My Favorite Leading Indicator
My favorite leading indicator is Young Research’s Moving the Goods Index. Moving the Goods is a market-capitalization-weighted index of non-airline transportation companies. Transportation companies are some of the first businesses to realize a change in economic activity. You have to move the goods... Read the full story
Are Small Stocks Safer Than Large Stocks?
A recent study in Financial Analysts Journal (FAJ) found that a portfolio of small-capitalization stocks is no more risky than a portfolio of large-capitalization stocks. And if the number of stocks in a small-cap portfolio exceeds 25 or so, that portfolio may be less risky than a large-cap portfolio.... Read the full story
If Greece Fails, is Portugal Next?
Greek government bond yields have surged to over 16% in recent days. If Germany doesn’t step into to save the Greeks, a default is not out of the question. But the larger problems for Europe are the risk of contagion. Bond yields on other overly indebted euro-area countries are now surging. Portugal... Read the full story
Beat the S&P 500 by 2 to 1
My chart shows the long-term performance of $1 invested in the consumer non-durables sector in June of 1926 to $1 invested in the S&P 500 at the same time. The consumer non-durables industry includes companies that make and sell everyday items. Demand for non-durables, or what are more commonly referred... Read the full story
The #1 Investment Book
You may be surprised to hear that Moneyball by Michael Lewis is my #1 investment book, given that it’s about baseball, not Wall Street or the stock market. Moneyball is a story about how one of the poorest teams in baseball, the Oakland A’s, and their GM, Billy Beane, built a roster chock full of... Read the full story
A Wake Up to Governments & The First G7 Nations Raise Rates
IMF Warns of ‘New Phase’ in Crisis – By Tom Barkley and Bob Davis, The Wall Street Journal “Higher debt levels have the potential for spillovers across financial systems, and to impact financial stability,” the IMF said, noting that debt levels among advanced countries have... Read the full story
Emerging Market Stocks Up Over 110%
Emerging market stocks are up over 110% since hitting lows in March of last year. Net flows into foreign stock funds, much of it into emerging market funds, have been positive for 11 months in a row while U.S. stock funds have seen outflows in six of the last seven months. Those investors liquidating... Read the full story
Stay Defensive
Confidence in the economic recovery is improving, and retail investors are moving back into equities. Here are four reasons to remain defensive in the face of this renewed optimism: Stocks are now discounting a sustained and robust economic recovery. A second contraction in economic output is no longer... Read the full story
Comparing Bull Markets
Based on the historical performance of four bull markets that were preceded by devastating bear markets, the current bull market is approaching exhaustion. Read More →
The Future of Oil Demand
According to the International Energy Agency, Organisation for Economic Co-operation and Development (OECD) countries’–i.e., rich countries’–oil demand peaked in 2005 near 50 million barrels per day. OECD oil demand is down 10% from the 2005 high, yet total oil demand is up over the same... Read the full story
