Non-financial U.S. Debt to GDP is now at its highest level on record. … [Read more...]
Archives for June 2016
Hooked on a Feeling: It’s What Separates the Best from the Rest
Do you want to know what investing is to me? It’s a feeling. To have a feeling for the market, like sailing a boat, is to separate the good investors from the greats. Why is it important to get a feel for the market? Because the knowledge we seek is not always available in reports, and often it’s distorted by reporting bias. It’s why I personally favor anecdotal evidence for the truth about the markets. For example, nothing in the world can replace conversations I have with my clients or emails from you. They give me on-the-ground intelligence I never, ever find in daily stock … [Read more...]
Worthy Reads: Japanese Bank Balks at Negative Rates
Corporate-Bond Yields Fall in Europe as ECB Starts Buying (WSJ) Investors are underestimating the Fed's response to improving financial conditions (Bloomberg) Japanese Bank Balks at Negative Rates (WSJ) Here's the Neighborhood in Your State With the Most Million-Dollar Homes (Fortune) Wholesale Inventories Rise Most In 10 Months, Sales Miss; Ratio Only Higher Post-Lehman (ZeroHedge) … [Read more...]
One Simple Trick for Beating the Collapse of Social Security
Social Security is underfunded, and in one way or another, your retirement is going to be affected. There are two solutions, 1) more money goes into the system, meaning a tax hike or 2) less money comes out of the system, meaning a reduction in benefits. In the first instance, you'll have less of your own money to invest as you see fit, and in the second you'll need to invest more of your disposable income to make up for the loss. Either way there's bound to be pain. Stephen Entin of The Tax Foundation writes: Social Security retirement programs (Old Age and Survivors Insurance, and … [Read more...]
Why a Million Bucks ain’t what it Used to Be
U.S. savers and retired investors who planned to fund their retirement with their life’s savings have been savaged by the Fed’s ultra-low interest rate policy. Yellen & Co., insist on subsidizing big banks and other borrowers with ultra-low rates in an effort to stimulate growth. That effort has clearly fallen flat by any reasonable measure of success. The Fed’s policies have helped knock the yield on 10-year Treasury securities down to a mere 1.70%. You have to save a lot more or plan to spend a lot less if you are going to fund your retirement with a 1.70% yield. But as bad as a 1.70% … [Read more...]
Oil Crosses $50
WTI Crude has crossed the $50 mark for the first time since July of last year. The question now remains, is this a long-term move, or will oil prices get pulled back below the psychologically important benchmark? … [Read more...]
Worthy Reads: Gold appetite in May was the strongest in over 3 years
You Know Little About The Economy (WSJ) Gold appetite in May was the strongest in over 3 years (MarketWatch) What Is Lifting Prices For Oil? Try Asia (WSJ) 10-year Bund yield hits new low (FT) College Loan Glut Turns Sour (WSJ) OECD lead indicator flags first signs of growth stabilization (Reuters) … [Read more...]
“For My Money the Sun Rises and Sets on…”
I found this gem from Richard C. Young’s Intelligence Report, December 1988 issue. Some things never change. When it comes to serious money invested in common stocks, for my money, the sun rises and sets on dividends. With dividends as your friend, you have the miracle of compounding on your side through thick and thin. What question should you ask first before you invest in common stocks? You ask, what is today's yield on stocks compared to the historical yield on stocks? If the current yield is higher than the average yield over many cycles, you can take advantage of a period of value. … [Read more...]
International Orgs Paint Cautious Picture of Economic Future
The OECD and the World Bank have both recently released forecasts of future GDP trajectory. The OECD's Composite Leading Indicators (CLIs) index fell in April, as it has done since January 2015. The index is built to lead the business cycle by about six months, and to project a slowdown or even a recession with a declining trend line. Despite the current negative trend worldwide, the index did highlight some spots of optimism, with stabilization in the U.S. and China, as well as for Russia and Brazil. While the OECD is predicting stabilization, the World Bank is projecting a more … [Read more...]
My Favorite Stock-Market Gauge
In constructing the RAGE Gauge, I’m using the dividend yield. I will not buy a stock unless it pays a dividend. Plain and simple. Take a look at the dividend yield today compared to any other point in post WWII history and you get an idea for why I chose the name: RAGE Gauge … [Read more...]
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