While media remains fixated on the White House, the markets during Q2 were more attuned to corporate results and central bank activity. Investors saw solid gains and a smooth ride with the S&P returning 3.1% for the quarter – it was never up or down more than 2% in any of the three months. International stocks outperformed the United States for a second straight quarter. Markets Focus on Corporate Growth, Not Politics While much of the world’s attention has been focused on Trump and the administration’s next steps, the market has been more focused on economic and corporate growth than speculation around politics. Earnings growth for...
Ignore the rout in retail, focus on FANG… and hope for some dovish cooing from Yellen… Expectations for higher VIX uncertainty (VVIX – VIX of VIX) are at their highest relative to VIX since Dec 2006… h/t @Schuldensuehner Which just happened to mark the beginning of the end of the great moderation and the start of chaos in VIX… Small Caps hovered near unch after ramping back from early losses but Nasdaq was exuberant…Everything weakened in the afternoon into the close…The Dow ended almost perfectly unch… Everyone buying ahead of earnings… though we’re not sure why… VIX was pus...
We discuss some of the Methodology of the Case-Shiller Home Price Index in this Housing Market video, and then go over 20 cities and compare and contrast how each has fared since the Housing Market Crash. Seattle, Portland, Dallas and Denver are some really hot Housing Markets. Las Vegas still has a long way to go to reach the Pre-Housing Crash levels, a lot of significant damage done to the Florida Housing Markets as well, and it has taken longer to recover. What this undertaking illustrates is just how local the Real Estate Market is even within the larger backdrop of an overall healthy job market and economy. All Housing Markets are better...
There has been much said about investing and how to accurately value a particular stock or other asset. Plenty of theories exist as to how to determine the real value of an investment today. There are few models as popular as the dividend discount model (DDM) though, and this alone warrants a review of the pros and cons of the DDM. How This Model Works In order to make an assessment of the value of DDM you must first understand how it works. It sounds complicated at first, but truthfully it is just a mathematical equation that is supposed to produce a result for the value of a stock. Basically, one must first select a company that pays a di...
In a recent article I advocated for a new way of naming business cycles. The new approach emphasizes the cause rather than the effect. So instead of the “housing bubble” and “financial crisis,” we should refer to the Greenspan-Bernanke Crisis. Here we will turn our attention to the current situation. The current economy is a puzzle for mainstream economists. Some aspects of the economy seem to be very strong, such as the stock market, real estate, social media, and internet companies. Other aspects of the economy seem to be very weak, such as economic growth, wage increases, and the number of full time “breadwinner” jobs. One majo...
“Learn what is to be taken seriously and laugh at the rest.” Hermann Hesse “Narcissism falls along the axis of what psychologists call personality disorders, one of a group that includes antisocial, dependent, histrionic, avoidant and borderline personalities. But by most measures, narcissism is one of the worst, if only because the narcissists themselves are so clueless.” Jeffrey Kluger The silliness of these markets and those who enable them make me laugh. The politicians of the day are almost unbelievable— stylized caricatures of human beings. If you take them out of their Capitol elements they seem out of place, ...
Shares of biotech giant Celgene (CELG) may be worth $200 per share if peak sales of late-stage assets, including luspatercept, ozanimod, and GED301 are met, said analyst Ying Huang. LUSPATERCEPT: Luspatercept is an experimental drug in clinical trials for the treatment of anemia in beta thalassemia and myelodysplastic syndromes. It is being developed by Acceleron Pharma (XLRN) in collaboration with Celgene. In late June, Acceleron announced preliminary results from the ongoing Phase 2 study of luspatercept in patients with beta-thalassemia during an oral presentation at the 22nd Congress of the European Hematology Association, EHA. “Wit...
What’s the safest investment as the global economy enters increasingly risky, troubled times? I’ve reviewed hundreds of academic papers, investment reports and newsletters and researched long-term strategies and backtests and reached one conclusion. I won’t keep you in suspense: it’s bat guano (or seabird guano if you can’t get the bat stuff). Yes, bat doo-doo is the safest single investment on the planet. OK, so I didn’t do a lot of fancy research because that would have been a waste of time. If the era we’re entering is fundamentally unlike the previous eras, then studying past investment results...
Former IMF chief economist Ken Rogoff warned today on CNBC that he was concerned about China. Specifically, he worried that country might “export a recession” to the rest of Asia if not the rest of the world. I’m not sure if he has been paying attention or not, but the Chinese economy since 2012 has been doing just that to varying degrees often just shy of that level. If there’s a country in the world which is really going to affect everyone else and which is vulnerable, it’s got to be China today. If there’s a country in the world which is really going to affect everyone else and which is vulnerable, it’s got to be China to...