Following the money is always a good idea. Ian Talley of The Wall Street Journal explains that rising stock prices led to a new record in the value of foreign owned assets in America in the fourth quarter of 2013. Foreign investment in the U.S. hit a fresh record in the final quarter of 2013 as rising stock prices boosted the value of American assets, according to figures released Wednesday. The value of foreign investment in the U.S. hit $26.54 trillion the fourth quarter, up $777.8 billion from the previous quarter and far surpassing a $372.1 billion increase in U.S. investments abroad, … [Read more...]
Dow Theory Breakdown
There's trouble a brewing according to Dow Theory. The Wall Street Journal's Paul Vigna reports here. This time it's Dow theory adherents, who are troubled that there's been a breakdown this month that could spell trouble for the bull market, according to research the Wall Street Journal cited Tuesday. The market looked weak on Monday, saved only by a late spurt of buying that narrowed the losses. It may not be the last time it looks weak. The much ballyhooed Dow Theory is flashing a warning sign: While the Dow Transports made a new high in March, the Dow Industrials did not. The … [Read more...]
Bitcoin Tax Grab
The latest in the Bitcoin tax grab. Bloomberg's Richard Rubin and Carter Dougherty explain how the IRS has made it more difficult for Bitcoin users to make purchases by classifying the crypt0-currency as property for tax purposes. The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue. Today’s IRS guidance will provide certainty for Bitcoin investors, along with income-tax liability that wasn’t specified before. Purchasing a $2 cup of … [Read more...]
It’s Never too Early to Retire
Controlling what you spend has some benefits. Forbes talked to two extreme early retirees and developed a three step process that could work if you don't mind forgoing some of the finer things. Here’s the three-step process Fisker, Mr. Money Mustache and others recommend to pull it off: 1. Embrace a very frugal lifestyle. That means cutting back substantially on biggies like your home and car expenses as well as learning to cook (to save on dining out and prepared foods) and to do more things yourself rather than pay someone else to do them. 2. Save like crazy — ideally at least 75% of … [Read more...]
Food Inflation: Largest Increase Since Sep ’11
According to the latest report from the Bureau of Labor Statistics, inflation is under control. But for those of us who like to eat it's worth noting that food inflation had the largest increase since September 2011. String together a few months of the reported 0.4 percent increase in the food index and it will hurt at the check-out counter. But in reality any increase in inflation hurts more than it should. That's because the Fed has left savers defenseless with it's pathetic zero percent interest rates. Consumer Price Index Data for February 2014 Food The food index rose 0.4 percent … [Read more...]
Jeremy Grantham’s Wise Words
It's always a good idea to pay attention to Jeremy Grantham. Jeremy Grantham's interesting words from a Barron's interview. What else are you seeing in terms of sentiment? There is a high level of enthusiasm from the financial professionals, hedge funds in particular. This time you have a very high level of confidence from the professionals—but not a very high level of confidence from the individual investors. The individuals are a bit more down to earth. They felt the pain of 2009 longer than the institutions did, and they have been slow to come back into stocks when you look at net … [Read more...]
The Rich Man
Your approach to this market needs to be like that of my favored prognosticator: the rich man. You see the rich man, as Dow theory legend Richard Russell says, doesn't need the markets. RULE 3: RICH MAN, POOR MAN: In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE MARKETS. I can't begin to tell you what a difference that makes, both in one's mental attitude and in the way one actually handles one's money. The wealthy investor … [Read more...]
Federal Reserve on the Right Track
The Federal Reserve's taper is the right move for the economy and eventually the markets. It moves capital away from the well-connected and towards those who need it most, small businesses. The big dogs on Wall Street, the well-connected, don't like it. What a surprise as David Malpass writes in his WSJ editorial: The evolution in Fed policy may be enough to finally break the economy out of slow growth. The magnitudes are certainly large enough to move the needle. On the current tapering path, the Fed will cut its new bank borrowing in half to $500 billion in 2014 and $0 in 2015. The … [Read more...]
Investing to Win the War
In my close to 20 years working with investors I have found gauging one's risk tolerance is more art than science. There are models galore that will give you an "appropriate" allocation for your age, income needs etc. But often times that's thrown out the window when times get tough. And tough they have gotten, for example, in the 2000 tech bust and the recent crisis in 2008. It's amazing to me how quickly the rough times have been forgotten. In the good times, most investors feel they're thick skinned and can handle the volatility in the market. That is until they start losing some serious … [Read more...]
Thanks for the Investment and Good Luck!
Some of the big dogs in private equity are selling. Good luck to those who stick around. The WSJ reports: Shares of private-equity firms are soaring, and buyout barons are selling. Top executives at three publicly traded private-equity firms have sold more than $500 million of their firms' stock over the past year, according to securities filings. The most recent sellers are Carlyle Group LP co-founders co-Chief Executive William Conway and Chairman Daniel D'Aniello, who have sold between $39.6 million and $48.9 million of stock apiece, according to a securities filing Thursday. The … [Read more...]
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