Thought of the Day

“It is impossible to produce superior performance unless you do something different from the majority.” ~John Templeton Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

A Pattern Is Revealed

So exclaimed a headline in Barron’s. It is as if they found the key to the markets. As they outlined: A week does not a year make, but it may offer some clues as to where the market will end 2020. History shows that the S&P 500...

How Do You Stack Up?

In my Chart of the Day we examining how the typical Family Offices allocates their assets. The average household size in this study is $1.2 billion. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

How Did The Big Get Bigger

Sales! Revenue generated in past decade: Apple = $1.9 trillion (Largest Driver of S&P 500 Returns Last Decade) Samsung = $1.8 trillion Amazon = $1.2 trillion (3rd Largest Driver of S&P 500 Returns) IBM = $898 billion Microsoft = $888...

The Big Get Bigger

Want to know what drove returns in the S&P 500 in 2019 and for the last decade? Take a look at my Chart of the Day and you won’t be surprised: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Can They Ever Go Back?

The Bank of England has data on its balance sheet and GDP back to 1700. So how “extraordinary” has central bank activity been the last 10-years Consider the Chart of the Day: All global Central Banks have done something...

Chart of the Day

CNBC looked back at the market reactions of the last 20 Middle East crises and to no surprise the big winner was Oil: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Thought of the Day

As Warren Buffet reminds us: “Forecasts usually tell us more of the forecaster than of the future.” Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Forecasting Follies

I told you there would be more! These are been provided by RP Seawright: There always seems to be a bull market in bearish predictions – predictions that are often spectacularly wrong. Note the following huge errors during the...

When Predicting...

…Predict Often and Don’t Use a Date It is that time of year when we get everyone’s 2020 outlook. I will save you your most precious commodity which is time: ignore most if not all of them. Here is a sample and there...

Low Starting Yield

Congratulations! The Effective Yield on US Corporate BBB-rated bonds have never been lower, as you can see in the Chart of the Day. This does not bode well for future bond returns as historically you earn a similar rate of return as...

Happy New Year 2020

Here is a great list from Vala Afshar to start the new year: Don’t be impressed by: Money Job title Appearances Experience Affiliations Imitation Big words Be impressed by: Kindness Trustworthiness Unselfish generosity Humility...

Say What?

Capitalists Without Capital Are Ruling Capitalism “40% of public stocks quoted in US have negative tangible book value, meaning that their tangible assets aren’t worth enough to repay all their debt. Two decades ago, this...

2019 In One Chart

No caption necessary! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different...

Diminishing Returns...

…When Measured In Points As you can see in the Chart of the Day, a 1,000 point move when the Dow Jones Industrial Average (DJIA) was at 1,000 equates to a 100% return. However, a 1,000 point move when the DJIA starts at 19,000...

College Cost Inflation

This Chart of the Day from dshort.com says it all: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative...

Student Loans vs. Other Investments

Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? It’s about 50.7% of the total Federal assets. This is 10.8 times larger than the 4.7% for the Total...

Question of the Day

What line item below is the largest asset in Uncle Sam’s financial accounts? A) U.S. Official Reserve Assets B) Total Mortgages C) Taxes Receivable D) Student Loans The correct answer, as of the latest quarterly data, is …...

Merry Christmas

To all of my readers who celebrate Christmas, I wish you a wonderful day filled with family and friends! To those who don’t celebrate Christmas, I wish you a day of rest and relaxation! To all of you, the markets will reopen...

Why The Markets Rallied?

Easy! Global Central Banks around the globe continued easing monetary policy: Fed: easing ECB: easing BOE: easing BOJ: easing SNB: easing Denmark: easing Australia: easing Brazil: easing Russia: easing India: easing China: easing...

Say What?

If you are a reader of this blog you know that I am keen on sustainability. I will go so far as to say so is the county of France. According to a recent article from Bloomberg, France is set to impose a $22,240 Pollution Tax on SUVs...

SMH

Royal Dutch Shell writes down up to $2.3 billion on weaker economic outlook on a day the US stock market hit an all-time high, according to a recent article in Reuters. This follows rivals Chevron, BP, Equinor, and Spain’s Repsol...

The Wealth Gap

“By the time Boomers had reached a median age of 35, they collectively owned 21% of the nation’s wealth—versus just 8% for Gen-Xers at age 35 and maybe even less for Millennials when they reach that age.” ~Neil...

Stats of the Day

Once again, the best performing equity market this year was Venezuela with a more modest GAIN of 3,667%. Unfortunately, when converted to US dollars that becomes a LOSS of ~50%, making it the worst performing market, followed by...

Trade Deal Thoughts

While we are still waiting on the finalization of Phase I, I want to look back on the continued nonsense of how many times we were ‘close’ to a deal. The President probably has three more months of gaming the stock market...

Tweet of the Day

Via @EconomPic Annualized returns for the 35 years ending yesterday (12/17/1984 – 12/17/2019): Russell 1000 Growth: 11.34% Russell 1000 Value: 11.21% On 12/17/1984: #1 movie was Beverly Hills Cop #1 single was Out of Touch by...

The Chase For Yield

As you can see in my Chart of the Day, junk bonds are now paying the least extra yield over investment-grade bonds of the same maturity since November 2018. And that was when the junk bond market had no issuance and no liquidity due to...

Growth Over Value

In my Chart of the Day, Dan Rasmussen highlights how Deep-value portfolios of any size in 2019 were about 26% behind the most expensive decile of the market, with the smaller half of deep value performing even worse. He also end his...

Say What?

Scan this list and if you hold any of these strategies please contact your advisor ASAP! You can buy an S&P 500 ETF with an expense ratio of 0.04% and do it for no commissions! Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Reversion To The Mean - II - Explained

After posting this chart yesterday, I found this Stat of the Day to share. The S&P 500 is now very tail heavy, as the 10 largest members represent a quarter of the index. That level of concentration in momentum stocks is similar to the...

Reversion To The Mean - II

As you can see in my Chart of the Day, we are seeing a record divergence between the price movement in the S&P 500 and corporate profits. Over a long period of time you can see that earning drive stock market returns. However, we are...

Reversion To The Mean

This gap will close eventually. Either by investors buying CCC bonds and catching-up or BB bonds selling off and catching-down. What is interesting to note is that this flare-up started around the same time as the issues in the Repo...

Record Duration

US Investment Grade Corporate bond market duration has never been longer – ever. With interest rates near all-time lows it makes sense that corporations have accessed the debt market with low coupons and longer maturities. Just...

Question of the Day

Did Millenials really buy Berkshire Hathaway stock or were they gifted shares? The Chart of the Day outlines the Top 10 equity holdings as percentage of assets held in equities across all generations, according to a Schwab report: Stay...

Afraid of Heights?

Based off of my Fact of the Day regarding this being the first decade in modern history without a “recession,” it is worth mentioning that jobs data is a late-cycle data point. As you can see in the Chart of the Day,...

Stat of the Day

In a recent Wall Street Journal article, they highlighted the growing share of companies in the S&P 500 that are experiencing a slowdown in earning: A third of S&P 500 companies have posted a yoy decline in earnings in 2019. The last...

Fact of the Day

This will be the first decade in modern economic history (since 1850) that the US won’t experience a single recession. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Where Is The Money Going?

According to a recent article in The Wall Street Journal, “Investors have pulled $135.5 billion from U.S. stock-focused mutual funds and exchange-traded funds so far this year, the biggest withdrawals on record.” Stay Tuned...

What Inflation - II?

College Education: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different...

What Inflation?

US medical insurance premiums are up sharply – this will be a headwind for consumption next year: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

Cartoon of the Day

Around and around we go… Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results....

It's Not QE?

I will let these charts speak for themselves. The bottom of the V in the chart above coincides with the spike in the chart below. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Upward Trend Resumes

When interest rates are near all-time lows and you need cash to buyback stock just leverage your balance sheet. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Thoughts of the Day

“I had a considerable passion to get rich. Not because I wanted Ferraris — I wanted the independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people. I don’t know where...

Costly Venture

Since we are less than a year from the 2020 election I thought this Chart of the Day was relevant especially with self-made billionaire Mike Bloomberg entering the fray on the Democratic side. Stay Tuned, Disciplined & Patient! {TJM}...

Happy Thanksgiving

I wanted to wish all of you a wonderful Thanksgiving! One of my other passions outside of my family and investing is lacrosse/personal development. This is a great day to breakdown the meaning of Thanksgiving into two parts: Thanks and...

Real Estate Sub-Sector Returns

In my Chart of the Day, I wanted to highlight the divergences even within a specific sector over time. Below are total returns of publicly traded real estate sectors over the past 10 years: Stay Tuned, Disciplined & Patient! {TJM} The...

Historical Interest Rate Visual

With the US 10-Year Treasury Bond yielding 1.79% (which is attractive compared to other sovereign bonds), I thought this Chart of the Day from Visual Capitalist was interesting. As you can see it really has been a ‘Race To The...

Historical Interest Rate Visual

With the US 10-Year Treasury Bond yielding 1.79% (which is attractive compared to other sovereign bonds), I thought this Chart of the Day from Visual Capitalist was interesting. As you can see it really has been a ‘Race To The...

Family Office Allocations

Interesting note from UBS Wealth Management: Family offices are planning to increase their exposure to private equity — the second biggest allocation in their portfolios — amid doubts that hedge funds can protect their...

More High Yield Tensions

32.97%

Just FIVE stocks have accounted for nearly 33% of all of the gains in the S&P 500 over the last two months: Apple Microsoft Facebook United Health Alphabet Chart courtesy of Evercore. Stay Tuned, Disciplined & Patient! {TJM} The...

Sign Me Up

According to a recent piece in The New York Times: Companies that make up the S&P 500 index had an average effective tax rate of 18.1% in 2018, down from 25.9% in 2016. As a result, they have spent nearly three times as much on...

Watch This Space

With the yield curve flattening again and high yield spreads widening again, keep an eye on the overall health of the bond market and its liquidity going into 2020. Specifically, in today’s Chart of The Day, we are seeing...

Looong Dated Bonds

For those thinking about the very long-term, Austria has bonds maturing in September, 2117. As interest rates around the world fell, sovereign issues took advantage of investor thirst for positive yield and started offering some...

Facts of the Day

The Federal Reserve’s balance sheet has increased $300 billion in less than two months. If the “repo funding” continues at this pace, the January 2015 high will be taken out by late February of 2019. It will be $800...

Key Drivers of Stock Returns

Just two stocks, Microsoft (MSFT) and Apple (AAPL), have now a combined market cap larger than the Russell 2000 and the entire German stock market. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Oops

On the day the Dow Jones Industrial Average (DJIA) breaches 28,000 (although NO institutional managers use this index as it is price weighted), the Federal Reserve Bank of Atlanta updated their NowCast for 4th Quarter 2019 GDP (meaning...

Headline Comparisons

Here is a truthful headline and quote from a story in the FT: US and China struggle to finalise ‘phase one’ trade deal. “One person with knowledge of the discussions said that China was ‘absolutely’...

Watch Reversion To The Mean

Sentiment in the global stock markets is a bit frothy. No this does not mean we are about to enter into some sort of black hole sell-off e.g. this time last year. The CNN Fear & Greed Index is at 90% which historically is not a...

Say What?

According to a new study by Common Sense, on average, U.S. teens in 2019 spend more than seven hours a day in front of screens—not including schoolwork. The latest “media census” finds that screen time among teens and...

Veteran Day - II

I read the below quote last night and was reminded of this incredible story. Douglas A. Zembiec, who was often known as the “Lion of Fallujah” was an officer in the United States Marine Corps and a member of the CIA’s...

Veterans Day

“A veteran is someone who, at one point in their life wrote a blank check made payable to ‘The United States of America,’ for an amount up to and including their life.” ~Unknown We are the land of the free,...

What Is He Waiting For?

Warren Buffett’s Berkshire Hathaway is sitting on an every growing mound of cash and short-term investments – in BILLIONS: 2018: $130B 2018: $116B 2017: $92B 2016: $53B 2015: $64B 2014: $49B 2013: $31B 2012: $41B 2011: $37B...

Starting Earlier Every Year

Yes my personal consumption of Peppermint Mocha is now a year-round undertaking – although you can only get the lower calorie version during the holiday season. In the Chart of the Day, you can see consumers are hunting for DEALS...

Experiment of the Day

Microsoft found that implementing a four-day workweek led to a 40% boost in productivity, the company announced as part of the results of its “Work-Life Choice Challenge.” The summer project examined work-life balance and...

CEO - Chief Exit Offiers

As a follow-up to my note on Lapses in Judgement it has been a record your for CEO departures. McDonald’s, Under Armour, Nike, and WeWork all lost their leaders last month. 2008 previously set the record for most CEO departures,...

Lapses In Judgement

On the heels of the McDonald’s news this past week where CEO Steve Easterbrook was forced to resign due to a relationship with an employee, Jessica DiNapoli of Reuters dug deeper into this issue. In 2018, fully 39 percent of CEOs...

Thoughts of the Day

David Solomon, CEO of Goldman Sachs after being stung by losses in Uber and WeWork, he told Bloomberg that profits matter more in this bifurcated market we are seeing in both private equity, venture capital and bond markets. After...

One Year From Today

We will elect a President. Here is the Calendar of Events to follow along at home. Here are the latest polls – three in fact – on the Democratic front runners. Here is an animated Candidate Field Guide. Stay Tuned,...

Sustainability Stories

Who emits the most CO2 today? Appended below are the highlights of a recent report by Our World In Data. China is, by a significant margin, Asia’s and the world’s largest emitter: it emits nearly 10 billion tonnes each year...

Don't Call It QE

As a follow-up to my entry entitled Is It QE or Not I wanted to provide a better visual on the reversal of Fed policy of Quantitative Tightening (QT). As you can see there has been $258 billion of Fed money printing in just two months!...

Reversion To The Mean

In case you have not held any deep value stocks, the Chart of the Day is here to highlight the fact that the last decade of Value underperformance vs. Growth is the second worst since 1937. Stay Tuned, Disciplined & Patient! {TJM} The...

Stats of the Day

Happy Halloween The average trick-or-treater hauls in between 3,500 and 7,000 calories worth of candy on Halloween night. Tt takes 44 hours of walking to burn that off! Earning Quality “NIPA profits have been flat for the last...

Who Is Next?

The Economist Chart of the Day appended below shows how much wealth has been made in technology over the last decade. You’re not a genius for predicting that (eventually) this trend corrects. What sector is next to see this kind...

Where Will We End

As we are close to wrapping up this decade, some perspective on stock returns. Average Real Returns (After Inflation) per Decade were 6.6% per year. Worst was -3.4% (2000s) Best was 16.7% (1950s) We’re currently ending the top 5...

Cheap Money

Some things never change. The below is from The Economist – 1858 (Hat Tip Jamie Catherwood): “It is equally beyond doubt that every speculative mania which has run its course of folly and disaster has derived its original...

Is It QE Or Not?

Semantics. But either way with the issues within the plumbing of the repo and money markets of last month, they ARE EXPANDING their balance sheet. Call it what you will. By the looks of the above Chart of the Day, an increase in the...

Say What?

Is this the Upside Down World? World’s weakest PMI: Germany World’s strongest PMI: Greece This is the exact opposite of 4 years ago! I still don’t think Germany is going to need a bailout from Greece though! Stay...

FBF

With the recent announcement of free stock, ETF and most options trades by financial services firms, I thought I would post a Flash Back Friday – if that is even such a thing. The first Chart of the Day is just a friendly...

Public Over Private

The tables have turned and my take on WeWork exemplifies the excess capital swimming in the private equity / venture capital pool. While this is just an estimate of private market multiples and is not a ‘signal’ it is more...

Let's Play A Game

How many private planes does it take to run a $40 billion industrial company whose stock price is at the same level it was at the end of 2013? If you guessed EIGHT you would be correct! Oh and don’t forget the one helicopter. The...

Thoughts of the Day

From Howard Marks in this latest Memo – Mysterious: Negative interest rates are nothing short of a mystery; they’re likely to throw off whatever we knew about the financial world and how things worked in the past. With more...

Sustainability Stories

As it turns out, the average American wastes 900 cups of water every week from leaving the water running while they brush their teeth — a guilty action that 42% of people admit to doing, according to a survey conducted by Red...

How Much Money Will Make You Happy?

A Harvard survey of 4,000 millionaires found that the millionaires worth $1 million were approximately as happy as the millionaires worth $8 million. This finding — that at the end of the day, $7 million is worth basically $0...

What Is The 1%

Based on recent IRS data, anyone making more than $515,371 in annual adjusted gross income is in the Top 1% of all earners in the US. This is a rise of 7.2% from the year prior, even after adjusting for inflation. Since 2011, when the...

Actively Passive

The 20 largest ETFs now have $1.556 trillion in assets. While the indexes they track are passive, their users are anything but. Over the previous twelve months, the total trading volume in these products was a whopping $11.529 trillion...

The Stealth War

How China Took Over While America’s Elite Slept is a new book by Robert Spalding, Brigadier General. I have highlighted a few of the salient, concerning points regarding our relationship with China. “Having served as Chief...

Don't Call It QE

The Fed announced last week that it will begin to buy Treasury bills today an initial pace of $60 billion a month and continue those purchases into the second quarter of 2020, marking a pivot for the central bank. “In light of...

Ouch

As you can see in my Chart of the Day, the average credit card interest rate is 17.39%. This is the highest level in decades. I have mentioned this trend before but at the very least maybe these card holders should look to refinance or...

Thought & Question of the Day

The “Trade Deal” summed up in one sentence from 1688: “The expectation of an event creates a much deeper impressionon the exchange than the event itself.” – Jose de la Vega, 1688 So, how will the markets...

The Trade Deal

Let’s be honest and not political. The “Best Ever Trade Deal” isn’t awesome. The trade Bean Deal “Phase One” is nothing. China buys a ton of soybeans (as 1/3 of their herd is killed by Swine Flu)...

Ivy League Performance Update

This week’s Bloomberg column from Barry Ritholtz looks at the lackluster collective performance of Ivy League university endowments: Harvard: 6.5%, Yale 5.7%; University of Pennsylvania 6.5%; Dartmouth 7.5%; Brown 12.4% (Smallest...

Say What?

In a recent Bloomberg article, Warren Buffett was offering to inject $5 billion into Bank of America so he did what any billionaire would do: call the Help Line. The bathtub epiphany that led Warren Buffett to pump $5 billion into Bank...

Stat of the Day

China’s debt levels are unsustainable. China’s private nonfinancial sector credit is roughly 2x its nominal GDP. That ratio compares to 1.6x for the US and Japan and 1.5x for the Eurozone. Moreover, four-fifths of all...

Cracks In Private Equity

In looking at the below Chart of the Day, you have to wonder if this image via @SoberLook serves as a warning to the Private Equity managers and General Partners (GP.’s) who are sitting atop a record $2.5 trillion in dry powder?...

Is The Fed Out To Lunch

We will see in a few weeks. The Fed Funds Futures (FFF) implied probability on a rate cut at the end of October is now 84.2%. Only a few days ago the probability was sub-40%. There is a 0% probability of a 50 basis point rate cut and...

Get It While It Lasts

Money for nothing. Spain sold €2.18bn of 10-year bonds at record low yield of 0.115% vs 0.21% at the last auction in September. Although, with a debt ratio of almost 100%, the country is one of the most heavily indebted nations in...

The jobs Report

Headline was a +136,000 growth in payrolls with a positive revision to August and July. The five-month stretch of downward revisions has been arrested. We have a fresh low in the unemployment rate and the underemployment rate fell as...

Classic Late Cycle

For the past year, we have seen a steady decline in US consumers’ interest in buying large household goods, i.e. washers, dryers, computers, TVs, furniture etc. This sentiment indicator has historically been a very good leading...

ISM Manufacturing PMI Update

US Manufacturing (PMI) below 50 for 2 months. US PMI data this week gave the market a wake-up call to what I have been saying for months: the economy in the US is slowing, This is the 2nd consecutive monthly reading below 50,...

Unicorns Don't Exist

Well they may in the world of private equity. There are often referred to as companies that are worth over $1 billion and still private enterprises. Eventually they go public, unless your are WeWork. However, the public markets have...

Stat of the Day

According to The Kauffman Foundation: From 1986-1999, 29 top venture capital (VC) funds invested 21 billion and returned $85 billion. Over the same time period, the rest of the VC universe invested $160 billion and returned a scant $85...

A Tale As Old As Time

We are seeing this in the GM worker strike. As companies make more in profits, labor wants their share of the pie. This dynamic has a ripple effect we see in the later part of the cycle. As explained by Christian Drake: “If...

Thought of the Day

“You can, of course, pay too much for even the best of businesses…. Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding...

Rate Cuts Are No Panacea

This is your daily reminder that as the 4th quarter gets underway economic cycles still matter. More than tweets, “trade deals” and any other headlines CNBC throws at you. As you can see in my Chart of the Day, the last two...

Even Returns

In my Chart of the Day, you can see that after several years of the stock market being driven by only a handful of companies, this divergence has reverted back to the mean. While this does not factor in the last two quarters, it gives...

Right on Cue

Jefferies’ merchant banking unit wrote down the value of its investment in We Co. by $146 million. As I posted my thoughts on WeWork IWork, the largest monetary losers in this will not be the buyers of the IPO (aka the retail...

More Like IWork...

…Instead of WeWork On the heels of his resignation termination, WeWork founder Adam Neumann today stated, “Too much focused has been placed on me.” Oh really…you only mentioned yourself 169 times in the S-1....

Data Points

Whether you have spent time with me talking about my investment process or when I was a lacrosse coach, you would know I am a believer in data points and process. I have been sounding the drumbeat on our view of an earnings slowdown....

Coming To A Screen Near You?

In all honesty, I have no idea. However, we do use history as a guide. As you can see in the Chart of the Day, in pre-election years, the markets tend (but not always) have a move to the downside. As I have been stating, I tend to...

Thought of the Day

It is amazing what one week of rising interest rates does! This Chart of the Day comes from LPL Research chief strategist John Lynch and it looks at the phenomenon of negative-yielding debt. Lynch notes that “Unfortunately, the...

Thought of the Day

“Things are never clear until it’s too late.” ~Peter Lynch This is why it is imperative to have an investment process. You have to make decisions with incomplete information. However, you want to be able to tilt the...

About Those FedEx Numbers

In the Chart of the Day, I wanted to highlight why we should pay attention to the financial health of the largest freight company in the world. Concurrent with my outlook for a year-over-year slowdown in US GDP, the chart seconds this...

Interesting Federal Reserve Observation

Unless I fell asleep for a few minutes during Chairman Powell’s press conference yesterday, I don’t recall him being asked about the Fed’s Dual Mandate of achieving full employment and containing inflation. Although,...

Add Fuel To The Fed Fire

Chart of the Day, Courtesy of the New York Fed The index for future business climate declined 11 points to -18.6, its lowest level since 2009, indicating that firms expected the business climate to worsen in the months ahead. Add this...

Quote of the Day

“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” FedEx Chief Executive Frederick W. Smith said in a statement. If...

The Truth

“For China to maintain growth of 6% or more is very difficult against the current backdrop of a complicated international situation and a relatively high base.” ~China Premier Li Keqiang 8/15/19 “If you exclude any...

Guess The Return

At first glance this chart looks very bullish. From the 1929 peak to the 2019 peak—90 years—inflation-adjusted capital gains (no dividends, taxes, or fees) the S&P gained 1.9% annualized. This shows how important income is...

Home Country Bias

Morningstar has the Chart of the Day as it outlined Domestic Revenues for each country. The Chinese index leads the way with 87.26% of revenues coming from Chinese companies. Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Fact of the Day

Passive US equity funds have finally surpassed active US equity funds in assets under management. By the end of August, passive US funds had total net assets of $4.27 trillion, compared with $4.25 trillion in active US equity funds,...

Watch Corporate Earnings

In my Charts of the Day, I focus on the RoC in earnings. That is the Rate of Change on a year-over-year basis. In the first chart, even though the absolute earnings levels will be positive, they are set to slow by 3.6% on a...

Patriot Day

“September 11 impressed upon us that life is a precious gift… And I think we all have a duty to devote at least a small portion of our daily lives to ensuring that neither America nor the world ever forgets September 11...

Yield Curve & Recessions

First, let me start by saying my capital allocation process and signals do not focus on recessions but Rate of Change. Second, you don’t need a recession to lose 20% of your money. Just look back to the 4th quarter of 2018 when...

Say What?

Banks made $6 BILLION from overdraft fees last year. In other words, banks made $6 BILLION from people who have little financial flexibility to begin with. Three of the largest US banks tallied the following last year: $1.1 Billion in...

Delinquency Update

No surprise borrowers are paying down their mortgages and Home Equity Lines of Credit with the drop in interest rates. In my Chart of the Day, we are seeing a steady borrower, but are experiencing some fissures in the auto loan market...

Smart or Greedy

In my Chart of the Day, I am pondering if banks are getting smarter or staying greedy? Banks are in the business of borrowing short and lending long. Meaning they borrow from the government at short-term, lower rates and then lend to...

Say What?

In my Chart of the Day, JP Morgan earlier this week extolled that ‘Now is the time to buy stocks.’ Huh? I thought the last 10 years were pretty good! Also, what stocks to buy? What sectors? What countries? What size? What...

Climb The Mountain

Not sure how long this will last, but the iron clad reversion-to-the mean rule in investing says it won’t be forever. This Chart of the Day highlights the relative outperformance of US stocks vs. European stocks. This is an...

Sustainability Stories

It looks like China is already winning one war: recycling batteries for electric cars. “Deployment of about 140 million electric vehicles by 2030 will require: 3 million tons more copper a year 1.3 millions tons more nickel 263...

The Trend Is Not Your Friend

In the Chart of the Day, you can see Global PMI’s have experienced one of the longest slowing streaks in decades. Beware of FOMO! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Unique Chart of the Day

In my Chart of the Day, you can see that an hour of work buys more alcohol today than any time in history. Is that due to the amount of spiked seltzers on the market or the collective stress levels of US workers? Stay Tuned,...

Where Did My Money Go?

In my Chart of the Day, you can find out! This is a snapshot of what the average American household made and where it was spent. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Yikes

Even as Secretary Mnuchin stated this week the Administration is ‘seriously considering issuing 50- and 100-year bonds,’ below I present the Chart of the Day of the Argentina 100-Year bond. Issued in 2017, the $2.5 billion...

China Clamps Down

Specifically on capital flight out of the Yuan after the currency weakens to 11 year lows. Here is an example from the Nikkei Asian Review article: “If a parent wishes to pay school expenses for a student studying abroad, an...

Alligator Jaws

At some point in time the jaws close! This could have been titled Reversion to the Mean. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that...

Thought of the Day

Dr. Michael Pilsbury’s perspective on Chinese strategy is an important one to consider when factoring in the trade deal saga: “China’s Marathon strategy depends heavily on goodwill from other countries, especially the...

Thought of the Day

“Good investment advice is repetitive and boring. There is nothing exciting about it.” ~D. Muthukrishnan So tune out CNBC and read! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R =...

Thought of the Day

The silly season in software IPO’s will only get worse from here. According to Ami Joseph, there are ~300 companies in the private realm worth more than $1 billion, aka unicorns. It would be hard to ignore taking money from...

Perspective: Long-Term Returns

With volatility increasing and set to continue for the foreseable future, I thought this updated Chart of the Day would be beneficial. As you can see on any given day the S&P 500 has a 53% chance of going up. However, when you have a...

Chart of the Day

As mentioned previously and with the move to historical lows recently in US Treasury bonds, your mortgage broker may see an uptick in business. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R =...

Nothing To See Here

The Bureau of Labor Statistics (BLS) published the preliminary annual benchmark revision for the national employment data this morning. The estimate revisions occur on an annual basis and cover the April to March period (so, April...

No Really

Denmark has taken negative interest to a new level. Denmark’s Jyske Bank unveiled a negative mortgage rate of -0.5%. They are paying borrowers to take out a mortgage. This is on the heels of German’s Hyp Bank selling 1...

Say What?

When you buy shares of the S&P 500 Exchange Traded Fund SPY you are buying an investment with an end date. Huh? SPY is the largest ETF in the world, with $240.1 billion worth of assets in it as of the end of 2018. It was the first U.S....

Search For Safe Havens

In my Chart of the Day, I outline how the markets responded last week while in the throes of the biggest flight to safety in decades. Treasuries, gold and the Japanese yen are clocking ‘the largest number of outsized...

Search For (Positive) Yield...

…Means you must come to America! As you can see in my Chart of the Day, the US bond market represents ~94% of the yield you can capture in all of global bonds. Between ~$17 trillion in negative yielding bonds and bonds that...

Inverted Yield Curve - III

As you can see in the Chart of the Day, as the yield curve flattens, banks historically have a lower willingness to lend to consumers. This would be carried out via higher credit scores necessary to borrow, higher rates levied for...

Inverted Yield Curve - II

In this Chart of the Day courtesy of Macrobond, we see that over 53% of all yield curves globally are inverted. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Inverted Yield Curve

When you hear me use the term ‘Macro Tourists’ my below Chart of the Day is why. Investors have a tendency to lock-on to a new phrase/term when the market volatility increases, like it has this week. In the above chart, the...

Sustainability Series

According to a new study published in Nature Energy, there are 344 cities in China with solar energy generation that is cheaper than the energy coming from the overall grid. There are another 75 cities where the price of solar can even...

Buy The Unloved

Morningstar Research recently published a report on how a contrarian strategy of buying unloved, out-of-favor sectors based on fund outflows performed. The looked into the 3 Categories with the Largest Outflows in the Prior Year Since...

The Negative Bond Yield Matrix

Appended below is a great visual highlighting all of the negative sovereign bond yields across the globe: 50-Years: Switzerland 30-Years: Germany, Netherlands 20-Years: Denmark 15-Years: Japan, Austria, Finland, Sweden, France, Belgium...

Say What?

$70,000 per Minute… $4 million per Hour… $100 million per Day… That’s how much money the Walmart-owning Walton family has made in the year since Bloomberg’s previous list of the world’s richest...

A Benefit of Lower Rates

Yes it is true that lower rates and a flat yield curve hurt savers; however, one main advantage of lower rates is on mortgages. As I have mentioned lending standards tend to increase when the yield curve flattens, but if you are in...

Financial Planning Process

I wanted to take a moment to switch gears with this post. In my Chart of the Day, I wanted to highlight a flow chart from Michael Kitces on the Financial Planning Process. It is very important to start with a realistic budget and begin...

Tweet of the Day

Via @ValaAfshar 52% of Fortune 500 companies have disappeared since year 2000. In the Fourth Industrial Revolution, every company is a technology company. Every company is a data company. Every company must operate like software...

Market Musings

Why do investors make irrational decisions? Daniel Kahneman is spot on with his assessment: “Because the long term is not where life is lived.” Especially in this era of instant gratification, having patience is paramount...

Thought of the Day

“As the velocity of information consumption increases, the ability to separate the significant from the meaningless becomes more important.” ~Shane Parrish It is imperative you get your information sources correct. You...

Oops...

One year ago today, CNBC reported on how Jamie Dimon, the CEO of JP Morgan (JPM), thought interest rates should be higher. Much higher. He stated, “I think rates should be at 4% today.” At that time they were at ~3%. He...

Canary?

The total market capitalization of the 26 largest banks in Europe is below that of Facebook’s (FB). Below appended is my Chart of the Day outlining the performance of these banks over the past five years. Potential day of...

Fact of the Day

Actually a reminder, now that banks are starting to report earnings for the 3rd quarter. In 2008, Bank of America got $45 billion in TARP funds, yet it paid out $3.3 BILLION in BONUSES, including 28 bonuses over $3 million. Merrill...

Tweet of the Day

From: @behaviorgap The concept…the very idea…of retirement is dumb. Waiting until some arbitrary age to enjoy life PLUS stopping all meaningful work all at once…DUMB. I will never retire. I will just do more of...

Why The Markets...

…Are Not Always Efficient Because HUMANS and their EMOTIONS are involved! “The market is fond of making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.” – Benjamin Graham...

Welcome to August

The month of August is the worst performing month for the S&P 500 since 1994. The stock index has suffered an average loss of 0.6% (total return) during August over the last 25 years (1994-2018). The best performing month since 1994...

Say What?

In my Chart of the Day, it looks like Americans believe in large numbers that their retirements are going to be just fine: 15-year high 57% of non-retirees anticipate comfortable retirement 57% of retirees rely on Social Security as...

Equifax Data Breach

What do you need to do? 147 million American's data was stolen from Equifax in 2017. The data maintained by a credit bureau is immense and put all people affected by this breach at serious risk of Identity Theft. Identity Theft is when...

The Best Investors Are...

…Known To: Read nonstop about everything Seek to understand opposing views Refrain from following the crowd Be comfortable appearing wrong for long periods of time Have the courage to act when others are scared These are Simple...

SMH

On the Chart of the Day, we see that Greece 10-Year government bond yields now MATCH US 10-Year Government bond yields. What debt would you be comfortable investing in over the next 10 years? Stay Tuned, Disciplined & Patient! {TJM}...

Global Yields

For 10-Year Sovereign Bonds as of July 25th: USA = 2.05% Great Britain = 0.681% Germany = -0.374% Swiss = -0.67% Japan = -0.147% Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Say What?

Beyond Meat’s market cap just passed Conagra. Conagra: Founded in 1919 Duncan Hines, Hunts, Slim Jim, Orville Rendenbacher, Healthy Choice, PAM, Birds Eye, Earth Balance, etc. 18,000 Employees $9.5 billion Revenue Beyond Meat:...

Thought of the Day

With US stock markets overbought and global economic data languishing, this mantra will be critical to keep in mind over the next few months: Risk is not volatility. Risk is permanent loss of capital. Stay Tuned, Disciplined & Patient!...

SMH

In my Chart of the Day, I am scratching my head: If you made $249,000 last year, your refund went down. But if you made $499,000, your refund went up. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S...

Market Morsels

The Chinese economy grew by 6.2% in the 2nd quarter 2019, i.e., year-over-year growth rate, the lowest growth rate reported by China in records maintained since March 1992. The last time the United States reported a growth rate of at...

Market Morsels

The stock market has produced a total return of +14.7% per year over the last 10 years through 6/30/19. The worst quarter over the last decade was a drop of 13.9% in the 3rd quarter of 2011. The S&P 500 was used as the stock...

Thought of the Day

“A wealth of information creates a poverty of attention.” ~Herbert Simon Just because you have an endless reservoir of information in your pocket doesn’t mean it makes you smarter. Endlessly scrolling and only...

Thoughts of the Day

Peter L. Bernstein, the famous investor, on how to make better decisions when investing and in life: “You have to keep reminding yourself: We don’t know what’s going to happen with anything, ever, over any period. And...

Tweet of the Day

From @RudyHavenstein Attention young people: Today I made my own avocado toast, saving $5. If I did this every day for 2,920,548 years, I’d have as much money as Citigroup’s 2008 bonus pool. Stay Tuned, Disciplined &...

Head Scratcher

In my Thought of the Day, the veteran CEO of CSX can almost be heard scratching his head on the earnings call as the stock slides 12% in two days: “The present economic backdrop is one of the most puzzling I have experienced in...

Probabilities of Fed Rate Cut

As of this writing the options market is pricing in a 100% probability of a some level of rate cut in two weeks: 65% chance of 25 basis point cut 35% chance of 50 basis point cut Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Trump Tweet-O-Meter

I couldn’t resist and this is not political. SentimentTrader sent this chart out earlier this morning and I couldn’t resist in posting it. There seems to be a high correlation to President Trumps tweets about...

Recession Risk Rising

Based on the Chart of the Day, the risk of a recession has risen considerably according to the New York Federal Reserve Bank Recession Probability Indicator. This uses the yield curve slope as a primary input. Several parts of the...

Face The Facts

I recently read a disheartening but accurate assessment of how the combination of continued historically low interest rates plus future obligations creates a dangerous alchemy of reaching for yield. The paper is authored by Danielle...

Advice of the Day

I come across so much good content and sometimes the author puts it all together making my research that much easier. In this case Daniel Crosby has cobble together his Big List of Money Wisdom: The Joneses aren’t as rich or...

Progress

Corporate Board Elections Getting a Little Less Cozy This year, 478 nominees for U.S. board seats failed to win support from a majority of voted shares, a 39% jump from 2015. One of the issues at work here is investors are finally...

Tweet of the Day

@CheapInvesting Behavior > StrategyProcess > OutcomeDiscipline > KnowledgePrice > StorySimple > ComplexChecklists > MemoryAvoid Permanent Loss of Capital > Minimize volatility Stay Tuned, Disciplined & Patient!...

Why Stock Buybacks Are So Important

In the upcoming non-stop political season, we could see a showdown over stock buybacks by corporations, especially if Elizabeth Warren ascends to the top of the Democratic field. I believe some sort of action will be taken but doubt a...

Chart of the Day

As you can see in the chart below, most trading happens in the last and first half an hour of each trading day. Also, ~85% of each day’s activity has to do with indexes, quants and rules-based options strategies. Stay Tuned,...

Stat of the Day

Since 2009, the level of global nonfinancial companies rated as speculative, or junk, has surged by 58%, to the highest ever. Fully 40% are rated B1 or lower, the point that Moody’s considers “highly speculative,” as...

Say What?

In my Chart of the Day, we see that 96% of Swiss Government bonds have negative yields. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that...

Say What?

In my Chart of the Day, Charlie Bilello provide you a startling representation of what it looks like to invest in a 30-Year bond issued by the Swiss government with a yield of -0.05%. Yes for 30 years you lose -0.05% annually. Stay...

Thought of the Day

“The laws of probability, so true in general, so fallacious in particular.” ~Edward Gibbon Keep this succinct quote in mind when watch financial news media. If all we needed to do is look at history, I would not be typing...

The View From Fort McHenry

Happy 4th of July! Here is my annual post on the birth of our national anthem. Being a native of Baltimore I thought I would take this July 4th as an opportunity to again provide you with the background on our national anthem: The year...

Investors Want Municipal Bonds...

…But Issuance Is Rare Investors have poured a net $47 billion into municipal bond funds during the first six months of 2019. This a record for the first two quarters, according to Lipper data from Refinitiv. But this surge in...

Trade Truce?

Who is keeping track? Is it 90%? or 85%? In December of 2018, it was ‘amazing and productive’ with 90% complete. In June of 2019, it was ‘excellent, right back on track’ with 90% complete. And you mean to tell...

Thought of the Day

Financial Literacy vs. Investment Suitability: Which Matters More? “In Australia they have a robust, mandatory savings program. Guess which country, after Switzerland, has the highest per capita household wealth?” You got...

Chart of the Day

Most investors in the US state the main reason for placing ~80% of their stock exposure in the US is because US companies have a high % of foreign revenue exposure. Not So Fast My Friends: Out of 23 developed countries guess where the...

Sustainability Stories

A new paper found that realistically electric scooter fleets are hardly carbon-free, given the cost of manufacturing all those scooters with mediocre durability, as well as the cost of paying people to drive around to collect them and...

Thought of the Day

“Equities and Bonds roles have been reversed. People buy stocks for income (since bond yields are so low and going lower as the economy and inflation slows globally) and bonds for capital appreciation (why else would you buy...

Advice: Peter Lynch

In 1997, Peter Lynch wrote a great article entitled, Use Your Edge. I’ve posted an excerpt of it below.: So, what advice would I give to someone with $1 million to invest? The same I’d give to any investor: Find your edge...

Stat of the Day

The world’s largest economies by 2030: China India United States Japan Indonesia Russia Germany Brazil Mexico United Kingdom Just keep this in mind when building a globally diversified stock portfolio. Stay Tuned, Disciplined &...

Sustainability Stories

I wanted to start a new series on the ESG front. As a refresher ESG stands for: Environmental, Sustainable and Governance. I have often mentioned initiatives/projects that I have found interesting or may be investable, but I want to...

Chart & Question of the Day

Here is one of the biggest drawbacks to Alternative strategies. As you can see below after a 10 year bull market nothing will compare to pure stock market exposure. My Question(s) of the Day is, where to now and how do you want your...

What Are You Trying To Say

In my Chart of the Day and with some stock markets near all-time highs, I just wanted to present a bit of history – post FOMC meetings. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

A Red AND Blue Issue

Note: This blog is not political, just stating facts according to the US Treasury Department. The national debt increased +86% during George W. Bush’s 8 years as president, reaching $10.63 trillion as of 1/20/09. The national...

Chart of the Day

There is currently ~$13 TRILLION in global bonds that trade at a negative yield. This is really not that healthy and a sign of deflation and lower interest rates. Courtesy of Hedgeye Stay Tuned, Disciplined & Patient! {TJM} The...

When Predicting...

…Predict Often …Don’t Provide a Timeline …Or Don’t In the 12/31/17 issue of USA Today, writer Adam Shell wrote of “18 stocks to Consider for 2018: All of the 18 names are seen rising +25% or more,...

Will The Fed Be Dovish Enough

Sentiment has changed dramatically from one month ago. FED RATE CUT PROBABILITY On May 19th, 2019: June meeting: 9% July meeting: 22% Sept meeting: 47% Oct meeting: 56% Dec meeting: 73% On June 19th, 2019: June meeting: 23% July...

Useless Chart of the Day

If you turn on CNBC today or tomorrow, you will see plenty of useless charts and data. If you see this cool looking chart it is best to turn the channel, hit mute, etc. if you have not already done that. Here’s every event since...

Market Morsels

1,777 Americans filed with the Federal Election Commission to run for president in 2016, a requirement for candidates who raise or spend at least $5,000 of contributions and expenditures. 45% of the world’s population (3.4...

Market Morsels

The US bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $43.1 trillion as of 3/31/19. Treasury debt ($15.9 trillion) makes up the largest piece of the US bond market, according to the...

Visual of the Day

This interesting diagram from Visual Capitalist breaks down all U.S. energy use by both source and industry, and everything that happens in between. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Market Morsels

Mount Everest in Nepal is making history this climbing season having issued 381 permits–the highest number ever. Anyone who pays the $11,000 cost is eligible for a permit to climb Mount Everest in Nepal. Additional costs of...

Coffee Margins & Migration Trends

Coffee as a commodity is inherently volatile, but the past ten years have been particularly bad for coffee farmers. Right now according to a recent article by Kevin Seiff in The Washington Post, coffee sells at $0.89 per pound, which...

Market Morsels

According to IAB (Internet Advertising Bureau) and PwC (Pricewaterhousecoopers), internet advertising revenues in the U.S. hit $107.5 billion last year, the first time the figure made it past $100 billion. Over 3,500 mergers were...

Market Morsels

MONEY – The top 10% of taxpayers received 47% of the $10.2 trillion of adjusted gross income (AGI) earned nationwide in tax year 2016. The bottom 90% of taxpayers received the other 53% of AGI (source: IRS). SUBJECT TO A TARIFF?...

OOPS

In my Chart of the Day, you can see the value of analyst predicting the level of interest rates out 6-months and 12-months. Exactly…no value added whatsoever – outside of this being a contrarian indicator. It’s good...

...Even If Historically Rare

Based on my earlier entry on BlackRock’s Capital Market Assumptions of forward 10 year returns for US Stocks and Bonds, I thought it very interesting that these low level of returns rarely happen. When measured over rolling 10...

Prepare For Low Returns...

BlackRock recently put out a research piece outlining their Capital Markets Assumptions for the next 10 years. They are underwhelming but appropriate based on current valuation levels and interest rates. They predict US Stocks will...

Up & To The Right...

…Is Not Always A Good Thing Non-Financial companies continue to pile on debt. This level is approaching $6.5 trillion. What happens when credit spreads widen and new bond issuance slows as the economy and profits slow? A...

Operation Overlord

D-Day. June 6, 1944. The Eyes of the World Are Upon You By The Numbers 7,000 Ships 132,000 Men on the Beaches 23,000 Airborne Troops Dropped Behind Enemy Lines 12,000 Allied Aircraft 10,000 Allied Vehicles 4,414 Allied Troops Confirmed...

The Definition of Correlation

In a picture at least! In my Chart of the Day, you can see the absolute positive, meaningful correlation to the expansion of Global Central Bank Balance Sheets to the recovery and expansion of the S&P 500. As I have said many times...

Chart of the Day

In what is no surprise, especially since every part of the yield curve – except the 30 Year US Treasury bond – is trading BELOW the Fed Fund Rate, we should expect to see the Fed cuts rates. As the Chart of the Day,...

Did You Know?

There is a lot to digest in the Chart of the Day, so here is a synopsis: Market-cap weighted benchmarks like MSCI World UNDERPERFORM equal & GDP weighted country allocation. Investors who balanced all countries to the same weight...

Availability Bias

From the @OurWorldInData, a chart that should be printed, cut out, and taped to every computer monitor and TV screen in the world: Causes of Death What People Search on Google What the Media Covers Annie Duke on Availability Bias: Take...

The 500's

Fortune magazine just published their annual Fortune 500 list. Their are the usual fantastic profiles on several of the companies on the list that are worth the read. However, what struck me was a small sliver of a stat nestled on page...

Bond Market Returns

In my Chart of the Day, I provide you evidence that the bond market is anticipating lower rates. Long-term corporate bonds are the best performer, returning more than the MSCI AWCI Index, which measures global stocks. Stay Tuned,...

Did You Know?

May 29th is College Savings Plan Day. This is a day to recognize the tax-advantaged account that allows families to save for their children’s educational expenses. That plan is called the 529 Plan. As in 5/29! Stay Tuned,...

Chart of the Day

States ADD to string of tax revenue gains, per Pew. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be...

Memorial Day

On what is now a tradition on my blog, Memorial Day is a time to reflect on the brave men and women who sacrificed the ultimate gift – life – to protect our freedoms. This is the story of Travis Manion and Brendan Looney....

Chart of the Day

BAA (Junk Bond Proxy) vs. 10-Year Spread Jon Krinsky, Managing Director and Chief Market Technician at Baycrest Partners, looks at a few of the technical red flags that exist for the US stock market as we head into the summer. The BAA...

Say What?

C’mon Bloomberg! Here was a headline click bait tactic to get you to talk about: Stock Traders Wait Anxiously for a Trump Tweet to Reverse Rout HOPE IS NOT A RISK MANAGEMENT PROCESS! If you are a serious investor and you are...

Chart of the Day

Awesome Infographic from the folks at Visual Capitalist on a brief history of US Trade Wars: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember...

Chart of the Day

Our economy finds a way to consume – even at a slower rate as I am predicting. As you can see in the chart below US importers have been finding alternatives to China since the end of last year. So who feels the effects of a...

China's Rebuttal

Peoples Bank of China (PBOC) warns of ‘global economic uncertainties brought by trade frictions with the United States.’ “We are preparing for a protracted trade war with the United States.” ~President Xi...

International Conundrum

When you study asset allocation and diversification there is always a sleeve for International stocks as they historically diversified a portfolio of only US stocks and improved overall returns. Well that what the text books say! It is...

Question of the Day

The amount of bonds with a negative yield is higher than $10 trillion, according to Bloomberg. This means that by the end of 2019, almost 20% of the Global Government Bond Index will have negative rates. Who buys these bonds and why?...

Say What?

Individual investors are no better than institutions at hiring/firing mutual fund managers. Funds “fired” outperform funds “hired” in subsequent periods, according to updated research from Morningstar. Here is...

Beware of Mean Reversion

Otherwise know as Alligator Jaws! I don’t know when, but it will happen! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Souring Auto Loans

Serious auto-loan delinquencies – 90 days or more past due – jumped to 4.69% of outstanding auto loans and leases in the first quarter of 2019, according to New York Fed data. This put the auto-loan delinquency rate at the...

Chart & Thought of the Day

“Be greedy when others are fearful and fearful when others are greedy.” ~Warren Buffett We are currently at 68%! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Chart of the Day

The below chart is from Daniel Crosby that does a phenomenal job of outlining the historical occurrences of market moves lower. You need to prepare yourself mentally for at least one 10% plus correction each year. Therefore when it...

Trade Tantrum

Yes we have seen a pullback in stocks over the past two weeks on fear of an escalating trade war. In reality, we have seen broad weakness in Far East stock markets prior to headlines and non-confirming moves in commodities such as...

Say What?

Less than half of Americans have $10,000 saved for retirement. Fidelity estimates healthcare alone will cost an individual $130,000 in retirement. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R...

Happy Mother's Day

“Sometimes the strength of motherhood is greater than natural laws.” ~Barbara Kingsolver By the time you move out of your parents’ home, you’ve already spent 93% of the time that you will ever spend with them....

Say What?

On the heels of my Chart of the Day entry yesterday, I thought I would provide more context to the Uber IPO: Uber has the value of BMW and Ford. Uber has 22,000 full-time employees, while BMW and Ford have 334,000. The average hourly...

Chart of the Day

With the much anticipated IPO of UBER (UBER), I thought I would provide you with a word chart of caution: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Say What?

46 million typos! Some 46 million $50 bills in circulation in Australia contain a typo, misspelling “responsibility” as “responsibilty.” The word is in the text of speech printed on the note delivered by Edith...

Berkshire Hathaway - II

Last weekend was the annual pilgrimage for value investors to Omaha, NE from the Berkshire Hathaway Annual Meeting. I am going to have a series of entries recapping the salient points from the six hour sit down interview with Warren...

Berkshire Hathaway - I

Last weekend was the annual pilgrimage for value investors to Omaha, NE from the Berkshire Hathaway Annual Meeting. I am going to have a series of entries recapping the salient points from the six hour sit down interview with Warren...

Summer Is Coming

And you know what that means for folks from Maryland? Steamed Blue Crabs! Great news from the Chesapeake as the population of crabs has rebounded from a rough streak to the highest levels in seven years. The 2019 count of spawning-age...

Why The Rich Don’t Get Audited

The IRS is completely outgunned by the ultra-rich, according to a piece in the Sunday New York Times. One study of income hidden from the IRS found that it’s the richest who hide it the most effectively: the top 0.5 percent of...

Charts of the Day

While this is not close to the earnings losses of IPO’s, ~35% of the Russell 2000 companies are not profitable. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Return Quilt of the Month

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Good "Behavioral" Investors

Daniel Crosby put together an initial list to distill the fundamental building blocks of what makes good investor behavior: Accept Responsibility Embrace Pain Develop Patience Welcome Uncertainty Relish Simplicity Measure with Purpose...

Chart of the Day

As you can see below current Fed Chairman Powell may want to dial back the rhetoric, press conferences, dot plots, etc. I can’t imagine his boss President Trump is too happy with lower prices and higher volatility! Stay Tuned,...

Thought of the Day

Morgan Housel Undervalued: An asset you just bought. Overvalued: And asset you wish you bought. Bubble: An asset with performance so great that jealously/curiosity causes you to investigate who owns it which makes you realize how many...

Trillion Dollar Curse?

Barron’s had an interesting note this weekend on companies that hit the proverbial trillion dollar market cap. Microsoft was the latest company to eclipse this exclusive hurdle, only to fade in the afternoon to close at a measly...

Paper or Plastic - II

12 Minutes Estimated time of use for a single-use plastic bag, compared with the 500 to 1,000 years it takes for that bag to break down. Meanwhile, nearly 100 municipalities had straight-up banned such bags as of last March. Stay Tuned...

Paper of Plastic

New York recently became the second state to ban plastic bags, joining more than 240 cities and counties that have banned or put a tax on bags since 2007. The issue is that taxing bag use may be a more effective use of resources than...

Rhetorical Question of the Day

In the Chart of the Day we outline tax revenue that each OECD country collects as a percentage of its GDP. I guess I shouldn’t complain about the crumbling infrastructure or giant slalom roads here in the Garden State. Stay Tuned...

Now That Is A Commitment

California is giving 100% a go! The governor signed a new bill to get CA to use 100% clean energy by 2045. This means that all electricity used by the state needs to come from things like wind and solar power. This new bill is...

Map of the Day - II

After my entry yesterday on the salary needed to buy a home in the largest metropolitan areas in the US, I wanted to share with you the Cheapest and most Expensive areas, according to HSH.com. The Cheapest Metro Area Pittsburgh, PA...

Map of the Day

This is a great representation from Visual Capitalist on how much salary is needed to buy a home in 50 US metro areas: As a reference point, the median home price in the US is ~$257,000, according to the National Association of...

Earth Day

“The environment is where we all meet; where all have a mutual interest; it is the one thing all of us share.” ~Lady Bird Johnson What are you currently doing to be environmentally conscious, from both an investment...

Earnings Recession

As you can see in my Chart of the Day, consensus forecasts now point to a 0.4% drop in earnings per share for the second quarter. That follows estimates of a 4.6% decline in the first quarter which would earn the label of an earnings...

Magazine Cover Jinx

Two weeks ago it was Barron’s with their ‘Is This Bull Unstoppable‘ cover. This week it is Bloomberg BusinessWeek: If you recall BusinessWeek nailed a low in equities in 1979 with its now infamous cover entitled...

How Are You Incorporating ESG?

According to a recent study from Allianz Global, 71% of investors aim to manage all of their portfolios in an ESG-conscious way by 2030. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Say What?

Monetary Madness Accelerates Greek debt touches the lowest yield since 2005. Greek 5-Year yields now trade 20 basis points BELOW 5-Year US Treasury yields. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Trump Begging For Stimulus

According to President Trump, “if the Fed had done its job properly” the Dow Jones Industrial Average (DJIA) would have been up an additional 5,000-10,000 points and GDP would be plus +4%. Maybe so, but the domestic equity...

$1.8 Billion

While Goldman Sachs and many other financial services companies are reporting earnings beats (read: on a year-over-year basis earnings are lower, but Wall Street analysts have very low estimates so we “beat” quarterly...

Happy Tax Day

Here is a very good summary of what the tax law changes from late 2017 have meant to you, corporations and the government. And here is a reminder from the Stoic – Seneca in Moral Letters, 96.2: Nothing will ever happen to me that...

A Bit Overvalued

While I have mentioned this previously, the IPO market this year has seen its fair share of hot trends and high valuations. As an example, Zoom trades at 60 times sales. While the S&P 500 trades at 3 times sales. {This is not a...

(Continued) Rise of the Dollar Stores

For my Chart of the Day, the NPR podcast Planet Money spoke of the benefits and problems with the dollar stores. Four new dollar stores will open in the U.S. every single day of 2019. That’s a new dollar store every six hours....

Tax It...

…And They Will Leave “From 2011 to 2016, the most recent half decade for which IRS migration data is available, California had a net loss of more than 243,000 people, with an annual income in excess of $7.7 billion, to...

Tax Dollars At Work

No I am not talking about the fantastic infrastructure in the Garden State, but the amount of money the two largest tax preparation firms spent on lobbying last year. Intuit and H&R Block spent a combined $6.6 million last year in a...

I Couldn't Resist

After my post on Herman Cain yesterday, I found yet another sponsored e-mail from Casey Research dated March 30th. The e-mail claimed: “It’s my sincere hope you and your family survive what’s coming. But only those...

Interesting Timing

As rumors continue to swirl about a Herman Cain nomination to the Federal Reserve Board, the President Trump loyalist release this sponsored e-mail suggesting readers could turn “$1,000 into $800,000” using a certain...

Truth of the Day

Lyft, Inc. (LYFT) only has to rise by around 52% to reach its IPO, day one pop and the price that Jim Cramer told his viewers said was a good entry. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Chart of the Day

No this is not multi-colored pasta. This is a graph showing Rate of Change for Consensus Earnings for 2018 (top) and historical Operating Earnings going back to 2011. In short, expect earning to slow throughout 2019. Stay Tuned,...

Thought of the Day

Howard Marks, CEO of Oaktree Capital Management: “It’s essential to note that rational and unemotional investors are very much in the minority.” How do you practice this life and financial keystone habit? Stay Tuned,...

Why Did Markets Plummet in December?

They anticipated the global economies were slowing! Not this does not automatically mean a recession, it simply means that on a Rate-of-Change, Year-over-Year basis GDP is slowing. This can be seen in my Chart of the Day outlining...

Follow The Big Rig

Demand for big rig trucks has tanked. In March, the order for 15,700 Class 8 trucks by North American freight carriers was 6.7% lower than February and 66% lower than the orders in March of 2018, according to preliminary estimates....

Buyer Beware

In my Chart of the Day, junk bond bond yields are at their lowest levels since October of 2018. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

Stat of the Day

The S&P 500 rallied more than 1.5% in March. The Russell 2000 (small caps) fell more than -2% in March. Over the past 20 years, this divergence only happened one other time: March 2000 Stay Tuned, Disciplined & Patient! {TJM} The...

Say What?

The guy who wrote “Reading Between the Lies: How to Detect Fraud and Avoid Becoming a Victim of Wall Street’s Next Scandal” was busted for steering investors towards a Ponzi scheme. And No this is not an April Fools...

Did You Know?

Saudi Arabia for the first time revealed details to investors that show its national oil company is the world’s most profitable business, demonstrating that the cloistered kingdom is willing to undergo unprecedented scrutiny to...

Only 18% Have A Written Financial Plan

According to Fidelity, the findings suggest there is an opportunity for those who are simply thinking about it to take the first step toward more mindful planning – a good starting point in establishing habits that can eventually...

Truth of the Day

In most developed countries, massive investment in water infrastructure coincided with rapid urbanisation at the beginning of the 20th century. More than 100 years later, this infrastructure has reached the end of its life cycle and...

2000's Redux

Ride-hailing company Lyft Inc. is leading a parade of Silicon Valley companies to Wall Street that display an unusual quality with parallels to companies going public in the dot-com era: lots of red ink. Stay Tuned, Disciplined &...

Say What?

I am all for Capitalism but after receiving my personal tax bill this year I am scratching my head? Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

FOMO vs. FOLO

This is Behavioral Finance 101. VItaliy Katsenelson explained the importance of being a Rational Investor this way: The stock market is not your friend. You want to approach it the same way the American president should approach a...

Market Morsels

CLEAN YOUR FRUITS: According to the Environmental Working Group’s annual analysis of US Department of Agriculture data, about 70% of fresh produce sold in the US has pesticide residues on it even after it is washed. RECORD HIGH...

Chart of the Day

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

An Outlier

In my Chart of the Day, we compare US 10-Year Treasury Bond Yield to the S&P 500 Returns over a 3-Month period. As you can see the current level is an outlier and is quite unique. As Liz Ann Sonders pointed out, history shows neither...

Adjusting Future Stock Return Expectations

Regardless of valuation levels, periods of high unemployment (Unemployment Rate 7.2-10.8%) were followed by strong S&P 500 gains. Whereas full employment (Unemployment Rate 2.5-4.2%) combined with top-quintile valuations (Normalized...

Let The Madness Begin

$1.285 Billion In Ads March Madness is here and so are the mega numbers that accompany the tournament from both a rights fee and advertising perspective. When compared to the postseasons of other professional sports, March Madness...

Chart of the Day

First it was German Banks. Now Japanese stocks. From Bloomberg: The benchmark Topix index has slumped about 30 percent over the three decades following the burst of Japan’s bubble economy in the 1990s. That stands in stark...

Chart of the Day

What investing $100 at the IPO would be worth today: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be...

Beware of the 'Side Door'

With the revelations of the college bribery scandal hitting the tape last week, I thought I would share these staggering numbers: Some numbers on admittance, cost, and the importance of college: 61% of kids from families earning more...

Fact o' the Day

Only 47.7% of stocks generated a life-time return that match one-moth US Treasury bills. Investing is hard, so when you start to think it is easy, watch out! Oh and Happy St. Patrick’s Day! Stay Tuned, Disciplined & Patient!...

Amazon vs...

NOTE: This is not a recommendation to buy or sell any securities mentioned. Just reporting data from Bloomberg: As it stands, Amazon is UPS’ largest customer, and it’s also FedEx’s fourth-largest customer, so the...

Etsy Delivers

Not only do they deliver to their vast customer base, but also to the environment. They will power 100% of their operations with renewable energy by the end of 2020. They are not stopping there as they think about offsetting the carbon...

Chart of the Day

After peaking prior to the Great Recession, the US home ownership rate has been surging. This has been fueled by household formation by Millennials. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Chart of the Day

This is fascinating, but not necessarily in a good way. German banks as a whole have generated ZERO returns (actually slightly negative) over the last 30 years! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Say What? Government Wast Edition

This story is maddening! The federal government spends a disproportionate amount of its budget for outside contractors in the final month of the fiscal year, as agencies rush to blow through cash before it’s too late. Among the...

Environmental Trifecta

The green thumb is making a comeback, with 6 million Americans taking up gardening in 2016, of whom 5 million were Millennials. It’s a $47 billion industry in the United States and the average gardening household spends $503 on...

Election Season Is Here

The gold-standard of Iowa political polls released a new survey over the weekend, and Iowa Democrats remain most supportive of former vice president Joe Biden. Twenty-seven percent of likely Democratic caucus goers say Biden is their...

Is Buffett losing His Touch?

Not really. However, the size of Berkshire Hathaway and the massive amount of money he has to allocate severely limits his investment opportunities. Again, CXO Advisory on this topic: This chart shows differences between Berkshire...

Say What?

Why am I not surprised! Insiders unload significant amounts of stock upon announcing a buyback and benefit from short-term price pop at the expense of long-term shareholders. SEC research found that many corporate executives sell...

10 Year Anniversary

The S&P 500 INTRA-DAY low came 10 years today. It hit 666.79 on March 6, 2009. That morning, the February Non-Farm Payroll printed a LOSS of 651,000 jobs, and December’s was revised to a 60-year high. Yet, it may stand as one of...

Speak The Truth...Almost

The economic data we get out of China may not be the most accurate. However, China’s Premier Li Keqiang opened the National People’s Congress by pulling no punches: He announced the weakest growth targets in 30 years of 6-6...

Buffett's Alpha

The research team at CXO dug deep into Berkshire Hathaway and found that the the stock has outperformed the S&P 500 with the same level of risk. The following chart relates annual Berkshire Hathaway stock return to same-year S&P 500...

Even The Best Make Mistakes

After my entry on Berkshire Hathaway, I wanted to point out that even the best investors make mistakes. In fact, the best investors typically hit on 65% of their stock ideas. Anything above that over a full market cycle may be illegal!...

Berkshire Hathaway Annual Report

Your reading for the week! But just in case you are short on time, here are 10 highlights with more to come: Berkshire will no longer utilize Book Value as the firm’s major value lies in its operating businesses, not its...

Water Infrastructure Update

According to the research team at Water Asset Management The American Society of Civil Engineers (ASCE) 2017 report card gave the country’s water and waste water systems a D. A large portion of the nation’s drinking water...

Student Loan Update - II

This is not an offer or endorsement, just an interesting product in case you are one of the many saddles with student loans. Enter CommonBond, an innovative service that allows you to trade in your original, expensive student loans for...

Student Loan Update

Delinquent student loans hit $166 billion in the fourth quarter, but that rate underestimates the effective delinquency rate by about half, so we’re looking at something like $333 billion in student loan debt that has not been...

Chart of the Day

A Global Economic Slowdown – in chart form – follow the trend: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Say What?

Check this data out from Bespoke Investment Research: Since 1993: Buying the S&P 500 at open & selling at close every day (ie, only holding it during trading day) = -13.9% return Buying the S&P 500 at close & selling at next open (ie,...

Keeping Emotions In Check

Which would you rather have your $10,000 grow to? $40,810 = 7.3% Annually => Emotions Held In Check $28,057 = 5.3% Annually => Driven By Emotions Exactly! But in order to make your initial $10,000 investment grow to $40,810, you...

A Disconnect In Markets

“Every single line item in GDP slowed. So the data just slowed a lot faster than what even the most bearish firm on Wall Street predicted. So where could we be wrong? I think it’s possible we’re not bearish enough...

Say What?

Amazon will claim a federal tax rebate of $129 million for 2018, essentially paying a federal tax rate of negative 1 percent. The company, which recently concluded it could not hack it in New York, made over $11 billion in 2018, yet...

Thought of the Day

What will happen to the multi billion dollar car insurance industry as we begin to remove human error from the equation with driver less cars? A report forecasting the impact of automation estimated that there will be 23 million...

Most Financial TV Is Worthless Noise - III

Just ask Charlie Munger, the billionaire is Vice Chair of Berkshire Hathaway (Alert: Annual Letter Coming This Saturday!) and Warren Buffett’s partner: “At Berkshire Hathaway and the Daily Journal we’ve done better...

Say What?

The apparel industry uses an eye-popping amount of water, with one study estimating the industry consumes 79 billion cubic meters of water per year, which is roughly the amount of freshwater the Nile discharges annually. Most of that...

Extreme Brevity of the Financial Memory

John Kenneth Galbraith – Short History of Financial Euphoria “There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of the...

Most Financial TV Is Worthless Noise - II

Here is an example: Paul Krugman (11/9/2016): “So we are very probably looking at a global recession, with no end in sight.” NEVER HAPPENED! Paul Krugman (2/10/2019): “I think that there is a quite good chance that we...

Most Financial TV Is Worthless Noise

I have been pounding this drum for some time, along with the adage of you get what you pay for. Here are highlights from a recent article from TEBI – an Australian News Service: Mostly those daily reports were about as useful for...

Tax Refunds Lower

Although it is just the first week of filings. Politico: “The average tax refund from the IRS dropped 8.4 percent in the first week of the 2019 filing season compared to the same period last year, according to agency statistics....

Central Banks Snapping Up Gold

Central banks have bought the most gold since the end of the second world war with the commodity becoming an increasingly valuable hedge against growing global instability. This was the recent headline on BusinessInsider. I would make...

China Infrastructure

While the Chinese economy has been slowing for the past 12 months, one must marvel at the speed and efficiency of their infrastructure build-out. This is also one reason to continue to monitor the development of the One Belt & Road...

Global Growth Slowing

Below are two examples of the slowdown taking hold across major economies: U.K. ECONOMY FALTERS AHEAD OF BREXIT NYT’s Peter Goodman: “As Britain slides toward a tumultuous exit from the European bloc, cities on the...

50/50 Odds

Of a government shutdown later this week. With a looming Feb. 15 deadline, talks to forestall another government shutdown reportedly “abruptly fell apart” over the weekend. According to Politico sources, the talks broke...

Not Normal Market Behavior

To say that equity markets are on a rollercoaster ride is an understatement. Analyzing 1,094 months of S&P 500 Index data (since January 1928), we find just 32 months in which the equity index experienced a loss worse than the December...

Quote of the Day

Christian Drake – Hedgeye Risk Management “The State of the (Global Macro) Union to start 2019 remains one of discrete (Global Economic Growth) Deceleration with an investing citizenry conditioned to the pervasive but vapid...

Foreign Currency Effects

The ICE Dollar Index jumped 4.4% last year, the most since 2015. And for multinationals that sell products overseas, that dollar strength (paired with the ongoing trade war) presents a major challenge, reports Bloomberg. Quantifying...

Impact Investing

BP Board Supports Proposed Vote on Climate-Change Shareholder Resolution Following pressure from a coalition of more than 300 investors managing $32 trillion in assets, BP supports a vote on a resolution requiring disclosure of more...

The 1% Threshold

In my Chart of the Day, we get an idea of what it takes to be in the 1% club around the world. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember...

Important Reminder

Since I am a firm believer that Cash is an asset class and that you should have a separate account for emergency needs, you need to optimize the yield on these balances. Jason Zweig addressed this very issue in his recent Intelligent...

Expect This To Continue

As investor realize both the economy and profits are slowing on a year-over-year, rate-of-change basis: December – Worst Ever S&P 500 -8.8% MSCI EAFE -5.3% Russell 2000 -12.0% Emerging Markets -3.0% January – Best Since...

The Best Part of the Snooze Bowl

Not the game (unless you like two masterminds winning their 6th ring). Not the commercials (although the NFL 100 and Bud Light/Game of Thrones crossover were highlights). Not the halftime show (but this time lapse video of the...

So Goes January...

So goes the year for U.S. Stocks Historically, positive January returns for US stocks bodes well for the rest of the year. Since 1926, when January has been positive the calendar-year return has averaged over +17% versus years when...

Bulls Want The Rams

The Wall Street Journal published the updated results of the Super Bowl predictor: Bullish investors who look at an unscientific but popular indicator will be rooting for the Los Angeles Rams on Sunday when they face the New England...

Super Bowl Ad Update

A 30-second ad spot during the Super Bowl is going for between $5.1 million and $5.3 million. That’s a massive 96 percent jump since 2008, when a 30-second spot went for $2.7 million. The real estate is just a fraction of the...

Chart Truth of the Day

As you can see from the Hedgeye chart below, economic growth is slowing all over the globe: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember...

Super Bowl Market Morsels

The Perfect Time To Use The Bathroom It’s inevitable that at some point during the Super Bowl broadcast you will probably want to pee. But with so much going on, choosing the perfect time can prove perilous. According to a new...

Cash Is An Asset Class

“We’re not really ever positioning ourselves. We’re simply trying to do the smartest thing we can every day when we come to the office. And if there’s nothing smart to do, cash is the default option.”...

Will It Be Enough...

…To Suspend Economic Gravity? Not from a year-over-year rate-of-change basis. China’s growth rate was 6.6% in 2018, a 28-year low, according to a report in the Nikkei. In order to keep their foot on the gas, the Chinese...

Behavioral Thought of the Day

This paragraph is from The Behavioral Investor by Dan Crosby is a must READ, must PRINT, must REMIND, must SHARE: “Think about the most meaningful thing you have ever done. I would wager that it took a measure of risk,...

How To Be A Great Investor - II

Continuing on my highlights from Damn Right: Behind The Scenes with Berkshire Hathaway Billionaire Charlie Munger: Develop a Mosaic by Gathering Information: “I think both Warren and I learn more from the great business magazines...

How To Be A Great Investor - I

From Damn Right: Behind The Scenes with Berkshire Hathaway Billionaire Charlie Munger: First of all, you have to understand your own nature, said Munger. “Each person has to play the game given his own marginal utility...

Great News on the ESG Front

The total number of electric vehicles on global roads surpassed 3 million in 2018. This is a 50% increase over 2016, according to the International Energy Agency (IEA). According to a recent report from Goldman Sachs, last week’s...

Commodity Chart of the Day

The 2018 Periodic Table of Commodity Returns Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of...

Martin Luther King Jr.

This is one of my favorite quotes and dovetails beautifully into The Investor & Character Equation: “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of...

Don't Listen To Central Bankers

Want to know why the Fed never predicts a recession? To do so would accelerate the arrival of a recession. This would set off a chain reaction of events. Investors would sell stocks Markets would tumble Confidence would be shaken....

RIP Jack

Vanguard founder Jack Bogle died January 16 at age 89. He built it into an investing colossus, with more than $5 trillion under management. But his most lasting impact will likely be his evangelization of the humble index fund—a...

Watch Out Below

The rally we have seen since Christmas Eve look to be a counter-trend rally. I would argue that we have rallied for the following reasons: Chinese Central Bank cuts reserve requirements ECB issues dovish comments Federal Reserve may...

Don't Wait For The Recession

I wanted to highlight a great research piece from CornerCap that highlights the fact that by the time we are in a recession stocks are typically within their bottoming process. Thus, the ‘recession call’ is not a signal to...

Say What?

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Movin' On Home

Out of every ten parents of young-adult children (age 18 to 35), eight are providing them with some kind of financial support. This new Merrill Lynch-Age Wave survey reveals the full extent to which today’s Boomer-age parents...

Say What?

Apple is United Airlines biggest corporate customer globally. Apple spends $35 million per year on flights from Shanghai and San Francisco, according to research from David Ulevitch. Apple purchases 50 business class seats A DAY...

Where Are We?

In the Chart of the Day, we try to locate where we are in this market cycle? Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Thought of the Day

“If you eat, invest, and think according to what the ‘news’ advocates, you’ll end nutritionally, financially, and morally bankrupt.” ~Naval Ravikant Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

This Pains Me

The era of recycling may be coming to an end. OK – not really. The era of “easy, single-sort recycling” may be coming to an end. Twenty-five percent of the stuff we try to recycle is too contaminated, and heads...

GDP, Inflation & Profits

These are the primary driver of cycles. One of the first things I do each morning is remind myself where are are in the cycle. As I have been saying we are seeing a slowdown in both economic growth as measured by GDP and inflation as...

Even Managed Futures Didn't Work

In my Chart of the Day, the Managed Futures space which is know for being non-correlated to stocks and bonds, did not work during the sell-off at the end of 2018. So much for “Crisis Alpha” generation: The Barclays CTA...

Chart of the Day

While from a pure drawdown standpoint, 2018 was not even close to 2008. However, notice that diversification helped investors more in 2008 as five major asset classes were positive versus just one last year. Stay Tuned, Disciplined &...

Watch High Yield Spreads

In my Chart of the Day, I wanted to show you one of the risk management signs I watch on a daily basis. It is the spread between the yields in Investment Grade Bonds vs. High Yield (Junk) Bonds. As this spread widens, the current...

Stats of the Day

LONG-TERM: The S&P 500 has gained an average of +9.8% per year (total return) over the last 50 years (i.e., 1969-2018). The index was down in 2018 but has been positive in 14 of the last 16 years. Over the long-term, the S&P 500 has...

Stats of the Day

More than meets the eye: The average stock in the large-cap Russell 1,000 index (large caps) fell 9.18% in 2018. 9% of stocks in the index gained more than 20% in 2018. 35% of stocks fell 20% or more. Stay Tuned, Disciplined & Patient!...

Chart of the Day

The best performing stocks of 2018: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future...

The Asset Allocation Quilt

This is absolutely one of my favorite charts. It is now updated through 2018. In short, not much worked. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Worse Than The Great Depression

OK that was click bait, but there is a morsel of truth in the headline. 2018 was worse than the Great Depression in one area: 93% of all global assets finished the year in negative territory. This was the WORST year on record. This is...

Happy New Year

Here is a great list from Vala Afshar to start the new year: Don’t be impressed by: Money Job title Appearances Experience Affiliations Imitation Big words Be impressed by: Kindness Trustworthiness Unselfish generosity Humility...

Focal Point For The New Year

“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” ~Benjamin Franklin Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Rage Against The Machine

No offense to the rock/metal band of the 1990’s, but investors must get used to dealing not only with their emotions but also trading against the machines. According to the article in The Wall Street Journal: 85% of all trading...

Thought of the Day/Year

“The human factor is always incalculable.” ~Agatha Christie This is why you need a process and the discipline to stick to the process, along with being apolitical and unemotional. Stay Tuned, Disciplined & Patient! {TJM}...

Stat of the Day

It’s hard not to have notable stats with the massive spikes in volatility to both the upside and the downside, often intraday. There have been 8,662 trading days since August 1984 (the furthest back there is intraday trading...

Stat of the Day

Over the past 3 trading days, we’ve seen the S&P 500 lose -4.7% over two days, only to gain it all back, and then some, on the third day. Since the Depression ended, that’s only happened two other times: October 9-13, 2008...

Well That Was Interesting

I guess the Santa Claus rally is back on track! Today ~5% rally erased the Christmas Eve sell-off and most of last weeks losses. Notice I said nothing about points. The absolute points gain or loss DOES NOT MATTER, the PERCENTAGE DOES!...

Merry Christmas

To all of my readers who celebrate Christmas, I wish you a wonderful day filled with family and friends. To those who don’t celebrate Christmas, I wish you a day of rest and relaxation. To all of you, the markets will reopen...

What Is Your...

…Sleeping Point? Stock market Corrections (10% Loss from Recent Highs) and Bear Markets (20% Loss from Recent Highs) are typically the best and most painful way to actually find it! Stay Tuned, Disciplined & Patient! {TJM} The...

Difficult Operating Environment - II

Dear readers I would get used to this heading. Here’s the latest tally after last week: The S&P 500 lost 7 percent for the week and is now down 17.8 percent from its record. The Nasdaq lost 8.3 percent on the week and is now 22...

Answer of the Day

Question: “What keeps you awake at night?” Answer: “Nothing, I keep other people awake at night!” ~Former Secretary of Defense, Jim Mattis Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character...

Difficult Operating Environment

This is just a sample of how just about every asset class has fallen for in the 4th quarter, and this was before yesterday’s move lower: Energy = -22.3% Growth = -22.0% High Beta = -21.7% Small Cap = -20.2% Technology = -17.1%...

Do Tariffs Make America Rich Again?

So far, there’s not much evidence of that based on a recent report from the Council of Foreign Relations. Much to the dismay of President Trump who proclaimed himself ‘Tariff Man.’ As the left-hand graphic below shows...

Trend of 2018

Well I should have said Top Trend of the 4th Quarter of 2018. Interesting note: the Google search term “Bear Market” was typed more often in late 2018 than during the Global Financial Crisis! Stay Tuned, Disciplined &...

This Is Normal

While I know it doesn’t feel normal, the recent stock market sell-off is actually an annual occurrence. Except in 2017, we did not even get a 5% pullback. That is not normal? Yesterday, the S&P 500 hit a new year-to-date low. But...

Chart of the Day

Not necessarily a good sign for the underlying health of the markets. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance...

Speak The Truth

“There are three words which are among the most important words in our business: I don’t know. And if you don’t know something…you should admit it—to yourself and to everybody around you. And I think...

Thought of the Day

“Investment success does not require glamour stocks or bull markets.” ~John Neff Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember...

New Era of Investing

In the Chart of the Day, you can see that the average holding period for domestic public company stocks has fallen dramatically: 1976 = 60+ Months 2015 = 7.3 Months This is a win for exchanges, broker-dealers, Wall Street and...

Chart of the Day

With two kids just a few years away from college, this chart does not warm my heart. Maybe I should just buy them a TV and phone instead! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Highway To The Danger Zone

It should come as no surprise to regular readers that the risk of a recession is rising. Especially based on my thoughts on a slowdown in economic growth on a year-over-year basis. In the Chart of the Day, Ned David updates their...

This Is Great

Here is your Chart of the Day: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results....

Tax Cut Update

We are nearing the one year anniversary of President Trumps tax cut package. From a cost/benefit analysis, it remains to be seen how effective these tax cuts are. One could argue that it extended the bull market in the US by several...

Persepctive

While mortgage rates have risen from bedrock levels, they are still well below historical rates. My first mortgage in the mid-1990’s was a 30-year fixed at 8.5%! Today, even with the rise in rates they are at 4.75%. Stay Tuned,...

Another Perspective on October

As you can see from the chart appended below, October was truly a difficult one for investors. From a diversification standpoint, typically stocks and bonds don’t fall at the same time; however, this is not an iron-clad...

Stat of the Day

Is competition disappearing? 2 corporations control 90% of the beer Americans drink 4 players control the entire U.S. beef market 5 banks control about half of the U.S.’s banking assets However, these are all highly regulated...

Keep On Your Radar

There is much consternation in stock markets about trade deals, tariffs, tweets, executive arrests, program trading, etc. No matter what the headlines scream at the end of the day when I measure and map economic growth and inflation,...

Remembering 41

Our thoughts are with the family of President George H.W. Bush, a man who dedicated his life to serving our country. Sully has the watch: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Whom to Blame for Tuesday’s Sell-Off?

The “Tariff Man” or the yield curve inversion? President Trump on Tuesday issued his most market-moving tweet yet with this gem at 10:03 a.m.: “I am a Tariff Man. When people or countries come in to raid the great...

Thought of the Day

Joel Greenblatt Unless you buy a stock at the exact bottom (which is next to impossible), you will be down at some point after you make every investment. Your success entirely depends on how dispassionate you are towards short term...

Centrally Planned Interventionism

How is that for a new catch-phrase! I can’t take credit for it though. It was Danielle Lacalle. He penned an article asking: Are Central Bankers Nationalizing The Economy? Here are some key stats: The US Federal Reserve owns 12...

George H. W. Bush Letter to Bill Clinton

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Global Equity Returns

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Correlations

We study a wide variety of correlations between various investments and other factors. Below I wanted to highlight an interesting chart that has a very high degree of correlation. In short, based on this historical analysis dating back...

Another Word of Caution

Last year at Thanksgiving, most were talking about Bitcoin and cryptocurrencies. This year – not so much! Here is a stark reminder in a recent article from Reuters in regards to where you are getting your recommendations and how...

A Word of Caution

With the upcoming G20 Summit this week, many financial pundits are looking for any reason for the market to rally into year end. Many have discussed the potential trade deal between Trump and Xi as a catalyst for the recent move higher...

Chart of the Day

PIMCO put together this chart on how Risk Factors perform in various parts of the market cycle. As you can see below, over the full sample, US stocks beat both US corporate bonds and US Treasuries based on risk-adjusted returns....

Apple & Drawdowns

Here is a history lesson on Apple, but this applies to most stocks as well. Over the last 15 years of holding stock in Apple (AAPL): 1 out of every 4 days you were in a 20% drawdown or more 61% of the time you were in a 5% drawdown or...

Romaine Calm and...

I couldn’t resist! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results....

QE Babies

This is really an issue since we have been on the Quantitative Easing (QE) drug for 10 years. This is from Greg Ip in The Wall Street Journal: While I would argue QE was necessary at the time, I could also argue the Fed kept rates too...

Happy Thanksgiving

Chart of the Day Here is what America Eats on Thanksgiving Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be...

Math

If you are a current investor in the FAANG stocks you are feeling the recent pullback. If you are a current investor in Bitcoin – OUCH. You have just experienced a 75% decline in 11 months. The reason for this is not a buy or...

Perspective

This time with Natural Gas price volatility. As you can see from the top bold line, historically natural gas prices are very volatile. You can see the small hockey stick up recently, but if you look back over nearly 25 years the recent...

Investing Maxim

Joel Greenblatt “Unless you buy a stock at the exact bottom (which is next to impossible), you will be down at some point after you make every investment. Your success entirely depends on how DISPASSIONATE you are towards short...

When Will The Fed Stop Raising Rates?

While this article and the details below are a bit wonky, it supports the premise that the Fed may NOT need to raise rates next year. Especially into an economic and inflationary slowdown as I am predicting. From the CFR: Our...

The Grades Are In

And they are not good. One selling point all politicians go to is the passage of an Infrastructure bill. No thoughts or plan on how to raise the funds to fix our dilapidated system. Just that it will be a positive spending and stimulus...

That Time of Year

I just received my Bloomberg BusinessWeek 2019 Outlook edition and I had to share this note from 2012. The editors at Fortune issued the Golden 10 Companies in 2000. Well as you can see not much gold in them there hills with this group...

Is The Fed Getting Nervous?

The staff at the FOMC recently added a question to its Survey of Senior Loan Officers last quarter: How would you respond to a ‘prolonged hypothetical moderate inversion of the yield curve’? With the yield spread shrinking...

Thought of the Day

Daniel Crosby – The Behavioral Investor “Although the media talks about 10% and 20% market losses as though they are the end of the world, they arrive as regularly as spring flowers and have not negated the tendency of...

Rise of The Machines

Chart of the Day ATS stands for Automated Trading Services. This trend will not be changing so instead of complaining about it, we have tried to incorporate this fact it into our investment process. Control What You Can Control! Stay...

Spot The Anomaly - II

I recently wrote about how 2017 marked a year in which stock market volatility was at historically low levels. As it turns out, the past five years can also be categorized as one with historically low levels of downside volatility....

Thank You Veterans

This Veterans Day, all of us at Meyer Capital Group would like to thank all those who have served this country. Please join us in remembering the many sacrifices our men and women in uniform and their families make each day to protect...

Spot The Anomaly

So far in 2018, the S&P 500 stock index has been down -1% or more on 22 days. In 2017, stocks only had a -1% or more down day 4 days the whole year. 2016 had 22 days the S&P 500 stock index was down over -1%. 2015 had 32 days the S&P...

Pay-In-Ham

Now this may be the best or worst story of the year: I have heard of PIK bonds which are Payment-In-Kind bonds. This means that instead of receiving interest payments as outlined, you receive more bonds in lieu of the interest payments...

Cartoon of the Day

Based on my rant about the issues an investor faces when consuming free financial media and turning off CNBC, this Hedgeye cartoon is spot on: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Mid-Term Election Analysis

Just Kidding Based on my previous rant, the results of the mid-term elections have little, if any effect on the economy in the near-term. It makes for good fodder and fills the airwaves with political punditry. Ray Dalio who is one of...

Get Out And Vote

But first some thoughts: Politics and Investing DON’T MIX Be APOLITICAL In Your Investment Decisions And DISPASSIONATE And Develop and Stick to YOUR PROCESS If you find yourself reacting to tweets or headlines or stats (of which...

Stat of October

Looking at the Dow Jones Industrial Average (DJIA) daily standard deviation, October stands out as the most volatile month. From the 1920’s to 2018, average volatility was 1.12, compared with October’s average volatility of...

Chart of the Day

Yes October Was Bad… …Even For A Midterm Election Year Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may...

Remember This When Consuming Free Financial Media

Upton Sinclair “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

How Bad Was October

On the heels of my post about virtually no asset classes in the black year-to-date, I wanted to highlight the fact that basic balanced funds were hit hard. As you can see both stocks AND bonds were negative in October. Stay Tuned,...

What A Difference A Year Makes

As of the end of October, 89% of asset classes tracked by Deutsche Bank have a negative total return in $ terms. This is the highest percentage on record since 1901. Last year, just 1% finished with negative total return. Stay Tuned,...

Thought of the Day

After October spooked markets and then had the best two day rally in months, leaving investors scratching their heads: “The main purpose of the stock market is to make fools of as many men as possible.” ~Bernard Baruch Stay...

Chart of the Day

Goldman Sachs put together this cool chart that outlines various election scenarios. However, regardless my view is the US economy and inflation are slowing on a year-over-year basis and no matter the outcome that will not change. Stay...

Stop The Madness...

…Peter Schiff He recently tweeted out this piece of non-sense on China’s Financial Nuclear option: Victory plan for #China: 1. Dump all U.S. Treasuries. 2. Use proceeds to buy gold. 3. Peg yuan to gold rather than dollar....

Chart of the Day

Total household debt hit a new record high, rising by $219 billion (1.6%) to $13.512 trillion in Q3 of 2018, according to the NY Fed’s latest household debt report, the biggest jump since 2016. It was also the 17th consecutive...

This Is A Really Bad Idea

This falls squarely under the ‘Don’t We Every Learn’ category. Thousands line up for zero-down-payment, subprime mortgages | CNBC Borrowers can have low credit scores, but have to go through an education session about...

Tweet of the Morning

Twitter – the platform not necessarily the stock – is a wonderful (but potentially toxic) platform if you follow (or not) informed sources with various viewpoints. Darius Dale has the Tweet of the Day this morning when...

Thought of the Day

On the heels of this continued volatility (not going away anytime soon), I want you to take a step back, take a deep breathe and start to learn about your true risk tolerance. You will likely be more fearful when your investments are...

CNBC Nonsense

Market In Turmoil? How about Ratings In Turmoil! The median 3-month return following a CNBC special market report is +5.4% with 11 out of 12 positive. The sole loser was -0.2%. I am not saying that this is bullish indicator, just that...

Say What?

While not specifically related to investing, the following two data points are mind numbing. According to Nielsen, the average American watches 28 HOURS OF TV PER WEEK! That more than an entire day! According to two research reports...

Perspective

As I have discussed often the Federal Reserve balance sheet ballooned during the Global Financial Crisis (GFC) and rightfully so. They have been ‘slooooowly’ unwinding for a few years and then picked up the pace in 2018. As...

Personal Debt to Cash Ratios

This article and the below call outs are not prudent financial planning: Almost 1 in 3 homeowners who earn less than $30,000 per year said it’s OK to tap into home equity to cover their everyday bills, more than triple those who...

Global Stock Market Drawdowns

Below is an update of the year-to-date peak to present pull back in various equity markets aroung the globe: -6% -7% -7% -7% -8% -9% -11% -11% -15% -16% -22% -31% -36% -47% Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Imagine The Dow Dropping 5,500 Points

On this day in 1987 the Dow fell 22%! That was a drop of 508 points. It was front page news, including the volume of trades that day. Today the same 22% fall would drop the Dow – wait for it – by 5,500 points. Now try to...

Not Ready For Retirement

According to S&P Global, 30 of 50 US states do not have sufficient reserves set aside today to absorb the financial impact of an economic recession, forcing them to raise taxes/fees or reduce benefits. Unfortunately, This Is A...

This Is Jeopardy

I’ll take “Reasons To Not Live In The Northeast” for $1,000 Alex. Answer: What Is $713,706. Question: What does it take to be part of the 1% in New York City? Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

What Do Rising Corporate Debt Levels Mean

On the heels of my recent post on Corporate Debt to Cash Ratios, I wanted to provide an update on the European corporate debt markets, as well as an example of what this means for stock investors. In the below chart, you can see equity...

There Is No Next Warren Buffett

AND No Softer Side of Sears! Is the worst kept secret in all of finance, Sears officially filed for bankruptcy this morning. Eddie Lampert was profiled in BusinessWeek on November of 2004 and stepped down from the Chairman and CEO role...

Corporate Debt to Cash Ratios

The cash-to-debt ratio of speculative-grade borrowers reached a record low of 12% in 2017, below the 14% level in 2008 — meaning that for every dollar they have in cash, they have $8 of debt. Corporations are borrowing against...

Chart of the Day

Appended below is a great visual representation of the makeup of global stock markets. It is also a great representation on Home Country Bias. How many of you have 48% of your stock holdings in Developed and Emerging Markets? Stay...

Chart of the Day

While this post may be a bit wonky I wanted to provide actual facts instead of media spew. We often hear the phrase ‘cash on the sidelines’ or ‘investor buying power’ from those who want you to perpetually be...

Stop The Madness & Turn Off CNBC

This is what the headlines blared on Wednesday night post the move lower in every broad US stock index: This chart add NO Value to anything – other than providing me a topic to rant on! Points don’t matter. Percentages do....

When Is A Bond A Bond

Make sure that when you need your bonds to be diversifiers, they are. As you can see from the Chart of the Day, many sub-sectors of bonds are highly correlated with stocks. I realize rising interest rates can cause investor...

Stat of the Day

Cash as a % of Client Assets, Brokerage Accounts 2018: 10.3% 2017: 11.7% 2016: 14.1% 2015: 12.3% 2014: 13.5% 2013: 14.9% 2012: 18.2% 2011: 19.1% 2010: 24.3% 2009: 25.4% 2008: 12.5% 2007: 10.3% Sources: Charles Schwab, Bloomberg (2) The...

Riddle Me This

Overall, there are 10,929 ratings on stocks in the S&P 500. According to Factset, of these 10,929 ratings: 52.6% are Buy ratings 41.7% are Hold ratings 5.7% are Sell ratings Yet on any given day ~45% of stocks go down in value. Please...

Home Bias

Stat of the Day The S&P 500 has outperformed international stocks over the past five, 10, 15, 20, 25, 30, 35, 40 and 45 years. But such measures can be misleading. Just a data point, not a conclusion! Stay Tuned, Disciplined &...

What To Make of Small Cap Underperformance

Small-cap stocks were the outperformers of the market during the first half of this year. For three months, the group of companies with market caps of less than $2 billion has underperformed large-cap stocks. As you can see in the...

Welcome to the 3rd Quarter

I thought I was done with this theme but then yesterday happened. We have just experienced the largest 2-day move in the volatility index (VIX) in over 5 years. $89 billion That’s how much the collective net worth of the...

Welcome to October - IV

As mentioned yesterday, one issue that may throw a spanner into the works is that fact that this year we will have midterm elections. Since 1950, the Dow Jones Industrial Average index averaged a 3.1% gain in midterm Octobers, with 12...

Welcome to October - III

Chart of the Day Remember, volatility can happen on the upside as well – stay tuned for tomorrow update for some brighter historical facts! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R...

Welcome to October - II

Yesterday I mentioned that the month of October can be volatile for stock investors. What would make me state that? Data! Crashes 1929 1987 Swoons 1978 1979 1989 Global Financial Crisis 2008 Stay Tuned, Disciplined & Patient! {TJM} The...

Welcome to October

This can be a spooky month for equity markets as volatility tends to rise, but history will show it may not be all bad. The 3 best gain days (by percentage) for the S&P 500 in the last 68 years (i.e., dating back to January 1950) all...

The Case for Diversification

Return Quilt As Of 09/30/2018 Thanks BA for the quarterly update! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may...

Fed Dot Plots - Part II

Like I said yesterday, don’t trust the Fed’s Dot Plots. The market doesn’t! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember...

Repatriation of Overseas Profits

According to JP Morgan, repatriation usage is as follows: 49% Debt Redemptions 46% Stock Repurchases 5% CapEx These funds are fungible meaning that the CFO will use them at their discretion based on perceived internal rates of returns....

Fed Dot Plots...

…Please Ignore Why? The Federal Reserve board record of estimating economic activity is – in one word – bad! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Crash Headlines - Whoops!

When Predicting, Predict Often Without A Timeframe Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative...

Bear Markets Abound

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Central Bankers In Action

This is one way to keep your stock market moving higher! In essence the size of the holdings at the Bank of Japan are roughly the size of their entire economy! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Chart of the Day

Another look into divergences amongst global stock markets year-to-date. If you exclude the US, internationsl stock markets would be -1%. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Say What? 2014 Edition

I couldn’t resist adding in the 3D printing investor hysteria as a comparison. Again, time has a way of correcting things! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Say What? 1990's Edition

On the heels of my blog yesterday regarding the meteoric rise of volatility levels and price levels of a select few cannibis stocks, it reminded me of the salad days of the Internet Bubble. It seemed that nearly every day in 1999,...

Say What?

Tilray (a cannabis company w/ $28 million in sales) for a brief moment yesterday had a larger market cap than Best Buy (an electronics retailer w/ $43 billion in sales). At $21 billion, Tilray’s market cap was higher than 48% of...

Global Divergences

In the Chart of the Day, I have been telling clients/prospects/friends/neighbors/anyone who will listen about the massive divergence in global stock market returns this year. After 2017 when it seemed ‘everything worked except...

Thought of the Day

“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to...

Repatriated Funds Update

During the GOP sale of their tax bill, the repatriation of $4 trillion in overseas cash holdings was purported as a major advantage of lowering tax rates. A Wall Street Journal analysis of 108 companies with $2.7 trillion in profits...

Say What?

Cryptocurrency Version 0.5% Bitcoin is on track to consume 0.5% of the world’s electricity this year. The energy footprint for mining cryptocurrencies is doubling every six months. The world’s current bitcoin network uses...

Post Crisis Update

A decade on from the financial crisis, it’s worth taking a second to kick the tires on the global banking system just to make sure it doesn’t go down like that again. And while there’s still more to be done, banks...

10 Year Anniversary

No – my wife and I celebrated 21 years together earlier this month. The anniversary I am referencing is the bankruptcy of Lehman Brothers. Jason Zweig summed the aftermath of the Global Financial Crisis as follows: Good things...

Let's Continue To Play A Game

One very important item (maybe the most important) I left out of the analysis of making the iPhone domestically is PROFITS. That estimate also incorporated maintaining the same profit margins that Apple enjoys by manufacturing these...

Let's Play A Game

Question: How much would an iPhone cost if it all compenents were produced in the US and assembled here as well? Answer: ~$2,000 {This estimate includes the massive specialized technology supply chain movement. labor, parts, etc.} Yes...

Patriot Day

“September 11 impressed upon us that life is a precious gift… And I think we all have a duty to devote at least a small portion of our daily lives to ensuring that neither America nor the world ever forgets September 11...

Quote of the Day

When asked about all of the reports recollecting what happened in the MIDDLE of the Global Financial Crisis, Keith McCullough of Hedgeye Risk Management has this to say: “I think it’s a great time in Macro to be a young...

Why I Try To Be Apolitical - II

Notice I said ‘Try’ as this take practice, just like any other process. Here are more thoughts from Ninad Kunder: Consider Political Bias, which originates out of our political ideology and clouds our reading of the...

Why I Try To Be Apolitical

To try and remove emotions from our investment process. Here is Ninad Kunder: It is amazing that rational people assume that leaders take rational decisions fully aware that they cater to our emotional responses. Our political mind is...

Chart of the Day

Times Change. Businesses Change. Stocks Change. This Will Continue. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may...

Tariffs May Offset Half of Tax Cuts

With the President hinting at the potential for more tariffs this time on Japan, the full effects have yet to be seen. Cornerstone Macro, headed by Nancy Lazar, makes the point that second-order effects could be more significant than...

Go East?

You read that right. Make a U-turn after you were told decades ago to Go West. California — long a destination of people trying to find somewhere to make it on their own — is now seeing an exodus of people who can’t...

Welcome to the Worst Month (Historically) for Stocks

Since 1950, no month sports a lower average return than September, with the S&P 500 Index down 0.47% on average. In the past 20 years, September has been the second-worst month, with only August fairing worse. More recently, over the...

Happy Labor Chart of the Day

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different types of investments...

Being A Value Investor

“When you buy an asset and feel great about it, you are likely to lose money. When you buy an asset and feel a little sick to your stomach, you are likely to make a lot of money.” ~Mark Yusko Year-to-date, non-US stocks...

Quote of the Day

“When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.” ~Dale Carnegie Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Put This On Your Radar

Leveraged Loans While Moody’s may not have do a good job at understanding the credit cycle pre Global Financial Crisis, this piece seems to ryhme with other cautious memos. What are they? The loans have become popular in recent...

Say What?

Warren Buffett vs. Hedge Funds vs. S&P 500 According to Ian Cassel, Warren Buffett’s Berkshire Hathaway compounded at 20.2% per year from 1965-2010. If Berkshire was a 2 & 20 hedge fund it would have returned 13.5% net to...

Whoops - II

Just because an investment sounds good and exclusive doesn’t mean it will be. Some funds founded by Nathan Myhrvold, which raised ~$3 Billion to invest mostly in patents and new innovations, had NEGATIVE IRR of 15% to 24% in last...

Whoops

I have stated ad nauseam about the longevity and liquidity issues with state and local pension plans. Well the Tennessee State Retirement System has felt the emerging markets pain over the past year. At various points they were the...

Quote of the Day

“Courage is not the absence of fear, but the capacity to act despite our fears.” ~John McCain (August 29, 1936 – August 25, 2018) Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Chart of the Day

As I alluded to last week, this historic bull market may be the longest in duration without a recession, but as you can see below it has not been the most robust in history. Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Is The Fed Done Raising Rates?

Not according to the meeting minutes released this past week. And not according to history vs. Unemployment: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Thought of the Day

“Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.” ~Warren Buffett Remember to proactively prepare your mind and your portfolio for volatility. When –...

Longest Bull Market Ever?

In duration without a recession – yes. The bull market turns 3,453 days old today, marking the longest period of uninterrupted gains and no recession in American history. In robustness – no. Nevertheless, here is a cool...

Chart of the Day

With the S&P 500 hitting another new high intra-day, the chart below is a great reminder of why your focus should be on risk management and not capturing every tick higher. Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Plan Accordingly

Despite the recent stock market gains (one of the longest bull markets in history), large public pension plans still face a funding shortfall of $4 trillion because their liabilities are so large, according to Moody’s Investors...

Emerging Markets Feel The Heat

The #1 culprit is the rising US dollar this time. But weakness in this volatile asset class is not unusual – see below: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Thought of the Day

“Nothing so undermines your financial judgment as the sight of your neighbor getting rich.” ~J.P. Morgan Focus on you and what you control – full stop! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character...

We Can Help Answer These Questions

“Being a singer is a natural gift. It means I am using to the highest degree the gift that God gave me to use. I am happy with that.” ~Aretha Franklin Investors need guidance answers Carl Richard’s Big Questions: How...

Stat of the Day

Outlined below is the Average CEO-to-Worker Compensation ratio for the 350 largest firms in the US 2017: 312-to-1 2000: 344-to-1 (PEAK) 1989: 58-to-1 1965: 20-to-1 Source: Economic Policy Institute Stay Tuned, Disciplined & Patient!...

Chart of the Day

Global Divergences Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results. Different...

Quick Trivia

Both Google (GOOG) and Domino’s Pizza (DPZ) went public in the summer of 2004. Which one has outperformed? GOOG = +2,395% DPZ = +4,271% Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

The Terrible T's

Tariffs Trade Trump Tesla Twitter Tiger {As in Tiger Woods} Tidal Wave {As in riding an 80-foot wave!} Turkey Welcome to a quiet summer of trading! Today we will focus on Turkey. Their currency – the Lira – has crashed over...

Buyer Beware - II

Again, not much to add… Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results....

Buyer Beware

Not much else to add… Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future results....

Baseball & Investing

In making investments, I have always believed that you must act with discipline whenever you see something you truly like. To explain this philosophy, Buffett/Munger likes to use a baseball analogy that I find particularly illuminating...

Stoicism & Investing

I may get a bit wonky with today’s entry but there are many similarities to how Stoics modeled their behavior and how investors can work to optimize their underlying strategies. Stoicism is also where my Investor/Character...

Wake Up Call

Need another reason to save for retirement? According to US Chamber of Commerce records, 12% of bankruptcy filings are by those age 65 or older. It may be late for some of you, but its never too late to start/improve the amount you are...

Grading Investment Newsletters

For those of you who maintain seperate trading accounts and subscribe to an investment newsletter, this article from the August AAII Journal should be read. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Visual of the Day

Market History By Market Capitalization Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be indicative of future...

Thought of the Day

“The most important investment ability is an emotional discipline.” ~William Bernstein Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

Thought of the Day

“Individuals who cannot master their emotions are ill-suited to profit from the investment process.” ~Benjamin Graham As I have stated over and over again on these pages, your brain is wired to survive by focusing on danger...

Diversification - Visualized

Diversification is not meant to – and will not – eliminate downside risk. It is an attempt to add lower correlated assets to a portfolio of stocks to smooth returns over a full market cycle. In the chart below, you can see...

Trivia Question

What was the first trillion dollar company by market capitalization? Apple? Nope. Petro China. November 5th, 2017. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Second Half Slowdown

Before you get nervous, please remember that in order to optimize your investment decisions you must optimize your mind. Having an unemotional, apolitical process can help. While we are not forecasting a recession, our data is...

Thought of the Day

Amazon, Apple, Facebook, and Google have a combined market value greater than the GDP of France. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

My Read of GDP Data

It was great, in fact it hit a two year cycle high. However, expect it to start to get “less good” in the coming quarters. As of now both growth and inflation are mapping higher on a year-over-year basis. Thus 2-year US...

The US Is In The Lead

I am sure few of you know but the United States Men’s National Lacrosse team prevailed in the World Championships earlier this month. As you can see from the chart below, we are holding up the best globally. Another intersting...

Chart of the Day

Nothing to see here – move along! This is a chart of Venture Capital (VC) deals. These are deals that you and I are not exposed to and typically revolve around start-ups. As you can see there is a staggering amount of money being...

Sustainable Investing

NOTE: This is not intended to be an investment recommendation, just information I found interesting relating to the topic of responsible investing! Personally and as a firm we are spending more time researching the ESG space. This...

Chinese Stimulus

If this is not a sign of an economic slowdown in the 2nd largest economy in the world I am not sure what is! The chart appended below is a brief outline of the monetary policy actions by the Bank of China to stimulate their economy. No...

Yield Comparisons

As you can see from the chart below it has been some time since the yield on the 2-Year US Treasury note eclipsed that of the S&P 500 dividend yield. This is due to the fact that the Federal Reserve has continued to raise short-term...

Shark Week

After some time on the beach and with the arrival of Shark Week on the Discovery Channel, I thought this story of a 20-foot great white shark named ‘Deep Blue’ and the below chart seemed appropriate: Chart of the Day As you...

Fear An Inverted Yield Curve?

Yes… 9 of the last 9 recessions started with one. But …. The 2-Year to 10-Year US Treasury bonds inverted in Dec 1988, May 1998, and Jan 2006. S&P 500 peaked 19, 22, and 21 months later. It gained +33.2%, +39.6%, and +22...

Your Risk Capacity

What this term really means is what is your capacity to suffer losses. FACT #1: Since 1980, the average annual intra-year drawdown is 14% for the S&P 500. INSIGHT: It has been a few years since this has happened so PLEASE do not...

Historical Returns - VI

Today: 100% Stocks (S&P 500) + 0% Bonds (Barclays Aggregate Bond Index Time Frame: 40 years Average Annual Return = 11.3% Best year (1995) = 37.6% Worst Year (2008) = -37.0% Source: Zacks Investment Management Stay Tuned, Disciplined &...

Historical Returns - V

Today: 80% Stocks (S&P 500) + 20% Bonds (Barclays Aggregate Bond Index) Time Frame: 40 years Average Annual Return = 10.8% Best year (1982) = 33.6% Worst Year (1994) = -29.8% Source: Zacks Investment Management Stay Tuned, Disciplined...

Historical Returns - IV

Today: 60% Stocks (S&P 500) + 40% Bonds (Barclays Aggregate Bond Index) Time Frame: 40 yearsAverage Annual Return = 10.2%Best year (1982) = 29.7%Worst Year (1994) = -22.1%Source: Zacks Investment Management Stay Tuned, Disciplined &...

Historical Returns - III

Today: 40% Stocks (S&P 500) + 60% Bonds (Barclays Aggregate Bond Index) Time Frame: 40 years Avearge Annual Return = 9.4% Best year (1982) = 28.4% Worst Year (1994) = -13.6% Source: Zacks Investment Management Stay Tuned, Disciplined &...

Historical Returns - II

Today: 20% Stocks (S&P 500) + 80% Bonds (Barclays Aggregate Bond Index) Time Frame: 40 years Avearge Annual Return = 8.6% Best year (1982) = 30.6% Worst Year (1994) = -4.6% Source: Zacks Investment Management Stay Tuned, Disciplined &...

Historical Returns - I

Over the next several days, I will augment my normal market update with historical data on returns for various mixes of asset classes. Today: 0% Stocks (S&P 500) + 100 % Bonds (Barclays Aggregate Bond Index) Time Frame: 40 years...

Another Quote I Am Pondering

“America is an idea. Ireland is a great country, but it’s not an idea. Great Britain is a great country, but it’s not an idea. That’s how we see you around the world, as one of the greatest ideas in human...

Quote I Am Pondering

“The best Armour of Old Age is a well spent life preceding it; a Life employed in the Pursuit of useful Knowledge, in honourable Actions and the Practice of Virtue; in which he who labours to improve himself from his Youth, will...

Same As Before

Concentration at the top. That proportion of a handful of stocks leading the market is nothing new, however, according to Ned Davis Research Group Chief U.S. Strategist Ed Clissold: “The top five stocks have often had a higher...

Opportunity Zones

One of the most interesting features of the new tax bill passed in 2017 was the creation an Opportunity Zone. With the decade long bull market, most investors have large capital gains. This program allows them to defer paying taxes for...

2018 Internet Minute

All of this happens each minute of every day globally: 187 million emails 18 million text messages 4.3 million @YouTube videos viewed 3.7 million @google searches 2.4 million @snapchat 971K @facebook logins 481K @twitter messages 266K...

Fact of the Day

YUM Brands (YUM) could triple in value and that would have the same effect on the S&P 500 as Apple (AAPL) gaining 1%. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease...

Vacation

I will be on the beach for a bit, so will the blog! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance may not be indicative of future results....

Why Are US Interest Rates Falling?

A) They are predicting a slowdown in the US economy in the back half of 2018. OR B) S&P 500 companies are contributing to pension plans this year at a pace expected to nearly match 2017’s level, which at $63 billion was the most...

Visual of the Day

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance may not be indicative of future results. Different types of investments involve varying...

Asset Class Mosaic of Returns

Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance may not be indicative of future results. Different types of investments involve varying...

Growth Stocks Drive 1st Half Results

According to a research note from Goldman Sachs: Growth stocks are highly represented among S&P 500’s top 10 return contributors [and] the top 10 stocks have contributed more than 100% of S&P 500’s YTD return....

The View From Fort McHenry

Happy 4th of July! Here is my annual post on the birth of our national anthem. Being a native of Baltimore I thought I would take this July 4th as an opportunity to again provide you with the background on our national anthem: The year...

Perspective

Another Chart(s) of the Day. Start to mentally prepare yourself for the coming bear market. How do I know there will be a bear market? Because there always is. AND there has always been a recovery. So if you need cash in the near-term,...

Chart of the Day

There is no Holy Grail in the markets. Many investors solely focus on dividend paying stocks. While over time they historically outperform over a full market cycle (specifically those that raise their dividends), this does not mean you...

Strange Fact of the Week

Talking head Suzie Orman sold 3 million copies of her book The 9 Steps to Financial Freedom. The world’s leading academic investment publication, The Journal of Finance has a circulation of … 8,000. Stay Tuned, Disciplined...

1 "Damn Paper"

Thursday afternoon, a gunman armed with smoke grenades and a shotgun stormed into the newsroom of my hometown paper, the Capital Gazette in Annapolis, Maryland, shooting five of its employees dead and injuring two others. “I can...

Beware Strategists Bearing...

…200-Day Moving Average Charts Unless you want to churn your account. See the chart below (h/t Josh Brown) and the whipsaw nature of the markets around the 200-Day Moving Average during 2000-2001. In general, this is one of many...

Value Underperforms

As a follow-up to a recent Market Morsels note on Growth Over Value, here is my Chart of the Day showing how just how much and how long value stocks have underperformed. Reversion to the mean is an iron law of investing so this is...

Thoughts of the Day

Risk Management: Isn’t about avoiding risks, it’s about understanding risk and potential downside. Cost: A focus on cost (which is an item you can control) should be about value delivered, not absolute price. Stay Tuned,...

Friendly Reminder

Yes Virginia the stock market in the US can go down. We saw a broad sell-off yesterday, although if you have been carefully following my blogs this weakness has been an issue for most of this year for countries like China (-20% since...

Market Explanation

While in all honesty I have – and neither does anyone else – an idea of what the market is going to do today, I can give you historical data, but no one really knows. In conversations I am often asked what is moving the...

Buybacks Backstop The Markets...

…For Now! JPMorgan’s Nikolaos Panigirtzoglou was out with the latest version of the bank’s popular “Flows And Liquidity” series last week and touched upon foreign profit repatriation and share repurchases...

Adapt or Perish

In this Chart of the Day provided by Vala Afshar, these companies disrupted old line operaters with answering the question, “What problem can I solve for my customer with innovation and creativity?” Stay Tuned, Disciplined...

Market Morsels

Growth vs. Value Over the past 10 years, the S&P 500 Value Index of companies selling at low prices relative to their earnings, revenues and net worth has returned an average of 7.1% annually. The S&P 500 Growth Index — stocks...

Summer - Finally!

As the US had the highest level of snow cover for April in history, I fully welcome hazy, hot and humid! And with the S&P up over 3% as we hit summer, I would welcome historical returns. Now, many markets are not doing well (think...

All Is Not Well

Specifically in Emerging Markets and Europe. The below results clearly dispell the Wall Street myth of a Synchronized Global Recovery: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Manager Underperformance - II

Morningstar has recently released a new white paper on manager underperformance. In short, even the best managers will go through period of underperformance. I know, I already told you that: here, here and here or search my blog for...

Manager Underperformance

This is a topic that will always be discussed as long as active management is utilized. The question I always ask is: Do investors have the capacity and discipline to stick with their investment strategy over time? Why do I bring it up...

Lord William Spiro of Maple

Happy Father’s Day I want all of you to have a little fun this Sunday morning. A few weeks ago my wife and I enjoyed waching the Royal Wedding. Leave it to the internet to create a fun game to play called: My Royal Wedding Name...

Let's Go France

Play has begun in earnest and this weekend my son and I will be watching the World Cup group stage matches and attending his soccer tournament. Appended below is a cool chart on market rates of return when certain countries win. Vive...

We Are Addicted

After posting a few highlights from Mary Meeker’s Internet Trends report, I keep coming back to this chart. US adults now spend 5.9 hours a day on-line. This will soon overtake sleep. And it doesn’t register today’s...

Don't Forget Vancouver

After posting a note on San Francisco real estate, here is a $1 million gem in downtown Vancouver: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past...

Market Morsels

Chart of the Day New Government? No Worries. Total Number of Governments Since 1945 Just The Facts The State of New Jersey It is the worst-funded public pension of any U.S. state, the second-lowest credit rating, lagging economic...

Hello Flyover States

It has been an adventurous few days as my hard drive decided to stop working and I am now getting back on track so expect a flurry of posts. Pictured below is a beautiful 6,350 square foot home in San Fransisco. 2219 Stock Street Any...

Active vs. Passive - Large Caps

We continue on the example through the same lense to analyze Large Caps. Here is an example from Fuller & Thaler Asset Management: Asset Class: Large Caps Time Period: 20 Years Ending September 30,2016 Measure: Percent of 3-Year...

Active vs. Passive - Small Caps

How about both? The debate rages on as to your school of thought: buy and index and set it and forget it to obtain the average return of the index or allocate capital to active managers that are trying to outperform the index. We say,...

Busy Chart of the Day

These are the largest 25 companies by market capitalization starting in 1927. The yellow highlights the top 25 or their offspring. Follow the yellow brick road! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Invest Like A Business Owner

All too often investor look at investments as just a piece of paper. If you are a TRADER, this is a fair assessment. A means to an end. If you are an INVESTOR you should alter your mindset. If you are looking to allocate long-term...

Mary Meeker's Internet Trends Report

Her much anticipated annual report was released last week. In came in at 294 slides and is chock full of data. If you are so inclined here is the video of her presentation. Don’t fret I parsed some highlights and insights for...

Operation Overlord

D-Day. June 6, 1944. The Eyes of the World Are Upon You General Dwight D. Eisenhower's 'Letter In-Case of Failure' It reads: “Our landings in the Cherbourg-Havre area have failed to gain a satisfactory foothold and I have...

Perspective: The Federal Reserve Balance Sheet - II

Charts of the Day Quantitative Tightening (QT) Has led to a rise in interest rates via the 10-Year US Treasury bond: It is not just QT in the US but globally: So what does this mean? With the rapid expansion in private sector leverage...

Didn't We Learn

I saw a fascintating article on Bloomberg BusinessWeek recently that detailed how subprime mortgages are being originated and backed by the government. Getting Rich on Government-Back Mortgages Yup you read that right. Check out his...

This Is Funny

Chart of the Day How many times have you turned on financial news media and heard the following phrase: The Easy Money Has Been Made If your financial advice is free – you get what you pay for! Stay Tuned, Disciplined & Patient!...

Perspective: The Federal Reserve Balance Sheet

Charts of the Day I have opined the this week on the Federal Reserve and their actions regarding future interest rate moves and Quantitative Tightening (QT): Wall of Maturities, Emerging Market Currency Crisis and A Thought Experiment....

Thought Experiment

While your thoughts this Friday morning may be turning to the weekend (or a two day soccer tournament in the rain), I want to offer some data to chew on. There was a formula developed by Larry Jeddeloh at TIS Group to attempt to gauge...

Emerging Market Currency Crisis

An update: The recent turbulence in emerging markets (EM) has so far prompted a pause on rate cuts from Brazil, triggered the first rate hike since 2014 from Bank Indonesia, prompted multiple dramatic rate hikes from Argentina’s...

Junk Bond Ratings Surge

Since 2009, the level of global nonfinancial companies rated as speculative, or junk, has surged by 58%, to the highest level ever. With 40% rated B1 or lower, the point that Moody’s considers “highly speculative,” as...

Wall of Maturities

Chart of the Day While many corporate balance sheets are solid thanks to low interest rates and a nine year growth spurt, there is a ‘mountain’ of bonds maturing over the next 10 years. This is yet another factor that the...

Memorial Day

On what is now a tradition on my blog, Memorial Day is a time to reflect on the brave men and women who sacrificed the ultimate gift – life – to protect our freedoms. This is the story of Travis Manion and Brendan Looney....

Quotes of the Day

The Vatican released a 15-page document attacking global capitalism, calling for greater regulation of the financial system: “The spread of [credit default swaps] without proper limits has encouraged the growth of a finance of...

What Is Behavioral Finance

I wanted to refresh my Investor Character Equation of Stimulus + Reaction = Outcome with some research from The Behavioral Edge by Fuller & Thaler. Traditional finance and investing techniques are based on one key variable: that...

Howard Marks On...

Ego. From his book The Most Important Thing: The sixth key influence is ego. It can be enormously challenging to remain objective and calculating in the face of facts like these: Investment results are evaluated and compared in the...

Adapt or Perish - II

Ironically, AEI put together this list on the heels of my Netflix vs. Blockbuster post. Only 53 US companies have been on the Fortune 500 since 1955, thanks to the creative destruction that fuels economic prosperity. Stay Tuned,...

Adapt or Perish

Blockbuster vs. Netflix Today in market history, 2002: Netflix raises $82.5 million in its initial public offering, with a total valuation of $300 million. Blockbuster Video had raked in about $800 million in late fees that same year....

Market Musings

The Fed Is On The Wall I don’t know if you’ve seen this but Atlanta Fed President Raphael Bostic has just walked back some of the hawkish rhetoric from the Fed. Bloomberg quoted him last week as saying, “I have had...

ETF Investors: Don't Do It Wrong

This past issue of Barron’s had an interesting article on the Father of Index Investing, Jack Bogle. While the creation of index funds revolutionized the capital allocation process, there is a difference in how to effectively...

China's Citizen Score

The details of this program sound more like a Sci-Fi movie than real life! Here is the headline: China Turns to Tech to Monitor, Shame, Rate Citizens By 2020, China plans to give all of its 1.4 billion citizens a personal score, based...

More Daunting Numbers

Sorry to put a damper on your Saturday – actually more of a damper if you live in the northeast with the amout of rain we have had this week. However, after my updates on the need for saving more and the looming retirement crisis...

The Looming Retirement Crisis - In Numbers

On the heels of my Chart of the Day yesterday, I wanted to drive home the point of why it is so important to save. This is something that is firmly within your control. unlike the short-term movements of stocks, bonds and commodities....

It's Not Too Late

Today in market history, 1792: The Buttonwood Agreement is signed, forming the New York Stock & Exchange Board. I saw this neat chart in a recent Fidelity presentation on retirement and saving. While it makes sense to start saving and...

Say What

Borrowers in the U.S. are defaulting on subprime auto loans at a higher rate than during the financial crisis, according to Fitch Ratings. Lenders are responding by pulling back on financing to applicants with shaky credit histories...

Not Again

I had to do a double take when reading this story in The Wall Street Journal. Residential Transition Loans Borrowers of residential transitional loans—or flip loans, as they are better known—use the money to buy a property,...

Culture Wins

This is not a buy or sell recommendation just a prime example of how culture wins not only on the field of play but in business. Costco pays incredibly good wages relative to competitors. Costco pays employees an average of 72% more...

$2.2 Billion

David Tepper Expected To Buy The Carolina Panthers Of The NFL For An Unprecedented $2.2 Billion As a hedge fund manager he know about the Investor Charater Equation | S + R = O “If I go through my career, there’s a lot of...

Thought of the Day

Think about this for a few moments: 7 out of 10 children entering elementary schools today will have jobs that don’t exist today. Here are some jobs invented just in last 10 years: App developer (This is not a short-order cook)...

That Escalated Quickly

According to data from the Federal Reserve, the total amount of student debt in the United States is now $1.5 trillion. That’s more than the estimated $1.3 trillion in direct costs that the government spent fighting the War in...

Chart of the Day

Appended below is an interesting chart of historical stock market performace during and after mid-term elections – courtesy of Liz Ann Sonders. As you can see the average drawdown is 17%. This compares to an average drawdown of...

Buffett & Munger Thoughts of the Day

On Learning “Any place you can find somebody that gives you insights into things you didn’t understand before—and maybe makes you a better person than you would have been before—that’s very lucky and you...

Buffett Q&A - II

This time he answers questions on CNBC post-shareholder meeting with additional details: On the market: Stocks aren’t in a bubble now. Though said some private deal valuations are getting high and it’s harder to find...

Buffett Q&A - I

I wanted to save you 8 hours and highlight a few of Warren Buffett’s answers during the annual Berkshire Hathaway Annual Meeting: On Bitcoin: “It’s probably rat poison squared.” On the tax cuts: “It is...

The Buffett Barometer

On the heels of the pilgramage to Omaha, NE for the Berkshire Hathaway Annual Meeting this past weekend, I found it interesting that the this metric received little fan fare during Warren Buffett’s (age 87) 8 hours of Q&A with...

The 2018 Berkshire Hathaway Annual Shareholder Meeting

If you would like to follow along, you can view the livestream in real time. The event kick-off this morning at 9:45 AM EST. Enjoy! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Chart of the Day

The montly Non-Farm Payroll report was released today. While this is always a big headliner in the financial markets, it is reporting on the past month and does not give an indication of future employment trends. However, it is hard to...

2nd Longest Recovery

With the calendar turning to May, the economic expansion officially hit 107 months. This ranks as the 2nd longest expansion since WWII: May ’91 – 120 months June ’09 (current) – 107 months Feb ’61 –...

The List

Yes there is some ‘click-bait’ in this but after reading the story I thought I would share. Legendary investment banker Richard Jenrette passed away last week. At his office within his desk they found his List. What I...

May Day

Spring – you are welcome to arrive at any time! Historically, May stock market returns are mixed to positive. The average positive S&P 500 Midterm May has been up +3.3%. However, the average negative S&P 500 Midterm May has been...

Why Alternatives Are Important - III

Why Protect The Downside? MATH! One way to potentially execute downside protection – outside of cash? Long/Short equity strategies. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Don't Forget: 401(k) Consolidation

It is unbelievable but Americans lost track of more than $7.7 billion in retirement savings in 2015, according to the National Association of Unclaimed Property Administrators (NAUPA). If you have lost track of old 401(k) or other...

Chart of the Day

Inflation or Deflation Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance may not be indicative of future results. Different types of investments...

Market Morsels

77% According to FactSet, 77% of S&P 500 companies reported actual sales above estimated sales for Q4 2017—the highest percentage since FactSet began tracking this data in 2008. 88% 88% of the companies on the Fortune 500 list in...

The One Metric To Watch...

…To Determine The Next Recession No I am not referring to an inverted yield curve – although that is one. Researchers at Notre Dame have found another: fertility rates. “Many papers show that aggregate fertility is...

Why Alternatives Are Important - II

And not just as a hedge against rising interest rates, but also against stock gyrations. For today’s note we are going to focus on how hedge funds perform versus stocks during periods of sustained Fed tightening, like the one we...

Signal or Noise?

You know my thoughts on forecasting – it’s hard and rarely useful. Below is a chart from the Atlanta Fed outlining their predictions of GDP. In the span of two months they have gone from 5.4% to 2%. This is what I call...

Why Alternatives Are Important

And not just as a hedge against declining stock prices, but also rising interest rates. For today’s note we are going to focus on how hedge funds perform versus bonds during periods of sustained Fed tightening, like the one we...

Please Recylce

Earth Day turned 48 on Sunday, April 22. Senator Gaylord Nelson (D-WI) founded Earth Day in 1970. His hope was to make the environment a political issue in an era when US rivers caught on fire and thick smog choked cities. One of the...

Prepare For Normalized Volatility

While the domestic stock markets have levitated higher over the past few weeks, I am here to remind you that we appear to be BACK in a more normalized regime for volatility. What does that mean you ask? Since 1930, US stocks have...

Jeff Bezos Annual Letter

Here is the 2017 Amazon shareholder letter for your weekend consumption. “High standards are contagious…The opposite is also true.” People are mirrors of their environments. Culture is an invisible force that is...

Be Skeptical

Be Very Skeptical…of CEO’s and managment teams telling you they know the future. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance...

Nothing To See Here...

…Move Along Do you think the nations infrastructure needs repairs? Spectrum News NY1 ✔@NY1 More subway waterfalls. This was one commuter's view when the subway doors opened at 42nd Street-Bryant Park. (Video courtesy @BretHyde)...

Tax Tip

Happy Tax Day!?!? By the way…the IRS does not accept checks over $100 million FYI! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O DisclosurePlease remember that past performance may...

Say What?

With the US Postal Service in the news as President Trump takes aim, I can’t believe this law was ever passed: Just another jobs program. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R =...

Beware of Concentrated Performance

In my latest post I referenced the concentrated nature of the return stream of domestic equities. While it is nice to have exposure to these names, as you can imagine it typically does not end well. As of the end of February 2018, the...

FAAMG Stat Pack

It paid to hold these stocks for the last few years! As a reminder: Facebook Apple Amazon Microsoft Google All data through 03/31/2018 FAAMG Returns YTD = 4.1% S&P 500 Returns YTD = -0.8% S&P 500 Excluding FAAMG’s YTD = -1.4%...

"Houston, we have a problem."

On this day in 1970 those words were spoken from Apollo 13. “New Jersey, we have a problem.” If our current politicians have any say, those words will never be uttered by them. It will be kicked to someone else to deal with...

Volatility Study

According to PGIM, you should: Stick To Your Allocation During Times of Volatility. I have been telling you that, but they have some data! PGIM evaluated a 68-year time period with 26 volatility spikes and 25 post-peak events....

Chart of the Day

Below you will see that 108 consecutive months of global central bank easing has come to an end. This chart provided by Liz Ann Sonders outlines the fact that financial conditions are tightening across the globe. The issue to watch...

Jamie Dimon Tells The Truth

Later in his letter, Dimon admits that the US is facing some serious economic headwinds today. For one, he’s concerned the unwinding of quantitative easing (QE) could have unintended consequences on the economy. Remember- QE was...

Jamie Dimon Channels His Inner Politician

But first here is an awesome video of a Noelle Lambert, a women’s lacrosse player from UMass-Lowell scoring her first goal of the season after lossing a leg in a moped accident in 2016. Awesome! To continue on my comments...

Masters In Investing

After Friday’s 2% sell-off, I wanted to highlight two masters and their thoughts on volatility: “As long as the odds are in our favor and we’re not risking the whole company on one throw of the dice or anything close...

Jamie Dimon's Annual Letter

Along with Warren Buffett and the investment managers we utilize for clients, Jamie Dimon’s annual letter to JP Morgan shareholders is a must read for me. He is an excellent writer and opines on broad topics from his perch atop...

Diversification Quilt

Asset Class returns updated through March 31, 2018 I challange you to review and find a pattern that you can invest in now to capitalize on what asset class will be at the top next quarter. One interesting stat is the MSCI Emerging...

Welcome To The Masters

I thought when the Masters started it was the real start of spring? I guess Mother Nature didn’t get the memo this year. The Masters at Augusta is a perfect segway to the Golden Bear and my S+R=O Investor Equation: “Success...

Volatility Charts of the Day

Thus far this year, the Dow Jones Industrial Average has had 11 sessions when it rose by at least 1%, including Monday, in addition to another 13 where it fell by at least that much, counting Tuesday. While swings of that magnitude are...

Volatility Primer

Below are exerpts from the blog Safal Niveshak and in just two paragraphs he outlines to a client the NEED for volatility: “If you study Nassim Taleb, markets are organic and complex systems, not machines to be fixed. And by...

Welcome To April

Easter Monday Money Fact: Americans spend about $2.4 billion strictly on Easter candy. I ate my fair share of any sort of chocolate/peanut butter combo over the weekend! According to the Stock Trader’s Almanac, April has...

Not An April Fools

It’s a bird. It’s a plane. It’s an uncontrollable international Chineses space station. A 9.4-ton Chinese space station will soon begin falling to Earth and New Jersey is part of a swath of the planet where debris...

Bonds & Stocks Can Go Down

The first quarter of 2018 had a negative total return for both the S&P 500 and Barclays US Aggregate. This is the first time since the 3rd quarter of 2008. And only the 8th time in the last 30 years. Stay Tuned, Disciplined & Patient!...

Fact of the Day

A new volatilite regime is upon us. Here is the proof: For the S&P 500, the 1st quarter of 2018 will finish with at least five -2% days (no matter what happens today). Since 1985, there have only been 4 other years with at least five...

Thought of the Day

After yesterday massive intraday swing and on the heels of a few manic months, it appears we are in a new risk regime. Meaning we will be locked in a battle of major market swings both high and low, which will lead to a grinding out of...

Antitrust The Process

Caveat: This is not a recommendation to buy or sell any individual securities mentioned below. Sometimes I am just not sure what our government is thinking. The latest example is the blocking of the AT&T and Time Warner merger. While...

Control The Contollables

Thought of the Day There are few things an investor can control and the movement of the markets certainly are not one of them. This is why my concept of the Investor & Character Equation applies to all facets of life, especially...

Visual of the Day

Yes another chart, but this one fits squarely into my S+R=O equation. They outline Cognitive Biases that can be mapped over to investing. I will go out on a limb and say virtually ever investor suffers from many of these. One of the...

Visual of the Day

I absolutely love the daily e-mails I get from Visual Capitalist. They range in subject matter from OBOR (China’s Most Ambitious Megaprojecy) to Autonomous Vehicles. Today’s visual is a crash course on personal finance....

Bond Thoughts - V

One of the latest Wall Street gimmicks was that unconstrained, flexible bond funds would allow you to maintain exposure to bonds, provided diversification with bond-like returns without the worry of higher interest rates. Exactly...

A Realistic FOMC Chair?

It has only been one press conference but it appears the new Chairman of the Federal Reserve, Jay Powell may be a bit more realistic and straight forward than his predecessors. First, his press conference actually ended 15 minutes...

Bond Thoughts - IV

Another risk to investing in bonds is reaching for yield. This is something investors have struggled with since interest rates were slashed to zero a decade ago. While it is nice to pick-up additional income, it does come with risk....

Bond Thoughts - III

Tomorrow the Federal Reserve will most likely raise interest rates by 0.25% as it continues to tighten monetary conditions. This will be the sixth rate increase since the Fed lowered rates to zero during the Global Financial Crisis....

That's It?!?!

Elizabeth Holmes, the CEO and founder of “game-changing blood testing company” Theranos, has seen her profile and company implode. She, along with the former president and the company itself, has been charged by the SEC for...

Planning Thought of the Day

Helping a young person fund an IRA—especially a Roth IRA—can be a great way to give them a head start on saving for retirement. This is mainly due to the power of compounding over a longer the timeline and taking advantage...