In case the Bitcoin and FAANG stock manias have you envious and pondering a decision to abandon a thoughtfully crafted investment plan, we offer you the following wet blanket. This is now the most expensive stock market on record. The S&P 500 price-to-sales ratio shows that stocks have pushed through the highs, relative to sales, reached at the peak of the biggest stock market bubble in history. High valuations aren’t usually a catalyst for a bear market, but starting valuations are still the single best indicator of long-term returns—with added emphasis on the long-term. … [Read more...]
Archives for November 2017
Are Hedge Funders Packing Their Bags in Anticipation of Tax Reform?
As a tax reform bill inches its way through Congress, some of its provisions may have wealthy residents of high tax states considering a move. In states like Connecticut, New York and New Jersey, home to many high earning hedge funders, the state budgets themselves may be under threat if wealthy residents decide to bolt for lower taxes locales. Bloomberg reports: The problem for the Connecticut hedge-fund set -- and, more broadly, for a lot of the Wall Street crowd -- is that Republican proposals in both the House and Senate would drive up taxes for many high-earners in the New York City … [Read more...]
What’s at Risk in NAFTA Talks?
Apparently your flat screen TV is at risk of seeing a price hike according to the Wall Street Journal. If NAFTA breaks down, the Journal reports, Americans will see the cost of buying a new television rise. One importer tells the Journal that even at twice the price, the TVs couldn't be made in America profitably. Robbie Whelan and Santiago Pérez report: Ending the North American Free Trade Agreement risks shifting more production of TV components to Asia, prompting higher prices for U.S. consumers and not resulting in new American jobs, according to manufacturing executives and … [Read more...]
You’ve Read the Last Issue of Intelligence Report: Dave Hammer on WD-40
Turns out you can survive and thrive with WD-40 in your pantry drawer and your portfolio. “During my 14-year run in the institutional research and trading business in Boston, the finest analyst with whom I worked was oil analyst Dave Hammer. Since 1990 Dave has been the managing partner of Hammer Asset Management. We stay in touch to this day,” explains Dick Young. You can see why from his interview in the September 1987 issue of Richard C. Young’s Intelligence Report (excerpt found below). (Edited for length and clarity) This Month’s Special Guest David Hammer He plays … [Read more...]
Goldman: Be Afraid, Pain is Coming
A recent analysis by Goldman Sachs says the last time valuations were so high for so many parts of the market-including stocks, bonds and credit-was 1900. That figure should be startling to anyone invested today looking for return tomorrow. Recently I wrote to you about Jack Bogle and his predictions of 4% returns for some time. Even those may be too optimistic in the future reality painted by Goldman. Bloomberg reports: A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to … [Read more...]
Faster Food: Wal-Mart and Kroger Demand Suppliers Speed Up
With the threat of Amazon's Whole Foods business on their minds, executives at Wal-Mart and Kroger, two of America's largest grocers, are focusing on driving down costs so they can better compete on price. To increase efficiency, the grocers are targeting late deliveries. According to the Food Marketing Institute, grocers are losing $75 billion a year in sales thanks to out of stock products and other unsalable items. That makes suppliers The Wall Street Journal reports: The country’s biggest grocers are increasingly demanding their suppliers deliver on time, imposing fines for late … [Read more...]
What do I think of Bitcoin? Part IV
When exactly should you start worrying about bitcoin volatility? Online trading platforms are beginning to get concerned about the crypto-currency's meteoric rise. Hannah Murphy writes for the Financial Times: Bitcoin’s value has risen more than 850 per cent from about $1,000 at the start of the year to a high on Monday of $9,747, an ascent that masks dramatic drops along the way. IG Group, the world’s largest online trading platform, told the Financial Times it had suspended trading of some of its bitcoin derivatives on Monday after roaring demand for the products left the company facing … [Read more...]
Is China’s Economy Addicted to Real Estate?
In The Wall Street Journal, Nathaniel Taplin explains the link between steel and coal companies and the real estate market in China. The commodity industries are heavily indebted, and if the real estate market turns south, they might be worst hit. Taplin writes: The improvement in steel and coal finances—the two most vulnerable indebted sectors—has been real. Both industries were close to insolvent by late 2015, with aggregate operating earnings just 1.5 times and 1.8 times interest costs, respectively. Two years later, the ratio in both sectors is around 5 times. Unfortunately, only part … [Read more...]
Time Inc. Gets New Ownership
Time Inc., has been purchased by Meredith Corporation, publisher of Better Homes and Gardens and Family Circle. The publishing industry has been in turmoil for quite some time now. The Internet and the ubiquity of video have eaten into the time Americans devote to print media. Despite the stable of powerhouse brand magazines that Time Inc. owns, such as Time, Fortune and Sports Illustrated. NPR media correspondent David Folkenflik explains that it could be some of the smaller titles that spurred the purchase of Time by Meredith. Here's an excerpt of the transcript of an interview … [Read more...]
La Grande Epicerie’s Vast Selection Now Available on the Right Bank
La Grande Épicerie de Paris, on the ground floor of Le Bon Marché Rive Gauche (24 Rue de Sèvres in the 7th), has long been one of the best food halls in Paris. Now shoppers can get the same quality at the new La Grande Épicerie de Paris Rive Droite, on the Right Bank of the Seine. LVMH announced the opening, writing: La Grande Epicerie de Paris, the ultimate in Paris gourmet food stores on the Left Bank, is crossing the Seine for the first time with a new Right Bank food emporium on the bustling rue de Passy! With a vast selection of exceptional products on four levels, this new fine foods … [Read more...]
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