Anthony "The Mooch" Scaramucci, founder of SkyBridge Capital and the SALT conference is an adviser to the Trump administration. He has promised to repeal the Department of Labor rule forcing brokerages to act as fiduciaries for retirement account investors. If you’re uneasy about the appointment of “The Mooch,” make sure you’re doing business with a boutique investment counsel service such as Richard C. Young & Co., Ltd., that is held to higher fiduciary standard (read more about this crucial investor protection here, here and here). Brian Hershberg of The Wall Street Journal details … [Read more...]
Archives for January 2017
Does Big Business Know How to Make Unearned Wealth with Politics?
Cato Institute’s Senior Fellow Dan Mitchell explains that little companies, all things considered, fight against excessive government. I like small businesses more than big businesses. Not because I'm against large companies, per se, but rather because big businesses often use their political influence to seek unearned and undeserved wealth. The only bad policy associated with modest-sized firms is the Small Business Administration. And I suspect the majority of little firms wouldn't even notice or care if that silly bit of intervention was shut down. Rather than seeking handouts, small … [Read more...]
This is the Milestone You Should Watch, not Dow 20,000
Many investors are focused on the Dow hitting the 20,000 milestone, but compared to another key technical level, Dow 20,000 is a B-lister. Here the Financial Times points out that the key technical indicator to watch is the 2.60% yield level on the 10-year treasury note. According to former “Bond King” Bill Gross, if the 10-year yield crosses the 2.60% threshold, it will signal the start of a secular bear market in bonds. The FT has more of the details. The Janus portfolio manager, dubbed the “Bond King”, warned that if the 10-year yield crosses that threshold, it will signal the start of … [Read more...]
This is What Happens When a Few Massive Companies Outweigh the Others
You need perspective in this market, especially when it seems like everyone is doing the same thing. One way to gain it is to work on a tree lined street in Newport, RI. Here in January when it’s 18 degrees, the constant wind brings new meaning to the task of "asset protection." It’s a stark contrast to the glitzy lobbies of NYC with their boutiques selling cold pressed coffee or flavored lattes. That sounds pretty nice right about now. Life has a way of giving you perspective whether you like it or not. Here’s my perspective on indexing and the S&P 500. The S&P 500 is a market cap … [Read more...]
Sears Same Store Sales Plummeted 13% in November and December
Eddie Lampert’s hedge fund company owns more than 50% of the shares and is the company’s largest creditor, according to The Wall Street Journal. Struggling retailer Sears Holdings Corp. has bought itself some breathing room through maneuvers that include the sale of its Craftsman brand for $900 million and the closure of 150 additional stores as it grapples with a prolonged sales slump and mounting losses. The company has suffered through several weak quarters and warned Thursday that same-store sales fell as much as 13% in November and December. Over the past five years it has booked $8.2 … [Read more...]
Jeremy Grantham, Simply One of the Best Investors of All Time
Given my pronouncement above, is it not odd that The Wall Street Journal has chosen to give Mr. Grantham a beat down? What a travesty and disservice to Journal readers. I remember the same treatment given to another hall of fame fund manager, John Neff, during one of Mr. Neff’s many out-of-phase periods. I have rigorously and diligently followed both Mr. Neff’s and Mr. Grantham’s careers with reverence. And my conclusion, after decades of monitoring, is that an investor could not have found a more dedicated and prescient steward of their funds than either Mr. Grantham or Mr. Neff. I feel … [Read more...]
Euphoria is Rampant in this Segment of the Market
Last week we pointed out a major bullish shift in investor sentiment readings toward stocks (see here). We suggested that if bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria, the surge in sentiment may be an indicator that we are in the fourth and final stage of the rally. In another sign that the dominant mood in the market may be euphoria, Zerohedge relays a report from TrimTabs on fund flows into ETFs. TrimTabs is a research outfit focused on equity market liquidity. TrimTabs called the inflows into U.S. equity ETFs since the election the … [Read more...]
Once Frightened Boomers are Now in a Hurry for Retirement
During the years following the financial crisis Baby Boomers held on to their jobs. Either loath to abandon their good pay or to draw from their beaten down savings, they delayed retirement. Now, perhaps emboldened by the stock market hitting new highs, Boomers are more inclined to head for the exits. Bloomberg reports that 800,000 Boomers opted to retire in the fourth quarter of 2016. For more than five years, the six-month trend for this figure — a significant demographic source of downward pressure on the headline labor force participation rate — had been heading higher, before plateauing … [Read more...]
January 2017 RAGE Gauge Surprise
The numbers are in and my January RAGE Gauge has never looked better, with a reading of Neutral. This is not a stock market indicator, far from it, stocks are not cheap. It is a pulse of the social, political and economic landscape using a proprietary method I’ve devised and tweaked over time. I use it as a back-of-a-napkin snapshot to give me a feel for the current landscape. One component I like to use is background checks, a barometer for final handgun sales, and a measure of fear. The December reading is the first since April 2014 that didn’t produce a record high for its month. This … [Read more...]
This is the Blue Print to Make America’s Financial Economy Great Again
Trump’s victory offers an opportunity to finally enact some of the reforms needed to rein in the Fed and put a stop to the Fed’s incestuous relationship with the academic economic establishment. Here, Danielle DiMartino Booth, a former advisor to the president of the Federal Reserve Bank of Dallas, calls out some of the problems (there are many more) with the Fed and solutions to improve the institution. The first thing an engaged Congress can do is prevent future missteps on the Fed’s part. In November 1977, the Federal Reserve Act was revised to expand the central bank's mandate to … [Read more...]
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