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Investment Research Since 1978

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Archives for January 2018

This is Why We Don’t Recommend Apple Stock

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We don’t invest in Apple stock and we probably never will given its current mix of businesses. That may come as a surprise considering that Apple is the largest publicly traded company in the United States. It will come as an even bigger surprise when you learn that Apple pays a dividend, has increased that dividend at a 25%+ compounded annual growth rate over the last five years, has loads of cash on the balance sheet, and trades at a discounted price-to-earnings multiple. For a dividend focused, value conscious investment firm like ours, that sounds like an inside straight. The … [Read more...]

Gold Strong on Dollar Fears

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With dollar weakness spurred on by comments from Treasury Secretary Steve Mnuchin at the World Economic Forum in Davos that suggested the Trump administration might be targeting a weaker currency, gold prices are strengthening. While the tax reforms passed by the Trump administration have certainly buoyed optimism about the American economy, that optimism also comes with some expectation that inflation may tick up. Gold is a hedge against inflation, and a weakening currency. It's no surprise investors are taking interest once again in the precious metals market. Amrith Ramkumar … [Read more...]

The End of the Great Bond Bull Market

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In September of 1981, 10-Year Treasury rates peaked at almost 16%. From that high, interest rates went on a three-and-a-half decade secular decline that colored every asset class in the world. Bond prices benefited from the decline in interest rates, but so did stocks, real estate, private equity, venture capital, and art among other asset classes. In July of 2016, the multi-decade bull market in bonds ended when the 10-year Treasury rate hit 1.31%. Rates moved up following the 2016 low, but only recently have they broken above their three-decade downward sloping trendline. The breakout may … [Read more...]

Push for Business Freedom by Macron has France’s Economy Booming

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Reforms implemented quickly by new President Emmanuel Macron have already had a positive effect on the French economy. The loosening of France's notoriously tough labor laws has boosted business confidence. The reforms have also released pent-up demand, driving the economy to some of its best growth in a decade. Paul Hannon and William Horobin report: Firms and investors say the election of French President Emmanuel Macron and his first steps to cut red tape and taxes are unleashing pent-up demand. Investment in France by nonfinancial companies rose 4.3% in 2017, the fastest increase in a … [Read more...]

Connecticut: Big Government Utopia Begins to Crack

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After decades of close relationships with the public sector unions working for their towns and cities, mayors are begging to be protected from collective bargaining. With money running out, and undiminished power held by unions, mayors are finally beginning to understand why having powerful public sector unions makes it hard to balance budgets and provide services to citizens. As negotiations have become deadlocked with public unions demanding more from the ailing cities and towns in Connecticut, the mayors are begging state legislators to change the rules to give them more power in … [Read more...]

Illinois is About to Stick its Head Deeper in the Sand

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For years Illinois has underfunded its five pension systems. For years I have been waving a red warning flag about the American pension charade (see here, here, here, and here for a small sample), but public pensions are controlled directly or indirectly by politicians. Those politicians don't ever want to subject their constituents to the painful measures it will take to fully fund pensions, and so rather than doing what is necessary to make the systems solvent long term, they place their faith in overly optimistic return assumptions. Illinois is trying one last ditch effort, using the … [Read more...]

Is the Quantum Revolution Imminent?

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There's a race on in the world of technology to build working quantum computers. The biggest technology companies in the world, including IBM, Google, and Microsoft are working hard to make breakthroughs in the quantum tech that could change computing forever. Now, Microsoft and Google are claiming that they are close to some serious progress. Richard Waters writes in the FT: The two impending milestones, from Microsoft and Google, will highlight how ideas until recently at the frontiers of theoretical physics are quickly taking practical form. Despite beginning work on quantum computing … [Read more...]

Is Your City Prepared for the Storm?

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Boston is preparing for the Great Flood. After watching water inundate New York's subway system, Boston officials began to examine the possibilities of heavy flooding in Bean Town. The outlook was not good. It's possible your city is in the same position. Read here how Boston is planning for disaster: The estimated long-term tab for storm-proofing the Big Dig: $196 million. Using Mr. Miller’s model, the city in October identified between $151 million and $253 million in projects for two vulnerable neighborhoods by 2040. The cost for securing the rest of Boston? Nobody has even tried to … [Read more...]

Your First Step Toward Investment Success

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For over four decades, I have offered strategies and insights to help individual investors like you. My primary goal, whether in my monthly strategy reports, at investment seminars, or for current clients of my money management firm, has been helping investors achieve long-term investment success. What you buy, what you sell, what price you pay, and which strategies you pursue all matter for your investment success, but they aren’t the most important steps in the process. Focusing first on what the “good buys” are is putting the horse before the cart. What’s your goal? First define what … [Read more...]