Speaking at the Bloomberg Global Asset Owners Forum recently, Ray Dalio sounded the alarm on central bank intervention in economies. Bloomberg reports: “Today the economy and the markets are driven by the central banks and the coordination with the central government,” said Dalio, speaking at the Bloomberg Global Asset Owners Forum on Thursday. As a result, “capital markets are not free markets allocating resources in traditional ways.” The Covid-19 pandemic brought economic activity to a standstill and sent markets spiraling downward in March. The Federal Reserve’s … [Read more...]
Every Stock You Own Deserves a Decision
There’s never been a better time to get your financial house in order. Don’t let inertia beat you down. It’s time to get up, put pen to paper, and make sure everything you own deserves a place in your portfolio or decide if it has served its time. Treat your portfolio with the love and care you have for your home and garden and, believe me, good things will happen for you and your family. Make it a good day. Life is Good: You’re Ready to Protect Your Turf Your Retirement Life: Investment Planning in One Chart Your Retirement Life: Parents, do You have an Investment … [Read more...]
My Biggest Investing Quarter Ever
Due to a convergence in timing, I was able to make by far the biggest commitment to the stock market in my life during late March and into the second quarter of 2020. On 31 March 2020, I posted My Three Week-Long Investing Program. It led off, “I am ramping it up over the month of April and into May." As reported 30 June in the WSJ, U.S stocks finished their best quarter in 20 years. I also posted the exact areas I was investing in and why. No way I could have expected such quick and massive returns. Given that Joe Biden is apparently attempting to put a quick end to it all by … [Read more...]
What’s Coming in the Next Stimulus Package?
Even though the budget deficit is projected to reach nearly $4 trillion this year, there will be another stimulus package. Balanced budgets and fiscal conservatism fly out the window in an election year. Barron’s reports on what may be in the next package: The U.S. fiscal and monetary response to the coronavirus crisis was extraordinary by historical standards, Ernie Tedeschi, managing director and policy economist for Evercore ISI, told Barron’s readers Tuesday. But the considerable measure was not without its gaps. Historically, “I don’t think we’ve done anything close to the … [Read more...]
Your Retirement Life: Life is Good: You’re Ready to Protect Your Turf
You’re telling me your life is good and, in times like these, it is so great to hear. You’re telling me, especially if you’re retired, that your life hasn’t changed all that much. No, you don’t see family as much (you’re looking forward to the 4th when you might), but you’re keeping busy. Here are a few items we spoke about this week: You’re golfing a lot. But not as well as you’d like to. At your recent doctor’s appointment, you asked for a prescription to get you straighter off the tee. You’re building a deck. That is, if you can find pressure-treated wood. I spoke with two … [Read more...]
Tesla Now the World’s Largest Automaker
Tesla is now the world’s largest automaker as measured by market value. Investors value the company at $205 billion. Tesla is projected to produce about 500,000 cars this year. Toyota Motor, now the second-largest automaker, produces close to 9 million cars annually. In other words, Toyota produces 18X more vehicles than Tesla, but the two companies have the same market value. Why is Tesla worth so much when it produces so little? Despite a global pandemic and a stock market crash in March, we are back to a "fairytales and fantasies" stock market. Tesla isn’t an auto company, it’s a … [Read more...]
Record Increase in Pending Home Sales
The National Association of Realtors reported a record rise in pending home sales in May, with 44.3% growth. They write: Pending home sales mounted a record comeback in May, seeing encouraging contract activity after two previous months of declines brought on by the coronavirus pandemic, according to the National Association of Realtors®. Every major region recorded an increase in month-over-month pending home sales transactions, while the South also experienced a year-over-year increase in pending transactions. The Pending Home Sales Index … [Read more...]
The Fed Is Dealing Massive Doses of Monetary Drugs to the Market
In a sweeping piece in The Wall Street Journal, Jim Grant likens the actions of Fed Chairman Jerome Powell to those of a drug dealer, feeding highly addictive monetary drugs to the market, with no regard for the side effects. In the piece, Grant notes that like the portfolio managers of CalPERS who are California Dreamin', Powell explains his actions as necessary. But is that really true? Grant writes: If Federal Reserve Chairman Jerome Powell were selling a prescription drug instead of a monetary policy, the Food and Drug Administration would likely want a word with him. “What we’re … [Read more...]
What’s Up with the Economy?
Unemployment is running at over 13%, but much of the economic data is coming in better than economists have been forecasting. And the stock market is down only modestly for the year in the face of what looks like a dire economic situation. What’s driving the disconnect? The personal income statistics from the Bureau of Economic Analysis may shed some light. The chart below shows the level of after-tax personal income for the U.S. In most recessions, after-tax income falls or if there isn’t an outright decline, there is a significant slowing in the rate of growth. But not in … [Read more...]
Life Changes Fast: Need a Boost? Here’s Why I Did
Coronavirus Infects Stock Market: Part LXI You know, as Your Survival Guy, I'm the guy who gets into tough situations only to discover how ill-prepared I am. You know, like when my backyard almost burned down when a tree landed on telephone wires, breaking the pole at the top, sending the distribution transformer, aka "pole pig" (filled with coils and oil ) crashing to the ground right next to one of our prehistoric trees about the size of King Kong that was ready to burn like the torch on the Statue of Liberty. As the fire department descended upon our property, Your Survival Guy quickly … [Read more...]
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