Showing posts with label bull market. Show all posts
Showing posts with label bull market. Show all posts
Friday, January 23, 2015
Wednesday, December 31, 2014
Wednesday, September 10, 2014
Sunday, June 29, 2014
The Limerick of Finance for 06/29/14
Malaysia bull market gets old
Investors all need to be told
When value hits top
It may possibly drop
Some Malay fans will wish they had sold
Investors all need to be told
When value hits top
It may possibly drop
Some Malay fans will wish they had sold
Saturday, June 21, 2014
Wednesday, January 15, 2014
Broad US Stock Index Loses Touch With Reality In 2014
Just look at the insane record high the S&P 500 reached today. The narrative that bank earnings drove this record doesn't hold water in light of recent regulatory gifts banks received. Banks that don't have to hold larger capital cushions are free to stay levered up in pursuit of the Fed/Treasury carry trade.
The PPI's rise indicates inflationary pressure at early points in the nation's supply chain. Come on, people, that's obvious even to Notre Dame preppies running their family's trust funds. Those higher prices may work their way into the CPI but don't count on it if government economists change their seasonal smoothing methods. Telling the straight truth would be so much easier if it didn't jeopardize people's careers. Politicians can't tell us the truth about unfunded entitlements and declining median incomes but Americans don't mind as long as their EBT cards are reloaded each month.
I've said it before and I'll say it again. The Fed and other central banks are playing games with the cost of capital and the retirement savings of middle-class investors. This is not a fun game. It will end very badly and a lot of people will be hurt. Consider the period between the two World Wars for case studies in how badly people can be hurt. The combination of the Great Depression and an unequal wealth distribution skewed toward plutocrats helped destroy the immature democratic institutions of Japan and Germany. America's institutions are of course more mature but our plutocrats are less capable of governing now than at any time in our history.
Alrighty, that's enough of a rant for now.
The PPI's rise indicates inflationary pressure at early points in the nation's supply chain. Come on, people, that's obvious even to Notre Dame preppies running their family's trust funds. Those higher prices may work their way into the CPI but don't count on it if government economists change their seasonal smoothing methods. Telling the straight truth would be so much easier if it didn't jeopardize people's careers. Politicians can't tell us the truth about unfunded entitlements and declining median incomes but Americans don't mind as long as their EBT cards are reloaded each month.
I've said it before and I'll say it again. The Fed and other central banks are playing games with the cost of capital and the retirement savings of middle-class investors. This is not a fun game. It will end very badly and a lot of people will be hurt. Consider the period between the two World Wars for case studies in how badly people can be hurt. The combination of the Great Depression and an unequal wealth distribution skewed toward plutocrats helped destroy the immature democratic institutions of Japan and Germany. America's institutions are of course more mature but our plutocrats are less capable of governing now than at any time in our history.
Alrighty, that's enough of a rant for now.
Monday, June 10, 2013
The Haiku of Finance for 06/10/13
What could happen next
Fed turns off stimulus buys
End of bull bubble
Fed turns off stimulus buys
End of bull bubble
Friday, February 24, 2012
There Are Bigger Numbers Than Dow 13,000
The DJIA is flirting with 13,000 after a few years of resetting closer to what I believe should be its fair market value (hint: a lot lower!). There are plenty of numbers far larger than that one. Our planet is about 4.5 billion years old, with 7 billion people living on it, and it's approximately 93 million miles from the Sun. Okay, I'm goofing off here.
The big numbers we should really concern ourselves with as investors are the federal government's unfunded liabilities, which totaled over $61 trillion in 2011. That's the figure that will ultimately drive the global bond market away from Treasuries and any other dollar-denominated fixed income investment. I don't listen to market commentators who urge the investing public not to miss the next bull market into Dow 13,000.
Full disclosure: No position in Treasuries at this time.
The big numbers we should really concern ourselves with as investors are the federal government's unfunded liabilities, which totaled over $61 trillion in 2011. That's the figure that will ultimately drive the global bond market away from Treasuries and any other dollar-denominated fixed income investment. I don't listen to market commentators who urge the investing public not to miss the next bull market into Dow 13,000.
Full disclosure: No position in Treasuries at this time.
Sunday, December 25, 2011
The Limerick of Finance for 12/25/11
A Santa Claus rally this year
Would make many bears shed a tear
With shorts they must cover
If stocks more than hover
A short squeeze would quickly appear
Would make many bears shed a tear
With shorts they must cover
If stocks more than hover
A short squeeze would quickly appear
Tuesday, September 08, 2009
Gold Breaking $1000
The spot price of gold is flirting with breaking $1000/ounce today:
Go gold! My faithful readers (all three of them) know that I am long IAU and GDX. I wrote covered calls on GDX (plus a few extra uncovered ones) and some covered calls on IAU to generate a little bit of yield. I figured why not, as gold had stayed in the $900-980 range for several months. If my holdings are called away, I'll buy them back in a wash sale. I'm just glad to see my patience with gold finally pay off. :-)
The gold contract for December delivery traded up $6.50, or 0.7 percent, at $1,003.20 per troy ounce on the New York Mercantile Exchange. It had gone as high as $1,009.70; that is the highest since it hit a record of $1,033.90 on March 17 last year.
Go gold! My faithful readers (all three of them) know that I am long IAU and GDX. I wrote covered calls on GDX (plus a few extra uncovered ones) and some covered calls on IAU to generate a little bit of yield. I figured why not, as gold had stayed in the $900-980 range for several months. If my holdings are called away, I'll buy them back in a wash sale. I'm just glad to see my patience with gold finally pay off. :-)
Monday, August 11, 2008
Strong Dollar, Strong Equities: Chicken vs. Egg
I like Bespoke Investment Group. They do some original thinking and helped inspire me to create my own virtual investment firm. A good example is this description of how a strong dollar is associated with a bull market in U.S. equities.
Nice job guys, but let's take it a step further. What's the reason for the apparent correlation? Does it mean that investors who hold dollars with more buying power are more likely to demand equities, thus pushing up the value of the stock market? Not if they're foreign investors, because it would take more of a weaker currency to buy a dollar's worth of a U.S. equity share. And not necessarily so for a U.S. investor either, since their stronger dollars would make investments denominated in foreign currencies look more attractive (think about it, just as imported cars and bananas would be cheaper).
Maybe it has something to do with U.S.-based multinationals being able to lower their costs by seeking foreign sources for inputs like raw materials and labor. Costs go down, earnings and share prices go up. Who knows for sure, but the guys at Bespoke are becoming notorious for provoking me to think like this. Thanks, guys; maybe I'll call you the Notorious B.I.G. (meant in jest, of course). :-)
Nice job guys, but let's take it a step further. What's the reason for the apparent correlation? Does it mean that investors who hold dollars with more buying power are more likely to demand equities, thus pushing up the value of the stock market? Not if they're foreign investors, because it would take more of a weaker currency to buy a dollar's worth of a U.S. equity share. And not necessarily so for a U.S. investor either, since their stronger dollars would make investments denominated in foreign currencies look more attractive (think about it, just as imported cars and bananas would be cheaper).
Maybe it has something to do with U.S.-based multinationals being able to lower their costs by seeking foreign sources for inputs like raw materials and labor. Costs go down, earnings and share prices go up. Who knows for sure, but the guys at Bespoke are becoming notorious for provoking me to think like this. Thanks, guys; maybe I'll call you the Notorious B.I.G. (meant in jest, of course). :-)
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