Month: January 2023

  • “Unprecedented Danger”

    Read the following: “The people of Europe who are defending themselves do not ask us to do their fighting. They ask us for the implements of war, the planes, the tanks, the guns, the freighters which will enable them to fight for their liberty and for our security. Emphatically we must get these weapons to […]

  • Stock returns and real yields: 1970s

    A couple concepts I’ve been playing with. 1: The following chart plots the long term growth of $10,000 invested into the S&P 500 (orange) against periodic market drawdowns (black), both on the same timescale. This is meant to illustrate that while drawdowns are quite painful and dramatic, over the long run they don’t detract from […]

  • The reality behind today’s CPI print

    A quick note on today’s (January 12, 2022) inflation data release… As I’ve written numerous times before, within the next several months we may actually be talking about the risk of deflation. US inflation data released today showed inflation moderating in line with consensus: On the surface these numbers appear positive but relatively benign. However, when […]

  • What drives equity bear markets?

    Word on the street Atlanta Fed President Raphael Bostic to the Atlanta Rotary Club today: On Fed policy: “We are just going to have to hold our resolve.” Asked by the moderator how long he saw rates above 5%, Bostic said: “Three words: a long time.”  Here’s the full speech: The link between earnings and […]

  • Jay Powell’s biggest fear

    Shower thought of the day: Employees can be fired for “time theft” if they conduct personal activity during work hours. However, many employers expect staff to work during personal time without additional compensation. Assigned reading: Cliff Asness: Why Does Private Equity Get to Play Make-Believe With Prices? Jay Powell’s biggest fear is yet another Fed policy mistake It’s […]

  • Beware of this investments marketing trickery

    During bear markets investment marketers resort to the same messaging: think long-term, volatility is normal, invest now or regret it later…etc. Regardless of the state of the market, investment marketers always have reasons investors should buy now. After all, it’s their job to sell product. Today is no different. 2022 was a down year for stocks. […]

  • The Truth about Today’s US Jobs Data

    The jobs data released by US Bureau of Labor Statistics and ADP over the past two days has appeared very strong on the surface. Here are the highlights: There are a couple interesting trends here. The one the market rallied on today is the declining rate of hourly earnings growth, suggesting inflation (a la wage-price spiral) is […]

  • “Nuclear winter” for US housing

    The US housing market is falling apart. Yet, many industry experts failed to see this coming. As recently as October 22, 2021 (source: CNN), real estate executives were quite optimistic about the future: “The impact of…higher rates shouldn’t be a source of major concern for the housing market.” — JPMorgan Chase chief financial officer Jeremy […]

  • Wall St forecasts for 2023

    It’s January 1, 2023 and the investment strategists are rolling out their year-end forecasts for the S&P 500. As you see below, most are forecasting a gain for the year. Considering the market is up about 80% of years, forecasting a gain doesn’t require much intestinal fortitude. Indeed, straying from the crowd to predict a […]