The widely accepted definition of a bear market is a decline of 20% or more from the bull-market high. By that definition, the S&P and the Dow aren’t officially in a bear market, (you wouldn’t have missed the flashing red headlines on CNBC or the big bold typeface on the front page of the paper) but for all practical purposes stocks are now in a bear market. Over 75% of the 3,000 largest U.S. companies are now down at least 20% from their highs. That’s a quorum by my count. The small-cap Russell 2000 index has fallen 26% from its bull-market high. And as of last week, the MSCI … [Read more...]
Archives for February 2016
Friday Free For All: Can Anything Reduce Health Costs?
Companies Fight Healthcare Costs, Together Companies are banding together to fight rising health care costs with group buying they hope will give them more bargaining power with providers. Louise Radnofsky reports at The Wall Street Journal: Twenty major companies—including American Express Co., Macy’s Inc.and Verizon Communications Inc.—are banding together to use their collective data and market power in a bid to hold down the cost of providing workers with health-care benefits. The newly formed alliance of companies, which cover about four million people among them, plan to share … [Read more...]
Surprising Progress made in the Fight for Tax Reform
Here's some pro-growth tax reform that businesses can work with. The Tax Foundation has identified America's best tax reformers of 2015 and honored them with the foundation's Outstanding Achievement in State Tax Reform. This year's honorees are: This year, we honor ten individuals from five states with our award for Outstanding Achievement in State Tax Reform in 2015: Indiana Senator Brandt Hershman (R) Senator Hershman played the lead role in passing reforms that reduced the state’s small business property tax, a tax on machinery and capital, and in the same session eliminated the state’s … [Read more...]
How to Profit from Gold Stocks
Below is a post we did on gold mining stocks about two years ago. We repost this not to boast about how well our gold stocks have done relative to the market since then, but to impress upon our readers just how vital it is for patience to play a dominant role in your investment process. It doesn’t matter what type of investor you are or what type of investment strategy you follow, if you don’t invest with patience, you are going to be challenged to achieve long-term investment success. Patience is fundamental to the investment process we follow at Young Research and for clients of our … [Read more...]
Debt Disaster: It’s Different this Time
The only way to get out of a debt disaster without making hard choices about spending cuts or raising extra revenue via taxes, is to ruin your currency through inflation. The problem for politicians though, is that the U.S. dollar is the nicest house in a bad neighborhood, for now anyway. And the U.S. government can’t let that continue forever if they want to avoid an austerity reckoning. Inflation, for the most part, is how we regularly get out of debt as a country. “The post-WWII debt decline was partly due to strong economic growth, but mainly due to the government shafting bondholders … [Read more...]
S&P Wakes up to Global Currency Wars
Leave it to the nationally recognized ratings agencies to slam the barn door after the horses have left. The clip below is from Bloomberg this morning. Standard & Poor's is about four years late to the party. Currency wars have been a major factor in global financial markets for years now. Our regular readers have been all over this. We hope you have too. Bloomberg Headline from Earlier Today … [Read more...]
Young’s Dividend Stocks Are Back on Top
If you are a dividend-focused investor, especially a global dividend investor, many of the stocks in your portfolio and on your shopping list have been out of favor. Zero rates, negative rates, and money printing all ignited one of the biggest rallies in speculative shares on record. The tried and true have been left behind by the market. The Nasdaq Broad Dividend Achievers index (down 3% in 2015) and the International Dividend Achievers index (down 19% in 2015), a group of stocks that are among the most investable shares for serious long-term investors, have struggled while the FANG stocks … [Read more...]
Corporate Tax Migration No Surprise
You get a real clear picture looking at this map (from the Tax Foundation) on corporate income tax rates by state as to why so many businesses are moving, for example, from California to Austin, Texas. Businesses go to where they’re well-treated. For start-ups, meaning entrepreneurs, that means moving from state to state. For global players it’s moving from country to country. The latest hit to American business comes from Johnson Controls’ merger with Tyco International, headquartered in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to … [Read more...]
Johnson Controls, Latest Corporate Inversion Refugee
It doesn’t take a brain surgeon to realize our treasonous corporate tax rate is bad for business. The latest hit comes from Johnson Controls’ merger with Tyco International, with headquarters in Ireland. The other real kicker here is it that JC had plenty of your (taxpayer) help to stick around. Johnson Controls Inc. was as patriotic as they come back in 2008, when the U.S. auto industry was teetering on bankruptcy and the Glendale-based maker of car parts knew it desperately needed help from U.S. taxpayers. The company's president at the time, Keith Wandell, didn't hesitate to ask … [Read more...]
Japan Jumps on the Monetary Crazy Train
Last week the Bank of Japan decided to go negative with interest rates. The BOJ cut rate on new reserve deposits held at the bank to -0.10% from +0.10% and hinted that it could reduce rates further into negative territory. Why did the BOJ decide that it needed to punish banks with negative rates to stimulate its economy? Apparently after years of running the printing presses at full tilt to buy up everything from government bonds to Japanese stocks (the BOJ owns half of the ETF market in Japan), in what has turned out to be a futile attempt to hit a 2% inflation target, the BOJ has decided … [Read more...]