The short answer to the question above is, probably not. Using an indexed based approach to commodity investing is futile. If you're investing in commodities, it's best done using an active approach. Simon Constable explains why in The Wall Street Journal writing: 1. Unlike for stocks, the influence of technology on commodities is deflationary. Consider the massive profits generated by tech companies like Facebook Inc. and Alphabet Inc. New technology has helped power big gains in those stocks. And technology has helped fuel gains in stocks outside the tech sector, as well, by improving … [Read more...]
This Book is a Fixture in My Office
“The more flippant the investing cliché, the more you should question it. Consider ‘the bigger they are, the harder they fall.’ At their lows this week, the technology shares that have until recently been the stock market’s darlings — Facebook, Amazon.com, Netflix, Google’s parent company Alphabet and other giants — had fallen more than 17% since March 13. Over the same period, U.S. stocks overall fell 8%,” writes Jason Zweig in his weekly column The Intelligent Investor. A fixture in my office is the book Security Analysis written in 1934 by Ben Graham and David Dodd. Zweig notes, “As the … [Read more...]
More Good News for the Economy
Missed in all the noise about trade-wars and congressional investigations over the last few days is that the market got an employment report on Friday. The jobs numbers came in light which may say more about today’s low unemployment rate (or statistical noise) than it does about the health of the job market. One of the bright spots in the report was the growth in weekly earnings. Earnings growth is rising at its fastest pace in seven years. The hourly wage numbers aren’t yet as impressive as the Labor Department’s estimate of hours worked is up, but Americans’ paychecks are getting … [Read more...]
Is $80/barrel Oil on the Horizon?
If the leaders of Saudi Arabia have their way, oil could be priced at $80/barrel once again soon. With economic activity picking up in America, and OPEC continuing its policy of production restriction, that target is closer than it's been for some time. Bloomberg's Javier Blas reports: Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco before an initial public offering. In conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid … [Read more...]
Surprise: Americans Still Love SUVs
The WSJ is reporting that Chevy is pulling the plug on the Chevy Sonic and Ford is doing the same with the Fiesta and Taurus. The Sonic and Fiesta compete with the Honda Civic. Both are small compact cars, whose popularity probably peaked when oil prices soared to over $140 per barrel in 2008. But with oil prices now in a modest range, car buyers have decided they actually prefer a roomier SUV/crossover or truck to the cramped compact car. The Taurus isn’t a compact car, but it has apparently fallen out of favor with car buyers. The Taurus has been in near continuous production since 1986, … [Read more...]
April 2018 RAGE Gauge Report
When you’re in the gun business is there a better salesman than former Supreme Court Justice John Paul Stevens? With Stevens talking about repealing the Second Amendment, it’s no surprise background checks, a precursor to gun sales are, are up. The risk trend in my RAGE Gauge analysis is up too across the board, except for one metric, unemployment. Thank you, Mr. Trump. Continue to invest with caution. By the way, did you see the unemployment rate numbers for Elkhart-Goshen, Indiana? It was 16.7% in October 2009 and is around 2.7% today. The RV business is humming. Originally … [Read more...]
Expect Some Pain
Yesterday, President Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese imports on top of the $50 billion already implemented. The extra $100 billion is punishment for the $50 billion in tariffs China announced in response to the initial $50 billion the U.S. put on Chinese goods. While many globalists, including some in Congress are wringing their hands over Trump’s tariffs, strong action against China is long overdue. China hasn’t played fair for decades. This is a single party system we are talking about, an economy that is far from the type of … [Read more...]
Southern Most Naval Station, Key West
U.S. air superiority is a worthy goal, especially when it comes to protecting our shores. With Cuba only 90-miles away it's something I think about when I’m in Key West. And with the recent developments in China, explained here by our in-house weapons specialist Steve Schneider, our ability to defend our shores may not always be as easy as it is today. When four military aircraft crashed recently and another earlier in March—a Navy F-18 near naval station Key West—I’ve questioned how we can keep our "edge" if there’s not enough funding for training. We know the prior administration did not … [Read more...]
Ackman Faces the Flight of his Investors
Famous hedge fund manager Bill Ackman of Pershing Square Capital Management is watching his investors flee his fund. It may take them some time to leave due to rules allowing the withdrawal of only an eighth of their investment each quarter, but even that slow rate of withdrawal is reducing the fund's assets under management. Scott Deveau writes at The Globe and Mail: Bill Ackman’s Pershing Square Capital Management is facing more bad news as many of the institutional investors in its private funds have asked to redeem their money. About two-thirds of the capital that investors could … [Read more...]
Trump: $100 Billion More in China Tariffs?
On Tuesday the Trump administration outlined tariffs on $50 billion worth of Chinese goods imports to the United States. The tariffs focused on drugs, metals, machinery, electronics, trains, ships, optics, medical equipment, and weapons and ammunition. The following day, China outlined its own $50 billion worth of tariffs on American goods, mostly agricultural goods, tobacco products, vehicles, plastics and chemicals, and aircraft. The Trump administration's justification for the original $50 billion in tariffs was China's unfair intellectual property practices. After China retaliated … [Read more...]
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