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Archives for April 2016

Dan Mitchell: Lessons from State Tax Policy

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Here Dan Mitchell of the Cato Institute discusses why some states deserve kudos for their tax policies, and some states deserve mockery. Just like with nations, there are many factors that determine whether a state is hindering or enabling economic growth. But I’m very drawn to one variable, which is whether there’s a state income tax. If the answer is no, then it’s quite likely that it will enjoy better-than-average economic performance (and if a state makes the mistake of having an income tax, then a flat tax will be considerably less destructive than a so-called progressive … [Read more...]

Worthy Reads: The $2 Trillion Stock

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The $2 Trillion Stock (WSJ) Americans Prefer Saving over Spending (yahoo finance) Here's What's Keeping the Stock Market Up (Fortune) High Speed Traders Takeover Treasury Market (Business Insider) Smart Money Continues to Dump Stocks (Zerohedge) … [Read more...]

The Monday Melee: Home Sales Sputter

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New Home Sales Slide Again For the third month in a row sales of new homes have fallen. The AP reports: "New-home sales slipped 1.5 percent last month to a seasonally adjusted annual rate of 511,000, the Commerce Department said Monday. That rate has steadily dropped from 519,000 in February and 521,000 in January. Sales plummeted 23.6 percent in the West, which has been prone to volatile swings in sales as one of the nation's priciest housing markets." Slump in Home Buying Hits the West Hardest U.S. and Canada have Some of the Costliest Housing in the World MAP: Seriously … [Read more...]

What’s Working in the Stock Market this Year?

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The table below ranks the 24 Industry Groups in S&P 500 by their YTD performance. What is the best performing industry group YTD? Energy, the same industry group that was last year’s worst performer. I also see utilities, materials, and transportation stocks among this year’s big winners. All three were big losers last year. How are last year’s big winners doing this year? Last year’s best performing industry groups included the retailing, software and services, and consumer services groups. All three are down YTD while the S&P 500 as a whole is in the green. This reversal of … [Read more...]

Worthy Reads: The Rally of a Lifetime

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The Rally of a Lifetime (Bloomberg) see also How to Profit from Gold Stocks Bank of Japan Floats Retooling of Negative Rates (Bloomberg) Cable Companies show Cord Cutters Who's Boss (WSJ) Carry Trade Risk (CFA Institute) Business is Hard (fool.com) Financial Advice for Game of Thrones Characters (Money) … [Read more...]

How Do Stocks Perform in a Presidential Election Year

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The chart below shows the average performance of the S&P 500 (not including dividends) during all Presidential Election Years from 1948-2012 along with the YTD performance of the S&P 500. The horizontal scale is trading days from December 31. After a big correction to start the year, stocks are back on track with their historical Election Year performance. … [Read more...]

How to Become a Millionaire, Part II

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The two most important words in investing, as I have been writing in Richard C. Young's Intelligence Report for decades, are compound interest. Albert Einstein described compound interest as the greatest mathematical discovery of all time. Ben Franklin wrote on compound interest, “Tis the stone that will turn your lead into gold.” Charles Munger, longtime partner to Warren Buffett has often said, “Understanding the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things.” Richardcyoung.com contributor, and my longest friend in the … [Read more...]

Rogers: U.S. Recession Within a Year

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Billionaire investor Sam Zell is predicting global economic turmoil will push the U.S. into recession. Janet Morissey writes at The Wall Street Journal: Billionaire investor Sam Zell, who correctly called the top of the last commercial real-estate cycle, is predicting global problems will likely push the U.S. into a recession in the next year. While the U.S. is humming along fine at the moment, Mr. Zell warned that it isn’t immune to problems in the world economy. Those problems include low oil prices, falling import demand from emerging economies, volatile financial markets, deflation, … [Read more...]

Worthy Reads: How to Invest Like You are a Millionaire

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How to Invest Like You are a Millionaire (richardcyoung.com) Goldman Says Short the Yen (Moneybeat) Is Coke about to Make another Major Marketing Blunder (Quartz) European Stocks Set to Take Off (WSJ) The Rise and Fall of the PC in One Chart (MarketWatch) The Real Reason Millennials Aren't Buying Real Estate (Money) … [Read more...]