Excessive Investor Sentiment: XOM, TSLA, & Bitcoin
https://youtu.be/O5iP6-RviJA Investor sentiment can drive prices for assets either higher or lower than their intrinsic value. Exxon is a good example of negative sentiment. Exxon was removed from the Dow Jones Industrial Average in September when the stock was selling at a price below the lows during the 2008-2009 market correction. Since the removal, Exxon […]
The Yield Curve: Important Sign For The Economy
https://youtu.be/Kt5MF2ZwhKM In normal times, the yield curve is upward sloping where short-term interest rates are lower than long-term interest rates. This bodes well for the economy because lenders are willing to lend money longer term because they get paid to do so. When the yield curve is flat or inverted, lenders are unwilling to lend […]
The Underpinnings of Inflation
https://youtu.be/8L-a_jXbzYs Natural Gas is now at its highest price for the past 12 months. Transportation costs to deliver goods are rising rapidly and are significantly higher than they were pre-COVID. These are early signs of upcoming inflation. Is your portfolio ready for inflation?
Big Mac Index: Why We Are Hungry for International Assets
https://youtu.be/jzsJE9iPM38 To tell if a currency is undervalued/overvalued you can measure the cost of the same item in each country. One measure we use to do this is the “Big Mac Index”, which measures how much a McDonald’s Big Mac costs in each country. Back in 2008, when pundits were talking about how the BRICS […]
Growth vs. Value: The Great Divide
https://youtu.be/Zu2Dr7mu4fA We are seeing things that we haven’t seen since 2000 – buying on leverage, no earning stocks selling for crazy multiples of sales, and stocks with solid businesses not participating. The difference between growth stocks and value stocks has become as wide (or wider depending on your measurement) than 2000. Over long periods of […]
Bond Duration: Measuring Interest Rate Risk In Your Portfolio
https://youtu.be/FyodXv4xeV4 Bond duration is a good indicator of how much interest rate risk you have in your bond portfolio. In simple terms, “duration” is the mid-point at which an investor receives half the present value of their original investment back from a bond. Ten-year Treasury Bonds issued in 1980 with a yield of 15% had […]
Expanding Money Supply = Inflation
https://youtu.be/fGcCShfRuVE The Federal Reserve’s easy money policy is unprecedented and is causing inflation. Going back to 1980, the money supply has grown steadily and consistently until recently. Over the past few months, the money supply has exploded higher. We are seeing inflation in commodities like lumber and natural gas. This is a time to have […]
Are Corporate Profits Ready to Fall?
https://youtu.be/VsEg9QATsOY U.S. corporations have doubled their debt levels over the past 10 years to buy back shares. Today, profit margins are also nearing their highest levels going back to 1950. The high level of corporate debt along with higher costs of moving operations back to the United States should cause profit margins to normalize 25%-35% […]
Bull Market? Yes, In Gold!
The best bull markets are those that grow steadily and are not originally recognized by most investors. Since September 30, 2018, gold has performed very well while stocks have languished. The 1970’s gold bull market was squashed when the Federal Reserve raised rates dramatically. With the money supply growing faster now than anytime in the […]
Is Your Portfolio Ready for Inflation?
https://youtu.be/YfAhi5xdDKU Forget the short term daily swings of the stock market, now is a time to look at what will be occurring in years to come to your portfolio. The U.S. government is running deficits and increasing the money supply at a rapid pace due to Covid 19. Going back to 1805, real assets have […]