Category Archive: Finance
The Last Two Times This Happened, Stocks Crashed
Are stocks disconnected from reality? Probably, according to Tobin’s Q, a rather elegant way to assess equity valuations developed by the late Nobel Prize-winning Yale economist James Tobin. Put simply, Tobin’s Q compares the total value of stock prices with the value of underlying assets such as plants, inventory, and equipment (i.e. replacement costs). Add […]
Why Are Economists’ Predictions So Damn Awful?
Economists have bought into the transitory soft patch thesis of the Fed, hook line and sinker. Please consider Economists’ Forecast: Here We Grow Again. Forecasters in the latest Wall Street Journal survey estimated the U.S. economy contracted at a 0.3% pace in the first quarter because of hits from winter weather and the West Coast port […]
SP 500 And NDX Futures Daily Charts – Early Summer Snoozer
Stocks had an upside bias all day on a slim, lazy trade. Watch the geopoliticals. Have a pleasant evening.
E Greek To Me?
“It’s all Greek to me”, commented subscriber PM about my note yesterday. So for those not familiar with current stock market jargon, here are some definitions of alpha and beta. Technically speaking, they are both ratios used as statistical measurements for calculating returns and risk against a benchmark. They are part of the Capital Asset […]
The Folly Of Discounted Cash Flow Analysis
The value of any asset is the sum of its future cash flows discounted to present value. People make investments to generate more money in the future. The ‘more money’ is future cash flows. No one would buy an asset that will generate $10 in future cash flows for $20. You would lose money. An […]
Warning: Don’t Let Market Hype Cause You To Miss This Total Return Opportunity
Introduction Since the Great Recession of 2008 came to an end, the stock market, as measured by the S&P 500, is almost midway through the 7th year of a strong bull run. This marks today’s bull market as the third longest in US history. Considering how traumatizing the Great Recession and the accompanying stock market […]
Annual cost of car ownership falls to $8,698
Owning a car isn’t cheap. First, there’s the price of the vehicle, which now hovers north of $30,000, on average. Then there’s the cost of maintenance, which can be a real headache in some parts of the country. Tack on the price of insurance, fuel, and the occasional pair of fuzzy dice, and you’ve got […]
WSJ Economists’ Forecasts For 10-Year Yields And The Fed Funds Rate – May 18, 2015
The Fed minutes of its March 17-18 policy meeting released last week was were generally viewed by the popular financial press as showing a split in the FOMC on the timing of a rate hike. The Wall Street Journal has now made available its April survey of economists on key economic indicators. At this point only 19 percent […]
The San Francisco Fed Just Gave A Green Light For A June Rate Hike
Back on March 3, it was none other than a Federal Reserve bank, that of Atlanta, which as we first reported shocked the world or at least those permabullish, consensus-chasing, Wall Street weathermen-cum- economists who assume that a world with $200 trillion in debt will grow at the same CAGR as a world without 4 times […]
