A Truly Ghastly Environment
November 25, 2009 This is a truly ghastly environment for yield-conscious investors. Three-month T-bills yield 0.03%, two-year T-notes 0.73%, five-year T-notes 2.09%, and ten-year T-notes a whopping 3.3%. Who is locking up money for ten years at a 3.3% yield? The Fed’s balance sheet is bloated with... Read the full story
Investment Success
November 20, 2009 In 1981, the Dow Jones Industrial Average ended at 875, 10% lower than its year-end value in 1965. During this wretched 16-year period, blue-chip stocks went nowhere. This was the ice age for stock prices. High and rising inflation and interest rates and big government were to blame.... Read the full story
A Canary in the Coal Mine?
The Citigroup Economic Surprise Index (CESI) accurately forecasted a 60%-plus rally in the stock market in early 2009. The CESI is an indicator designed to measure whether economic data is coming in better or worse than the average analyst’s expectations. A rising index indicates that economic data... Read the full story
The Irrational Mr. Mishkin
November 13, 2009 In the November 9 Financial Times, Frederic Mishkin, a former Federal Reserve governor, proved that the Fed has learned absolutely nothing from its Greenspan-era forays into dangerously low interest rates. Mr. Mishkin claims in the title of his editorial that “Not all bubbles present... Read the full story
Top 10 Mistakes #1
November 6, 2009 The #1 item on my list of the top 10 mistakes investors make is taking a casual go-it-alone approach to investing. Wall Street is dominated by PhDs, MBAs, CFAs, CPAs, attorneys, and other highly trained professionals who spend the vast majority of their waking hours looking for an edge.... Read the full story
Blowing Asset Bubbles
At the Fed’s last meeting, Bernanke and company decided to keep the monetary throttle pegged. Apparently, the massive real-estate bubble inflated by an ultra-loose monetary policy that almost caused a collapse of the global financial system hasn’t changed the Fed’s view on asset price... Read the full story
Class A American Fund Nightmare
My mother is always finding things because she pays attention. And she’s passing that skill along to my kids. After a recent walk, they came back cheering about finding $2. It may as well have been $2,000. You too may be a person who knows how it pays to pay attention, and if so, you’ve probably... Read the full story
