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Inflation
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...
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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...
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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...
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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...
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  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...
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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...
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To piggyback on our last article discussing the illogical 60/40 portfolio in today’s interest rate environment, I thought I’d pass on this article on how interest rates impact bonds.  Many people don’t realize the immense risks that rising interest rates pose to bonds.  In the inflationary 1970’s, bonds were called “certificates of confiscation” due to...
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Well that was one heck of a week.  While I certainly was not smart enough to predict the results of the election, it has had a profound impact on my expectations for us as investors.  For the last 7 years, I’ve been one of the most vocal advocates of financial stocks that I am aware...
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This morning I was reading an interesting Bloomberg article on the lack of savings being accumulated by a large percentage of the population, including those earning between $100-$150K per year. Astonishingly in the survey, close to 50% of those have less than $1,000 in savings, and about 18% have absolutely nothing. Even those who earn...
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Over the last month, we have begun to see financial stocks outperform the overall market.  If one was to ask why, most market participants would say that the perception that interest rate hikes are more likely to be forthcoming in 2016 is driving the stocks.  In a market where short-termism is the status quo, these...
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