In speaking with a prospective client yesterday, he told me he’s been in Richard C. Young’s Maximizers portfolio for years. He said he uses an advisor but told him, “Here’s what I want to own, can you do it for me?” And he did. Fast forward—after making a big contribution to the account this year, his “guy” wants to put the money in some hedge fund deal. My new client said, “Don’t do a thing.” The “guy” was chasing money–chasing money with other people’s money. What’s there to lose, right? In times like these, you need to protect your assets like they’re the last ones you’ll ever … [Read more...]
Archives for January 2021
What Is the Stock Market’s Link to the Economy?
At The Wall Street Journal, Justin Lahart examines the stock market's link to the economy, and whether the market could fall even during strong economic growth. He writes: We keep being reminded that the stock market isn’t the economy. But then, is it possible for the market to go into a long bear run even if the economy booms? Yes, although there is little record of it ever happening. U.S. stocks’ performance over the past year has been more than breathtaking. Even though the U.S. economy is in decidedly worse shape than it was before the Covid-19 crisis started, with millions of … [Read more...]
Smith Family Robinson in Live Free or Die, NH
Where should you live today? If you’ve taken an online survey, you might find yourself a perfect fit in any small town, USA. Combine this with your politics and you might find yourself living in 1776 or not far from Plymouth Rock with the pilgrims. Well that’s not gonna happen. So now what? Are you familiar with the Swiss Way? Or the Swiss Family Robinson? It’s a lifestyle. For me? I spend time at my log cabin in Live Free or Die, NH and coastal Newport, RI. We broke ground in NH for the winter skiing, but as the saying goes out west: “Visit for the winters, stay for the summers.” There’s … [Read more...]
Dick Young’s Safe America: Chapter 1, Part I
Debbie and I are neither members of any political party nor contribute to any PAC. Our research interest is policy rather than research. Our methodology, for over four decades, has centered on inference reading and anecdotal evidence gathering. Originally posted on Young's World Money Forecast. … [Read more...]
Whether Through Audacity or Ignorance, Stock Fundamentals Are Being Ignored
James Mackintosh reports at the Wall Street Journal that stock fundamentals are being ignored by investors. It's not clear whether the cause is an influx of new investors who are ignorant of fundamental analysis, or heightened appetite for risk. Whatever it is, it's probably unsafe for the market. Mackintosh writes: Sometimes it’s hard to argue that market capitalism has any chance of correctly allocating money to the companies that can use it best. Case in point: Stock-market performance this year has been driven by the raw share price, with lower-priced stocks doing better and higher-priced … [Read more...]
Happy Martin Luther King Jr. Day!
The Fed is Sacrificing Retirees to Save the Banks
You may have heard three cheers from Wall St. recently when JPMorgan Chase & Co. announced its "highest-ever quarterly profit." The bank, America's largest at the moment, got an extra boost by recognizing that some loans it had previously written off were actually going to pay. Good for the bank, right? Sure, but to make it happen the Fed is holding interest rates at nearly zero and sacrificing savers and retirees to save big banks. There are no plans to change course or to have banks share in the pain being suffered by America's savers and retirees. The NY Times reported this morning … [Read more...]
Jim Simons’s Renaissance Technologies vs. Internet Forum Traders
This story is a familiar one if you have been active in the markets for a few decades. It starts with the WSJ reporting on Jim Simons's decision to step down as Chairman of his firm, Renaissance Technologies. As the Wall Street Journal so kindly points out in this morning’s article, Renaissance Technologies public funds had a real ugly year in 2020. They were down 20-30%. Simons is one of the most successful hedge fund managers on Wall Street—ever! Nothing like a parting gut-punch from the most widely read financial newspaper in the U.S after an otherwise brilliant career. Classy … [Read more...]
February RAGE Gauge: Americans Focusing on What’s In Front of Them
You think Americans are feeling elevated risk? You wouldn't know it by looking at the stock market. But how are you doing on a local level? Are you taking small steps every day to secure your situation? You don’t have to change your world in a day. Focus on what's right in front of you. That's what's most important. Here are some thoughts looking out at my backyard: Are you seeing local prices higher or lower? Here, the price for food at the grocery store is up, while remaining pretty steady at restaurants. What isn't going up is the yield you're earning on the S&P 500. Yields are … [Read more...]
Biden Plans to Spend Trillions More on COVID-19 Stimulus
The Biden team has announced that they plan on spending trillions of dollars (in addition to the trillions already spent) on COVID-19 stimulus and recovery. The New York Times reports: With millions still struggling, the initial stimulus package that Mr. Biden will unveil is expected to include money to complete $2,000 direct payments to individuals and aid to small businesses and local and state governments, Mr. Deese said. Others briefed on Mr. Biden’s thinking said he would also call for the first piece of legislation to include extending the duration of benefits for the long-term … [Read more...]
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