This Is Crazy - V

Thought of the Day “There is scarcely an instance of a man who has made a fortune by speculation and kept it.” ~Andrew Carnegie Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

This Is Crazy - IV

In the Chart of the Day, I continue with the retail trading and speculation that has taken the place of sports betting during this market rally. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R =...

This Is Crazy - III

Bankrupt Hertz Wants to Sell Up to $1 Billion in New Shares Bankrupt Hertz is now trying to put in place a $1 billion at-the-market equity offering to sell its WORTHLESS stock to investors bagholders to enhance recovery for lenders....

This Is Crazy - II

From a recent Wall Street Journal article: Dave Portnoy, founder of Barstool Sports, has turned to day trading. “Stocks only go up, this is the easiest game I’ve been part of!” he said in a video on June 4th, with...

This Is Crazy

Should we tell these retail traders that when FAANG is a acronym of several leading technology stocks not Fangdd Network Group (DUO) a Chinese real estate firm that was up 389% yesterday. Whoever bought the stock at that price is now...

Something Is Wrong With This

At the end of trading yesterday there were 141,973 accounts on the Robinhood stock trading app holding Hertz (HTZ) that has filed for bankruptcy protection. Yet the stock is up over 650% since that announcement. The Robinhood User...

Good Job Britain

In the Chart of the Day, Britain has gone a record two months without burning coal, the longest the dirtiest fossil fuel hasn’t been used for power since the start of the Industrial Revolution. For those history buffs, I am sure...

Tracking State Fiscal Health

A report from researchers at Arizona State and Old Dominion universities found that tax collections will fall by more than 30% in at least 10 American states due to Covid-19. On average, states will suffer a 20% decline in tax revenue....

How Robinhood Makes Money

The Robinhood app has allowed investors traders to buy and sell stocks and options for no commission off of their easy-to-use client application. Well you have to make money somehow. Robinhood sells their order flow to outside services...

Tracking Small Cap Stock Profitability

Not quite a record number of profit-less small cap companies but still a discouraging data point. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

Tracking Global Valuations

Hint: The US is the MOST Expensive Stock Market in the World Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may not be...

Tracking Small Cap Valuation

Hint: Most Expensive Ever Although this is based on forward estimates which can be unpredictable, especially this year! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Tracking FAAAM

A main theme this year is growing divergences: whether between high and low-income families or stronger and weaker companies. In stocks, this translates as a 16% gain for Facebook, Apple, Amazon, Alphabet and Microsoft versus a 12%...

Tracking June Historical Returns

While history doesn’t repeat it rhymes. However, this is 2020 so who knows! Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Tracking Price Targets

% of Stocks Trading > Average Analyst Price Target via Strategas 2020: 61% 2019: 26% 2018: 19% 2017: 29% 2016: 28% 2015: 25% 2014: 35% 2013: 39% 2012: 18% 2011: 21% 2010: 39% 2009: 46% 2008: 22% 2007: 30% 2006: 32% 2005: 30% 2004:...

Fact of the Day

During the 1987 “Portfolio Insurance” Crash: “S&P futures lost 28% on 19-Oct-1987 [Friday close of 281.50 to Monday’s close of 203]. That day, 2210 trades were reported to the tape – today, that number...

Tracking Corporate Debt Markets

Hint: Liquidity Can’t Overcome Insolvency The S&P downgrade/upgrade ratio on levered loans hit 43.2! That’s not a percentage. That’s 43.2 downgrades for 1 upgrade. The peak during eh Global Financial Crisis of 2008...

Tweet of the Day

“We’re only down 15% from the all-time high of February 19, and it seems to me that the world is more than 15% screwed up.” ~Howard Marks Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Tracking the Bank of Japan

According to the latest research from Deutsche Bank, the Bank of Japan owns almost 80% of all ETFs domiciled in Japan. Is the US Federal Reserve heading in this direction? Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

Tracking China

Now this is on the heels of China removing their guidance for GDP – even though much of the world knows they make up the numbers. The below heatmap of the real-time Chinese economy actually shows some green shoots. However, we...

Say What?

As of a few weeks ago the Federal Reserve started buying bond exchange traded funds (ETF’s). They Fed >$3 billion in these bond ETFs listed below in May. The junk bond ETF holdings (JNK) are in such companies as Hertz, JC...

Tracking FAAANM

As you can see stock market leadership and performance has been been focused on six stocks over the last five years: Facebook Apple Alphabet Amazon Netflix Microsoft Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character...

Say What?

Talk about making money while you sleep. Since the end of March of this year, you would have made dramatically more money if you bought at the close and sold at the open the next day. If you go back 27 years it is virtually the same...

The Federal Reserve Can't...

…Do the following: Provide solvency for consumers and businesses Provide demand for goods and services Print jobs Print cash flows Yes they can provide liquidity and massive amounts, but there is a limit to what they can do. And...

Tracking The Fed's Balance Sheet

Unprecedented Policy Support Over the past two months, the Federal Reserve’s metamorphosis from the traditional and passive ‘lender of last resort to today’s central planning leviathan has been on full display. Stay...

Sustainability Stories

Yesterday, scientists published a study showing that daily global greenhouse gas emissions dropped by 17% between January and April. The sharp decrease was linked to the pandemic’s stay-at-home orders, which have forced millions...

Tracking Earnings Estimates - II

“All but one of the seven postwar recessionary bear markets have seen double-digit declines in S&P 500 Trailing Twelve Months (TTM) EPS from their respective cycle peaks to their respective bear market trough dates.”...

Tracking Earnings Estimates

Hint: Cliff => Mountain First quarter earnings were just reported and it showed a loss of ~ 8%. This is only incorporating two-three weeks of COVID-19 shutdowns. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character...

Tracking Retail Sales - II

The Hedgeye Cartoon of the Day 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 of...

Tracking Retail Sales

Hint: Cliff Diving! 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...

Tracking FAAAM

These are: Facebook Amazon Apple Alphabet Microsoft The Big 5 (FAAAM) make up well over 40% of NASDAQ (QQQ) and over 20% of S&P 500 (SPY). The rest of the US stock universe, including the equal-weight S&P 500, has sagged YTD while...

Tracking Divergences

Within Income & Wealth In The US Income Growth Wealth Accumulation Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance may...

Tracking Divergences

Between the S&P 500 Prices and the S&P 500 Earnings Estimates. Either Earnings Estimates are about to spike or the S&P 500 is about to pike. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Tracking Traffic

In Europe: Flat-Lined, Except For Berlin In the US: An Uptick Off All-Time Lows Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Tracking The V-Shaped Recovery

Hint: We need a new letter. While it is still earlier and only a few states are slowly relaxing stay-at-home mandates, it will take time to get back to pre-Covid-19 levels. The Chart of the Day looks to three states and the Open Table...

Tracking Gym Set-Ups

Tracking IPO's

Hint: Falling Off A Cliff In a report by Renaissance Capital, they noted the 2020 US IPO market just experienced its slowest March and April in nearly a decade, “as volatility essentially shut the IPO window.” It said only...

Say What?

This is not a recommendation to buy or sell any of the securities listed just a Fun Fact Friday: Tesla has a market capitalization of $145 Billion. The following companies have a combined market cap of $150 Billion: VW Group...

Tracking Central Bank Balance Sheets

It appears that similar to previous surges in the size of global central bank balance sheets, central banks have the backs of stock investors – again! The Great Wealth Transfer continues! Stay Tuned, Disciplined & Patient! {TJM}...

Tracking Service Employment

Hint: Worst Month-over-Month Decline Ever Recorded No wonder there is ~$841 BILLION in mortgage loans in foreberance. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Tracking Earnings Estimates

ACTUAL EARNINGS The US is catching up to the rest of the world. So far this quarter, EPS for S&P 500 companies is -8.9% with 60% of companies reported. But remember, COVID-19 really only effected the last 2-4 weeks of the quarter....

Tracking (Dis)Inflation

It appears – if history is a guide – we are set for a period of deflation. As you can see in the Chart of the Day, Core CPI usually tracks US Real GDP with a six month lag. If that trend holds, we should see Core CPI...

Tracking Mobility Trends

Hint: Less Bad As you can see in New York City both Driving and Walking are improving. However, Transit across the board continues to languish. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R =...

Tracking Live Sports

This latest Sports Illustrated cover 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...

Tracking Fed Bond Buying

The Federal Reserve bought more Treasury securities in the past 6 WEEKS than the whole foreign sector bought in the past 6 YEARS. They have purchased a total of $2 Trillion since January. Stay Tuned, Disciplined & Patient! {TJM} The...

Tracking (Un)Employment

Hint: Terrible On the heels of my earlier note on perverse incentives regarding the CARES Act and supplemental jobless benefits, we get the usual Thursday morning update on initial jobless claims. There are 30 million people –...

Perverse Incentives In Action

The CARES Act has disincentivized employees from going back to work. With the enhanced unemployment benefits of an additional $600 per week as part of the CARES Act on top of standard weekly unemployment benefits creates a run-rate of...

Tracking Capital Expenditures

Hint: No V-Shaped Recovery Predicted If company managements thought COVID-19 was temporary and were they confident in future revenue streams coming back immediately, secondary effects such as Planned CapEx would not still be falling...

Tracking Gasoline Demand

Again Hint: As you can imagine. Research says that in just over three weeks the world will run out of space to store oil at this pace of production. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S +...

Not Again

Robinhood account users are at it again. This time buying oil. The pink line is the price and the green line are the number of Robinhood app users holding USO. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Cartoon of the Day

Sisyphus & Ground Hog 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....

Tracking The Recovery

Hint: No “V-Shaped” Recovery In this new normal it will take time to acclimate to this environment. Yes this is a poll and could be skewed but ask yourself these questions. Reopening the economy is just the start and you...

Tracking (Un)Employment

Hint: Still Historic After today’s Initial Jobless Claims report, total employment is back to 1998 levels. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Earth Day

Today marks the 50th anniversary of Earth Day. With that, here are some stats on those ubiquitous plastic store bags. Plastic bags start out as fossil fuels and end up as deadly waste in landfills and the ocean. Birds often mistake...

Tracking Travel

Hint: Major Declines Across The Globe A survey by IATA in April shows that 60% of passengers will be willing to travel 1 to 2 months after the lock down while 40% will delay travelling by 6 months or more. One benefit of the lock down...

Concentrated At The Top

Another Record As you can see from the Chart of the Day, the Top 5 companies in the S&P 500 have NEVER accounted for this much of the index. Just like income inequality, we are seeing FAAAM (Facebook, Apple, Amazon, Alphabet &...

Say What?

Disney Edition Last week Disney announced they will stop paying 100,000 workers, roughly half its workforce. This will save the company $500 million a month. However, they will also take actions to protect executive bonus schemes and...

Say What?

Shake Shak Edition The Small Business Association’s (SBA) Paycheck Protection Program (PPP) that was part of the CARES Act was intended for “small businesses” not publicly traded companies like that already have...

Tracking (Un)employment

Hint: See cartoon appended below. Here are the numbers: Total jobs created since Great Recession: 22,088,000. In one month, 10 years of job creation wiped out…as ~21,500,000 Americans have filed for first time unemployment...

Tracking Gasoline Demand

Hint: As expected since I personally haven’t driven my car more than a few miles in the last four plus weeks. Per the EIA, US fuel demand falls to LOWEST LEVEL EVER in weekly data. Stay Tuned, Disciplined & Patient! {TJM} The...

Tracking Economic Reality

Hint: Not improving. According to Jurrien Timmer of Fidelity, the market seems to be in a state of suspended animation, with price moving in the opposite direction from fundamentals. Economic data and earnings are in free fall, but the...

Tracking Vacation Rentals

Hint: Not good: 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...

Tracking Restaurant Traffic

Hint: As expected: 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...

Tracking Earnings

Hint: Not Good. Hint #2: Earnings were slowing before COVID-19 began wreaking its cataclysmic havoc. According to Bloomberg: 36% of companies in the Russell 2000 had negative pre-tax income. 27% of S&P 500 companies with a market cap...

Tracking Spending

Hint: Not Good! Second Hint: It was tracking down 25% prior to California issuing the countries first stay-at-home order on March 19th. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Funny...Not Funny

I will just leave you with the 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...

Volatility Rules The Day

Volatility records are being SHATTERED: 22 days in the past 7 weeks have seen the S&P move more than +/- 3%. The previous records were – not surprising – in October 1932 and November 2008. In those 2 cases, the S&P staged...

Jobs Update

While there is a rally in the stock markets, it is not because of the current jobs situation. As you can see in the Chart of the Day, in just two weeks, ~47% of the job gains created during the record employment expansion are gone....

Say What?

Boeing announced today that it is restructuring its workforce by offering voluntary layoffs, early retirement packages and cutting jobs. Of course this is COVID-19 related; however, this is also after Boeing: Gave the CEO it fired over...

Tracking Restaurant Traffic Pre-COVID-19

Hint: Slowing before the official shutdown. OpenTable bookings had declined 70% before restaurant closures. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

The Truth

To paraphrase an old Wall Street saying: I’ve never bought at the exact low or sold at the exact high, unless it was by accident. Anyone who claims the ability to do so is either a liar or very lucky. Just like I advise with CNBC...

Credit Card Rates

Consumers are paying higher credit card interest than they were 20 years ago despite rates being pancaked back to 0% by the Fed. They have to make money as cross-border transactions and volumes have cratered globally over the past six...

Say What?

According to a Bloomberg article, Whiting Petroleum Corp.’s board approved $14.6 million in cash bonuses for top executives days before the shale oil producer filed for bankruptcy. But the executives agreed to forgo equity...

Many Superlatives

I am glad March and the first quarter are behind us. We just ended the worst quarter since 2008 and the worst 1st quarter in the history of the markets. We experienced the fastest and largest decline into a bear market from all-time...

No Cushion

In my most recent blog I mentioned the rush for cash by US corporations. Well it is not so easy for small business owners. According to Womply and AARP, 55% of small businesses could not survive a 3 month shutdown of the economy. This...

Rush For Cash

It is no surprise that large corporations have been rushing to husband any sources of cash due to the global economic shutdown. Since this is an unprecedented situation it is difficult to model outcomes. Therefore, companies are...

Bad Analogy

“It feels like strapping on a flak jacket and jumping on hand grenades going off every day,” said the head of one US hedge fund. “And it feels like I’ve lost some body parts.” STOP This was the recurring...

Beware of...

…Bear Market Bounces – II This Chart of the Day shows previous bear markets and the largest bear market bounces within each: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Beware of...

…Bear Market Bounces Bear markets are often punctuated with short and sharp bounces higher before resuming their trend lower. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT...

Contra Indicators

I hope but not likely. The Economist ran two covers near the all-time high and then near the current lows. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Uh Oh

Negative yields land on US shores for just the second time ever (2015) in a massive flight to quality assets. Even with the second consecutive day of positive gains (first time since early February), the 1- and 3-month US Treasury...

A Record Day

On Tuesday the S&P 500 +9.4% making it one of the Top 10 best days ever. However, most best days come along side the largest down days in a phenomenon called volatility clustering. This is not necessarily the sign of a bottom as you...

Wake Up Congress

As the Fed holds their 3rd Emergency Meeting and announces a slew of new programs to alleviate stress in the bond markets, Congress is doing what it does best. Here are two pictures of the current situation: The first chart is the...

60/40 Update

You know its bad when a basic 60/40 portfolio is in a bear market in less than one month. The Vanguard Balanced Index Fund (VBIAX) is a 60% Stock and 40% Bond mutual fund. Since February 20th to Friday March 20th it is -21.69%! Stay...

Say What? - Part II

As a follow-up to my entry from yesterday, here is my Chart of the Day: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past performance...

Say What?

THEY. SOLD. THEIR. STOCK. By David Leonhardt On Jan. 24, Richard Burr, a Republican senator from North Carolina, attended a private Senate briefing from senior government scientists about the seriousness of the coronavirus. Kelly...

Correlations Move Higher

The main reason for diversification is that you want to own various investments that will act differently during market environments. For example, you own bonds to provide income and diversify. However, during the last month of trading...

The Numbers Are Staggering

Just a few Facts of the Day to remind you of the history we just experienced: The S&P 500 moved by over 9% over three straight days. Over 18 trading days, the S&P 500 lost 29.5%. In one six-day stretch, the S&P 500 fell 20.7%....

The Ripple Effects

By now I am sure you have heard directly from someone you know or read a story of the unimaginable effect COVID-19 has had on small business owners. In my Chart of the Day, Goldman Sachs outlines the potential effect of the slowing...

Is This Capitalism?

Since 2010, the top 4 US airline companies bought back $45 BILLION of their own stock. Now they are asking for a $50 BILLION bailout. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Do The Five

1. HANDS – Wash Then Often 2. ELBOW – Cough Into It 3. FACE – Don’t Touch It 4. FEET – Stay More Than 3 Feet Apart 5. SICK – Stay Home. Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

-9%, 5%, -5%, -10%, 9%

Those were the daily returns of the US stock market last week. This is not normal. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Not Much To Say...

…About My Chart of the Day We just experienced the fastest 20% drawdown EVER. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

Thought of the Day

On this historic day, I wanted to share this note from one of the best investors of his generation. “Everyone has the brain power to make money in stocks. Not everyone has the stomach.” ~Peter Lynch If you can’t sleep...

History

We have lived through history over the past three weeks. In this Chart of the Day, you can see how we shape up in terms of calendar year returns going back to 1987 and the intra-year decline. Stay Tuned, Disciplined & Patient! {TJM}...

Thought of the Day

“Success is not final, failure is not fatal: it is the courage to continue that counts.” ~Winston Churchill | Former British Prime Minister Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) |...

Historical Drawdowns

Short, Sharp & Scary In my Chart of the Day from Bespoke Investments, they outline annual drawdowns annually dating back to 1928. After trading today, we have exceeded the median drawdown. Stay Tuned, Disciplined & Patient! {TJM} The...

Not All Bear Markets Lead To Recession

While this is a true statement, it is important to gauge your risk tolerance. Can you emotionally handle losing between 24-37% of your investment funds? Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) |...

Higher Yielding Bonds

If history is any indication we may see high yield bonds become higher yielding bonds as credit conditions worsen. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Say What?

Is your meth contaminated with coronavirus? This Florida police department will test it for free. And while you are there they will take your measurements to see what size jumpsuit you may need? Stay Tuned, Disciplined & Patient! {TJM}...

European Bank Stocks

Not good! The index of the largest European bank stocks are -25% in 13 days. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that past...

An Update From China

As you can see in the Chart of the Day, car sales in China were slogging through due to an economic slowdown. Then they fell off a cliff due to the coronavirus. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

Powell Panic

In the Cartoon of the Day, Bob Rich pinpoints why the Federal Reserve Chairman cut interest rates by 50 basis points in between meetings this morning. Between equity markets, high yield/levered loan markets and the President, he was...

Follow The Bond Market

There is a mantra on Wall Street to follow the actions in the bond market over the stock market as bonds historically have done a better job at sniffing out changes in underlying economic fundamentals. In the Chart of the Day, you can...

Reasons To Sell

There is one reason to buy: you feel that your investment will go up in value. However, there are many reasons to sell: Although for the long-term investor, this entry could be entitled Reasons to Buy! Stay Tuned, Disciplined &...

Stats of the Day

Global Bond Yields With the recent Coronavirus catalyst forcing a flight to safety, fully 23% of all bonds trading in the world have a negative yield. This is ~$14 TRILLION in the value of global bonds with negative yields. Stay Tuned,...

Fact of the Day

Here’s how much money you need to be among the richest 10% of people in the world via @CNBCMakeIt: $93,170. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Tweet of the Day

This is not to downplay this strain of the coronavirus but is to serve an historical perspective and frame the recent bout of volatility: @ReformedBroker 17,000 Americans died of H1N1 in 2009, but it barely registered on Wall Street...

Say What?

This is one way to try and attempt to stop the global economies and stock market from going down: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease...

Cartoon of the Day

When stocks AND gold go down together! 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...

Experience Pays

This is an interesting Chart of the Day that highlights the increase in average age for new CEO hires. Another sign of the graying of America. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O...

Mad Mad World

Has the ‘financial world’ has gone mad? The Financial Times reported last week that sub-1% yielding Greek and Italian 10-year government bonds are now considered safe havens! As a point of reference the US 10-year...

Nothing To See Here

In the Chart of the Day, we take a gander at asset bubbles over the past 40 years. This is based on asset price appreciation. Clearly, valuation is in the eye of the buyer. Stay Tuned, Disciplined & Patient! {TJM} The Investor &...

All Time Is A Long Time

According to the Chart of the Day from @sentimentrader, the NASDAQ 100’s 20-day Moving Average has gone up 88 DAYS IN A ROW. This is the most extreme in history. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character...

Earnings Update - II

In my Chart of the Day, I continue on the path of dissecting corporate earnings growth. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE INFORMATIONPlease remember that...

Concentration At The Top

For anyone that wants to gripe about the concentration of the U.S. market (like me here), here’s some context: The US stock market indices in comparison to the rest of the world are not as concentrated. Stay Tuned, Disciplined &...

Wealth Transfer

In the Chart of the Day, the Pew Research Center outlines how only the Highest Quintile and the Top 5% are the only groups to have gained wealth since the Global Financial Crisis. Again, all of the maneuvers by Global Central Banks has...

Say What?

So yesterday we got confirmation that the ECB bought all € tranches of LVMH’s jumbo note! This jumbo bond deal was issued to fund the purchase of Tiffany (TIF). Remember that back in December, four Italian Lega MEPs asked...

Earnings Update

Exclude the Big 5 (Microsoft, Apple, Alphabet, Amazon and Facebook) based on market capitalization, S&P 500 earnings were down 7.5% in the 4th quarter of 2019 per SocGen. As you can also see in the Chart of the Day, the reported...

Sustainability Stories

We can do better than this: 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....

Tweet of the Day

@HedgeyeDDale “Remember, most investors’ conviction levels are most highly correlated with the quality of the narratives they’ve concocted in their head, rather than the rising or falling probabilities of fundamental...

Not Again

Strange actions are afoot again in the bond market. Per Barron’s: Case in point: the return of particularly speculative paper called payment-in-kind, or PIK, securities. Instead of paying interest in cash, the borrower simply...

Bad Breadth

“Stock markets are strongest when they are broad, and weakest when they are narrow.” ~Bob Farrell Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

All Time Is A Long Time

Central Banks providing liquidity is nothing new. The Chart of the Day outlines the 12-month Rate of Change dating back to 1969. As you can see over the past 12 months the Fed provided the largest liquidity boost in history. Result?...

Simple Is Better

Most of the time. In my Charts of the Day, we see that most endowments regardless of size fail to beat the standard 60/40 model over the long-term. As Ben Carlson outlines in his article, most of the times simple is better than complex...

Thoughts of the Day

From Seth Klarman – January 2020 “How ought one navigate an environment such as today’s? With great patience and strict discipline. Every position in the portfolio must offer the prospect of compelling rewards for the...

Sustainability Stories

According to a new report from research firm Waste Business Journal (yes I subscribe), the United States is estimated to have 18 years of remaining landfill capacity left in 2020. The need for cost-effective, sustainable and...

Peak Dot.com Performance

Unbelievable update on this Chart of the Day. High P/E stocks beat Low P/E by MORE in the last 10 years than they did in the 10 years to the Dot.com. In short, this comes down to owing Financials & Healthcare VS. Technology and...

Stats of the Day

It only costs $10,000 to purchase a Chick-fil-A franchise, but here is the rub: According to Chick-fil-A, 60,000 people apply to be operators every year — and only ~80 are selected. With a 0.13% acceptance rate, it’s harder...

Dividend Seekers

This Chart of the Day is not intended to be direct investment advice, but an update on global stock yields: Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation (ICE) | S + R = O IMPORTANT DISCLOSURE...

Ugh

In my Chart of the Day, we see Behavioral Investing in one chart. This is a chart from Robinhood, which is an app that let’s you transact in stocks. As the price of Tesla climbs so do the number of new buyers of the stock. In...

Stats of the Day

Per Goldman Sachs: The S&P 500 market capitalization is currently concentrated in its five largest stocks to a degree not witnessed since the peak of the Tech bubble. Apple, Microsoft, Amazon, Google and Facebook collectively account...

Super Bowl Recipes By State

This special football edition of Chart of the Day is from Google Trends. It monitored the most searched terms by state leading up to last year’s Super Bowl. My wife makes the best buffalo chicken dip. Stay Tuned, Disciplined &...

Chart of the Day

With volatility rearing its head this past week, here is one of my favorite charts. It outlines how in the near-term investments have a wide range of outcomes. However, over a truly long-term time frame the volatility of returns is...

Awesome Videos of the Day

An advance copy of the Budweiser Super Bowl commercial… Budweiser ✔@budweiserusa America, look beyond the labels. You might be surprised by what you find.Watch Budweiser’s #SuperBowlLIV commercial now. #ThisBudsForYou 46...

By The Numbers

SARS broke out in 2002; MERS spread across the world in 2012. Late in 2019, a third deadly coronavirus began to radiate out from Wuhan, a city of 11 million: 2019-nCoV. Six to eight weeks after the outbreak is believed to have begun,...

Outbreak Update

In 2003, when the SARS outbreak struck China, the nation accounted for 4.3 percent of world economic output. Last year, it was 16.3 percent, so the coronavirus outbreak and subsequent reaction MAY have world-impacting economic effects...

It Finally Happened

After 71 relatively calm trading days, the S&P 500 finally closed with a move bigger than 1% on Monday. Although this is one of the longest streaks in history, it is quite interesting that we’ve seen a cluster of long streaks...

Perspective

Can you guess how many US citizens have died from the flu this season? New data from the CDC released on Friday estimates that so far this season, at least 6.4 million people have caught the flu, 55,000 people have been hospitalized...

Say What?

A recent Wall Street Journal article outlined a potential new tool for the Federal Reserve to utilize: A cap on US Treasury yields! Huh?!?! Don’t worry about the savers – they may never earn more than 3% on cash again. I...

Stats of The Day

“Today 50 percent of the investment-grade market is rated BBB, and in 2007 it was 35 percent,” Scott Minerd noted in a letter to clients this week. “More specifically, about 8 percent of the investment-grade market...

Years Ending In '0'

They typically are not good for the US stock market. However, I would not and do not put any stock into this regarding the management of client portfolios. Stay Tuned, Disciplined & Patient! {TJM} The Investor & Character Equation...

This Is A Test

This is a great Thought Experiment from Meb Faber who has done extensive research on valuations across countries. Which of the below investment options in the chart would you choose to invest in today? Most would opt for the...

Party Like It's 1999

Presented without comment: 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....

Stick To Your Process

This is great Chart of the Day from The New York Times. It outlines why building models isn’t the hardest part. It is having the discipline to follow the models and actually utilize them. Case in point, football. You can see what...

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...

What A Run

Not just the San Francisco 49ers and their run to the Super Bowl but also the stock market of late. As you can see in my Chart of the Day, over 87% of S&P 500 stocks are above their 200-day moving average. What does that mean?...

This Is Not New

In the Chart of the Day (O’Shaughnessy Asset Management), you can see that historically going back to 1963, the Top 20% of stocks have historically represented roughly 80% of Market Capitalization and Sales. Stay Tuned,...

Sustainability Stories

Aggregated from JUST Capital: WORKERSDelta plans to pay out $1.6 billion in profit sharing to its employees this year, marking the 6th year it has paid more than $1 billion back to its workers. – Kavya Vaghul Taco Bell, a Yum...

Stock Lull

The S&P 500 is on one of its longest streaks without a 1% daily move in the past five decades, highlighting how the latest leg of the stock-market rally has been a gradual climb rather than a euphoric surge. The broad equity gauge...

Thought of the Day

With the continued move higher across most asset classes, overconfidence is a major risk for investors. When investing seems easy, please be reminded it is not. It can continue uninterrupted for some time, but reversion to the mean is...

Goodbye...

It should come as no surprise that when you chronically raise income and property taxes you will have a groundswell of movement to lower tax areas. Case in point. Over the past decade we have seen residents move from such states to...

Tweet of the Day

This is not a solicitation to buy or sell any security! This is from @DKThomp regarding the upcoming IPO of mattress company Casper. This appears to be Casper’s business: Buy mattress at $400. Sell at $1,000. Refund/return 20% of...

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...