-26T19:28:35+00:00November 26th, 2019|Categories: INVESTMENT|

Executive Summary The week has started with broader markets moving higher. Although, the underlying data is moving in the opposite direction. In an effort to share research from others and not just my thoughts, I have included data from Sven Henrich of Northman Trader, Crescat Capital, as [...]

Can You Be a Risk Manager and Ignore Risk?

2019-11-19T21:50:42+00:00November 19th, 2019|Categories: INVESTMENT|

Executive Summary In this week’s newsletter, I outline investment risk verses fear of missing out. Investor risk is the risk of loss, which is increased when stock prices disconnect from corporate profits. Fear of missing out involves continuing to hold overvalued stock, speculating that one will still [...]

Does This Chart Tell It All?

2019-11-12T16:58:28+00:00November 12th, 2019|Categories: INVESTMENT|

Executive Summary When someone buys stock, they are buying future corporate earnings. When prices rise, that should mean corporate profits have risen. The first chart below is a must see. This demonstrates the rising price without the corresponding rising profit, also known as multiple expansion. Historically, when [...]

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