Young Research & Publishing Inc.

Investment Research Since 1978

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Retirement No Time for Whipsaw Portfolio Volatility

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A basic understanding of the arithmetic of portfolio losses can help you become a more comfortable confident investor. Our chart of the arithmetic of portfolio losses shows investors what returns they’ll need to make up for portfolio losses. The horizontal axis shows the assumed portfolio loss incurred. The vertical axis shows the portfolio gain required to break even. … [Read more...]

Lackluster Lending Growth Holds Back Housing

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A bounty of housing data was released this week. Housing starts fell in February (though they were still near an unimpressive three year high), permits increased slightly, existing home sales fell, and home builders’ sentiment remained steady. In sum, despite some positive news, the housing market malaise continues. It can’t be called a comeback yet. At first blush, the cause of the housing malaise seems mystifying. The Pew Research Center says there are more young adults living with their parents than at any time since the 1950s. And our chart of the Case-Shiller Index shows that housing … [Read more...]

Top 10 S&P 500 Stocks: 2012

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Valuable insights on the character of a bull run in stocks can be gained by investigating the companies leading the rally. The table below lists the 10 best performing S&P 500 stocks since the October 3,2011 low. My table shows the market’s biggest winners are among the most speculative—homebuilders, distressed financials, and tech companies. What does that say about the 28% rally in the S&P 500 since the October 3 low? Speculative sentiment is the dominant force in the stock market today. Invest accordingly. … [Read more...]

A Treasured State

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You want to stretch your dollars like silly putty when you’re retired. It’s the name of the game. And you want to be able to have some fun while you’re at it. One place where you can do both is Montana. SmartMoney’s “Retire Here, Not There: Montana” gives you a good starter on the state. Here’s an excerpt on Bozeman (read the whole article here): The first thing Bozeman has going for it: Its proximity to Yellowstone, only 90 miles to the South. (In sparse Montana, 90 miles is considered “down the road.”) But there are many other, more local charms. The town, which sits in the Gallatin … [Read more...]

John A. Allison: Roots of the Financial Crisis

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Since the start of the financial crisis in 2007, much of the air between New York and Washington D.C. has been used up trying to define what happened, how it happened, and who is to blame. One person saw the crisis firsthand as the Chairman and CEO of BB&T, one of the nation’s top financial-holding companies, was John A. Allison. Allison has no doubt who is at fault. In a recent letter he wrote, “The regulators used fair lending laws—designed to eliminate racial discrimination in lending—and the Community Reinvestment Act to force banks to make loans to unqualified borrowers in order to … [Read more...]

The Fed’s Fiat Flood a Dud

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The Fed is flooding world markets with excessive liquidity, but the turnover of money (velocity) has collapsed, indicating a frightening level of concern. Velocity today sits at 1.59, well below the average of 1.79 since 1959. Velocity is calculated by dividing nominal GDP by money supply as measured by M2. With slow GDP growth, and rapid expansion of M2 spurred on by the Federal Reserve’s loose monetary policies, the velocity formula (GDP/M2) has resulted in smaller values. Slow money turnover is a sign of an anemic economy. Today’s levels are the lowest ever recorded. … [Read more...]

A Forgotten Truth about Money

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In a scene from the movie Moneyball, Scott Hatteberg is asked to play first base for the Oakland A’s and responds, “I’ve only ever played catcher.” GM Billy Beane (Brad Pitt) tells him, “It’s not that hard, Scott. Tell him, Wash.” Ron Washington responds, “It’s incredibly hard.” Saving money and investing are incredibly hard. You have to save until it hurts. Then you need to contribute to your IRA. But the more money you save, the more money you have to compound—which can be a lot of fun. So keep saving. The grim reality is that we have a nation of non-savers. The savings rate is … [Read more...]

Bernanke’s Clever Ruse

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It’s official. The Bernanke Fed has gone mad. Less than 24 hours after the biggest stock market sell-off of the year (a scant 1.5% drop) Bernanke & Co. are out floating trial balloons on possible QE3 mechanics to remind investors that a third round of money printing is still on the table. The intention is, as usual, to prop up the stock market. The Fed is trying to setup a no risk proposition for investors. If the economy weakens, the Fed will print more money to prop up stocks. If the economy strengthens, the hope is that the stock market will rally on improving economic data. The … [Read more...]

50% Tax on Dividends

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Determining your income needs for retirement is no easy task. In terms of enjoyment, it is right up there with getting a root canal and filing your taxes. And at least with tax returns, there’s hope of a refund when you’re done. Not so with retirement budgeting. Once you have some figures laid out on paper, you get to present the budget to your spouse. That’s when you realize she actually was paying attention to you—and whatever toys you bought last year. So you work through all that—the credit card bills and bank statements are marked and dog-eared—and it’s time to move forward. But … [Read more...]