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Today the U.S. consumer prices numbers were released. The numbers topped forecasts significantly, increasing by 0.8% from the prior month, reflecting gains in nearly every major category. To put it into context, the gain in the overall CPI was twice as much as the highest projection in a Bloomberg survey of economists. It is clear...Read More
We saw a little bit of volatility the last few days, as an overleveraged hedge fund blew up spectacularly. It was one of the largest blowups in history (over $50 billion) and despite owning some pretty good positions, being leveraged 5-1 almost always assures disaster at some point, unless you are exceptionally lucky, and this...Read More
Volatility has come back into the equity markets, driven by rapidly increasing Treasury yields. In fact, since the vaccine data came out towards the end of last year, Treasury Bonds are down 27.7%, meaning yields are up. This has coincided with value stocks and financials going on a massive rally and outperforming peers, after a...Read More
There have been a few interesting market developments the last few days. 10-year Treasury yields have increased to levels around where they were last year at this time, before the pandemic and lockdowns had really been felt. The $1.9 Trillion stimulus package seems to be getting closer to getting done. Inflation expectations are ticking up...Read More
The speculative fever seems to be at full blast as we’ve seen with the wild price moves in stocks such as Tesla, or alternatives such as Bitcoin. Many people are applying pandemic-inflated growth levels into perpetuity. One example, I find interesting is Zoom Video Communications (ZM). The stock rose 400% last year, as the technology...Read More
Last night’s Senate runoff in Georgia looks like it will be a clean sweep for the Democrats giving them control of the Presidency, House and Senate (with the VP holding the tie breaking vote). The margins in the House and the Senate are very small, so it won’t be easy to pass a major tax...Read More
I came across a terrific article I wanted to share with you by the asset manager GMO on how extreme the opportunity in value is versus growth. I’m going to share some of the most important commentaries. “The performance of Value from 2007 to 2019 was, to put it mildly, uninspiring. This was not...Read More
The last decade has been a strong one for U.S. equities and bonds. One primary driver of that performance were low starting valuations, stemming from the Great Recession, which had just ended in 2009. This was the opposite of the scenario that led to the lost decade preceding it. I believe many market participants are...Read More
Over the weekend, three pieces of good news occurred that should be quite beneficial to our portfolios over the next 12 months and hopefully sooner too. First, the Moderna vaccine was approved and will start to be used on Monday. This is another MRNA vaccine like the one from Pfizer, but it doesn’t require the...Read More
I hope that you all had a wonderful Thanksgiving holiday. What a crazy year it has been. Surely, these next few months will be historic as the vaccine rollout and distribution takes center stage. It would seem that these combined with better treatments such as the Regeneron and Eli Lilly AB programs, should be able...Read More
On Monday, we saw additional positive news on the Covid-19 vaccine front, with Moderna’s initial data looking very promising. This is another revolutionary MRNA vaccine, similar to Pfizer’s, which released impressive data last week. More traditionally developed vaccines are coming down the pipeline as well, and treatments such as the Eli Lilly and Regeneron antibody...Read More
Today we received some very good news in that Pfizer’s Covid-19 vaccine is supposedly proving itself to be 90% effective in the latest trials, which is quite a bit better than what is required to be deemed successful. This is an MRNA vaccine, which is a revolutionary technology that would greatly reduce the time it...Read More
Today we received some very good news in that Pfizer’s Covid-19 vaccine is supposedly proving itself to be 90% effective in latest trials, which is quite a bit better than what is required to be deemed successful. This is an MRNA vaccines, which is a revolutionary technology that would greatly reduce the time it takes to develop...Read More
Running up to the election in 2016, I believe the market was down 12 days in a row or something along those lines. We’ve seen a substantial selloff once again running into this one as tensions are high and stimulus is not happening prior to the election. Facebook, Amazon, Apple, and Google were down by...Read More
I came across a very interesting article written by value investor and market historian Richard Pzena. As you know, the closest comparison to the current market environment is the Tech Bubble, as the most expensive companies have seen P/E multiple expansion, while value stocks have seen multiple compression. As you can see on the...Read More
