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 [...]

Executive Summary In this week’s Market Update, I share comments made by economists Dr. John Hussman and Jeremy Grantham as well as quotes from Benjamin Graham and David Dodd published after the 1929-1932 stock market crash. The first graph below from Dr. Hussman’s most recent Market Comment [...]

Executive Summary Last week the Federal Reserve surprised economists with a 0.50% decrease in the Federal Funds Rate, rather than the expected 0.25% decrease. There are two reasons the Fed cut rates more than expected: 1) the level of interest on the Federal debt is at crisis [...]

Executive Summary The Treasury yield curve typically refers to the difference between the yield on the 10-year and two-year Treasury Notes. In normal times long-term yields are higher than short-term yields. The Federal Reserve’s recent rate hiking cycle caused the yield curve to invert – meaning short-term [...]

Executive Summary Over the past year, the economy has weakened, but the “strength” in the labor force has kept us from recession. However, recent revisions in the Bureau of Labor Statistics’ “new jobs data” bring into question the reliability of the BLS data. Revisions showed that “new [...]

Executive Summary To take advantage of negative interest rates in Japan and a strengthening dollar, investors have been borrowing funds in yen and investing in the U.S. and abroad. This “carry trade” allowed investors to achieve a higher yield on their investments and possibly gain on the [...]

Executive Summary Today’s missive compares the historical price movements in Cisco Systems to the price movements in Nvidia today. While there are some differences, the outcome is likely to be the same.   I encourage you to read The Details below for more information. “Whenever you [...]

Executive Summary Today’s missive compares the historical price movements in Cisco Systems to the price movements in Nvidia today. While there are some differences, the outcome is likely to be the same.   I encourage you to read The Details below for more information. “Whenever you [...]

Executive Summary As shown in the first graph of the missive this week, only 17% of companies in the S&P 500 have outperformed the index over the last 30 days. The S&P 500 Index is market-cap weighted. However, in the second graph one can see the S&P [...]