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

  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

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

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

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

  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

As we retire or get closer to retirement, the need to generate investment income takes on a much greater importance.  Historically, it was much easier, as one could divert a larger portion of their stock portfolio into bonds, while capturing yields that might vary from 5-10%.  Those yields, combined with the nearly 40-year bull market...Read More