In light of recent events, it's worth reexamining this series I originally posted November 15, 2017. I’ve been asked the question “What do you think of Bitcoin,” as much as any question I’ve received about my website www.yoursurvivalguy.com or my series on the S&P 500. I’ve been in the weeds studying bitcoin (the currency) and Bitcoin (blockchain tech) and I’ll tell you, I haven’t had that “Aha!” religious-like moment experienced by, I’m told, its cult of followers. Count me in the “still skeptical” camp, with a distinction. Bitcoin, the technology, or blockchain, is here to stay … [Read more...]
Archives for November 2017
Are Stocks Cheap Because Interest Rates Are Low?
For the third time in the last 17 years, Federal Reserve researchers are out with a “this-time-is-different” research piece on asset markets. This version seeks to justify the bubble conditions in the stock market that ultra-loose monetary policy has helped foster. Titled Stock Market Valuation and the Macroeconomy, this piece concludes that even though more than a century of stock market data shows that extremes in the cyclically adjusted price-earnings ratio have signaled an overvalued stock market, today’s lower interest rates justify today’s inflated valuations. You can read the full … [Read more...]
With U.S. Out, Japan Takes the Reins on TPP
After the U.S. pulled out of the Trans Pacific Partnership, the other eleven countries involved didn't abandon the effort. Led by Japan, the nations are trying to finish the job on successfully signing the trade pact. Ben Otto reports: Led by Japan, trade negotiators are meeting in this seaside town ahead of the Asia-Pacific Economic Cooperation summit, seeking a revised version of the Trans-Pacific Partnership by suspending clauses that the U.S. had backed for years in negotiations under former President Barack Obama. Paulina Nazal, Chile’s vice minister of trade and TPP chief, said … [Read more...]
The Truth Behind the S&P 500: Part IV
This is the time of year when you need to be extra careful about what you invest in, especially when you’re buying a so-called passive index fund that tracks the S&P 500. I have many concerns about the S&P 500 index approach, as I point out here, here, and here. Add one more issue to the list: “Passive” investors paying for someone else’s actions. Recently, the PNC S&P 500 Index Fund announced it will pay out $4.19 in cap gains per share, as pointed out in by Jason Zweig in his weekly WSJ column The Intelligent Investor. “This week, the fund’s per-share value was around … [Read more...]
Will Telecoms or Automakers Win Smartcar Tech Race?
The FT reports that a battle is brewing between European telecoms and automakers over which technology will be used to power communications with smart cars. The automakers want to use a short-range vehicle to vehicle technology that could be rolled out very soon. Meanwhile the telecoms want car communications to travel over their networks on bandwidths used for cellular communications. Nic Fildes and Peter Campbell write: Carmakers largely favour a short range technology using a dedicated band of spectrum or radio frequencies for car-to-car communication. This vehicle-to-vehicle system, or … [Read more...]
Are Apple Shareholders Married to China?
It seems more and more that sales of iPhones are dominated by the fickle buying habits of Chinese customers. When sales in China are soft, Apple has trouble, when sales in China pick up, Apple feels the love. Are shareholders getting what they think they're getting when they buy shares of Apple? Is the company a high beta bet on Chinese consumer spending? Tripp Mickle reports: China has posed the biggest test for Apple. The iPhone, which surged in sales in 2015 and 2016 behind the iPhone 6, declined in market share during the September quarter to 8.5% from 10% a year earlier as low-cost … [Read more...]
You’ve Read the Last Issue of Intelligence Report: Back to Investors Yield: Part II
“Well I remember the mood of euphoria that gripped the stock market back in the holiday season of year-end 1965,” writes Dick Young in his September 1987 issue of Richard C. Young’s Intelligence Report. “I had just entered the investment business and was a broker at a Boston based member firm of the New Your Stock Exchange. It was an exciting period. The market had climbed by nearly 50% in a three-year period end 1965, and investors were spending their profits literally before they were booked. It was a period of casino mentality—no one could lose. The party ended with a thud, and the … [Read more...]
Junk Bonds go Bonkers
Bloomberg is reporting on the sell-off in high-yield bond ETFs (see here). Volume is soaring and prices are plunging. Part of the problem is the new structure of the high-yield bond market. High-yield bond ETFs have become the tail that can wag the dog. Yesterday, the dollar volume of the four big high-yield bond ETFs spiked to over 57% of the average traded value of the total high-yield bond market. The fast money crowd as well as yield chasers are the driver here. The fast money crowd favors junk bond ETFs over individual bonds because they are believed to have better liquidity. And … [Read more...]
Miles Bridges “Money is the Root of all Evil”
Who is Miles Bridges? Carvell Wallace examines why the Michigan State star basketball player decided to stay in East Lansing, rather than go straight to the NBA as soon as possible. In his lengthy report, Wallace recounts an interview with coach Tom Izzo about Bridges and his reasons for eschewing the NBA draft. Wallace writes: "I asked Miles, 'Why do you want to stay?' His first answer was, 'I want to get to a Final Four and I want to try to win a national championship,'" Izzo says. This was not good enough for Izzo. Only a year earlier, a Spartans team that featured current Bulls guard … [Read more...]
You’ve Read the Last Issue of Intelligence Report: Back to Investors Yield
“Well I remember the mood of euphoria that gripped the stock market back in the holiday season of year-end 1965,” writes Dick Young in his September 1987 issue of Richard C. Young’s Intelligence Report. “I had just entered the investment business and was a broker at a Boston based member firm of the New Your Stock Exchange. It was an exciting period. The market had climbed by nearly 50% in a three-year period end 1965, and investors were spending their profits literally before they were booked. It was a period of casino mentality—no one could lose. The party ended with a thud, and the … [Read more...]