Our newsletter explores emerging trends and important news. Stay current on the subjects that affect your money and investments. Explore the wide range of topics in our newsletter by clicking any of the links below.
This morning, the WSJ reported that Warren Buffett has been on an aggressive buying spree during this bear market. There is a link to the market below. Buffett has been buying value stocks such as Chevron, Occidental Petroleum, and Hewlett-Packard to name a few. When he is buying on the stocks, he isn’t predicting that...Read More
Today’s CPI inflation data came in hot at 8.3%, down slightly from the previous report, but higher than expectations. Inflation is rampant in all the key areas that impact our daily lives such as food, energy, shelter and transportation. The sting of higher prices and the disruption emerging from the Chinese lockdowns has the...Read More
On Wednesday the Federal Reserve raised interest rates by 50 bps, or 1/2%. Initially the market reacted favorably to this with a strong rally on Wednesday, only to be reversed with the biggest down day since 2020 on Thursday. Tech/glamour stocks have simply been getting obliterated. Tesla dropped 8.3% on the day, while Amazon dropped...Read More
What a terrible month for the equity markets. As I write this, the Nasdaq looks set to close down 12.% for April, which is its worst monthly performance since October of 2008, which was when we were seeing some of the worst developments of the Financial Crisis. The index is now down more than 23%...Read More
Yesterday’s CPI report showed prices up 7.9% YoY, which was the highest reading since 1982. Even more concerning, this was before the impacts of the Russian/Ukraine war is reflected in the data. Market volatility is exceptionally high and pessimism is quite pervasive. There are legitimate fears that inflation in excess of wage growth could cause...Read More
The Nasdaq is now officially in a bear market as defined by a 20% decline from the highs, while the S&P 500 and Dow Jones indices are in corrections, with losses greater than 10%. The Russian invasion of Ukraine and the economic sanctions brought against Russia in response are a major deal for the global...Read More
Today we got the latest update on the Consumer Pricing Index (CPI) and it was a doozy, showing annual inflation of 7.5%. As you can see on the image above, the Real Fed Funds Rate (Fed Funds Rate Minus CPI) is now a negative 7.4%, which is the lowest since 1974. This means that money...Read More
In our last newsletter written on Friday, we wrote about just how much risk market participants are having to take to target a 7.5% return, mostly due to how low yields are on bonds. The bailout has been that equity markets have performed exceptionally well, but of course now we are starting at valuations that...Read More
I’ve been writing a lot about elevated valuations for equities and the absolutely horrid risk/reward in almost all bonds. I’ve kept the same graphics at the top of this email for the last month as I want to emphasize the importance. We’ve also covered inflation, which is rearing its ugly head, with the September PPI...Read More
Today the Case/Shiller housing price data came out and it showed prices up nearly 20% YoY. Brent crude oil touched $80 per barrel and is on course for its best month since February. Treasury yields have risen quite dramatically over the last week, with the 10-year now above 1.5%, the highest since June. Natural gas...Read More
Rob Arnott of Research Affiliates is one of the best investment strategists around. He wrote a fantastic article on the opportunity in value investing, so instead of going on about it, I’m just going to let you read it to get a good grasp of the opportunity in front of us. Here was one quote...Read More
Global markets have sold off pretty hard to start the week. Most of the narrative surrounds the Chinese property market and one of their largest developers, Evergrande. China’s government is clamping down on leverage and demanding many industries to buy in, literally, to their social objectives via cash “donations”, cheaper housing, etc. Both the Shanghai...Read More
Interest rates are without a doubt one of the most important drivers of investment returns, if not the most significant. Warren Buffett has mentioned in the past that there is almost a reverse gravitational impact of interest rates, in that lower rates tend to raise equity valuations. Conversely, higher interest rates tend to pressure...Read More
The image above shows the S&P Growth/Value ratio. As you can see, this ratio has hit a new marginal high, to an all-time record. This means that the valuation spread between growth and value has never been more extreme. Interestingly, we saw a similar pattern occur in 2000, right before the Nasdaq began...Read More
Today the August jobs report came out and was quite disappointing. The U.S. only added 235,000 jobs, which was well short of expectations that were for over 700,000 new jobs. Fears regarding the Delta variant likely had a role in this big miss. Many businesses I’ve talked to have expressed immense frustration about a lack...Read More
