Monthly Archives: April, 2018

Are You Making This Investing Mistake?

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Reading Time: 5 minutes There is a lot of speculation about what the rise of passive investing will do to the economy and the stock market. In theory, if everyone invested passively, then public companies would have less incentive to improve their businesses. This is far from reality as of 2018. As you can…CONTINUE READING

Why Are Stocks Falling After Great Earnings Results?

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Reading Time: 5 minutes Heading into the Q1 earnings season, we mentioned that the bar was raised very high. Usually, the estimates fall a few weeks before the reports come out. This time they were raised because of the tax cuts. Based on the average beat rate, the implied expectations for year over year…CONTINUE READING

Is 2008 Financial Crisis A Reason To Be Bullish About Future?

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Reading Time: 5 minutes Many bearish investors have become obsessed with being negative about stocks on the grounds that investor sentiment was at an all-time high in January 2018. You can’t blame them going against almost euphoric sentiment that existed earlier this year given that this is the 2nd longest bull market since WWII.…CONTINUE READING

The US Is In Secular Economic Decline

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Reading Time: 5 minutes A statement popular in business is “if you’re not growing, you’re dying” (attributed to William Burroughs). It’s a great quote because it shows how quickly a business can fail. Unfortunately, America’s economy is trending in the wrong direction as growth is falling towards the flatline in expansions. If an economy…CONTINUE READING

Will This Be The Longest Business Cycle In History?

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Reading Time: 4 minutes The U.S. stock market is in a 9 year bull market which makes many investors skeptical of the continued likelihood of market out performance. However, simple looking at the length of time without accompanying data to support this view that the business cycle is concluding is an irrational assumption. For…CONTINUE READING

The Market Is Controlling Central Bank Policy

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Reading Time: 5 minutes In the past few weeks we have reported on the economic weakness in Europe. The Citi Economic Surprise index for Europe is extremely negative showing reports are missing economists’ expectations. The ECB’s Mario Draghi responded to this recent weakness by stating growth may have peaked for the cycle. This is…CONTINUE READING

Will Oil Prices Move Higher In 2018?

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Reading Time: 5 minutes We previously reviewed the oil market in U.S. Shale vs. OPEC Oil Price War: Who Will Win?. American production of oil accelerated from 2012 to 2014 as non-conventional oil and gas drilling in shale led to a revolution in production known as fracking. The fracking revolution didn’t affect the marketplace…CONTINUE READING

Why Are Companies Adding Excess Debt?

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Reading Time: 5 minutes Every business cycle has a debt build up followed up an inevitable deleveraging. In order to grow their businesses in excess of existing cash flow, firms need to take out debt when the economy is expanding and they need to de-risk the balance sheet in times of financial stress to…CONTINUE READING

Rate Hike Cycle To End In 2020?

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Reading Time: 5 minutes A big question investors are trying to wrap their heads around is why the headlines suddenly matter to equities in 2018. There were geopolitical concerns in 2017, yet stocks were sanguine. This year, negative headlines seem to impact stocks more. There’s no doubt some of the uncertainties could affect stocks…CONTINUE READING

Global Economy Is Slowing

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Reading Time: 5 minutes The U.S. economy is entering its 4th economic slowdown of this expansion, which has been relatively weak. To be clear, the economy isn’t close to having two quarters of negative real GDP growth which is the baseline definition of a recession. Four slowdowns in one expansion is an unusually high…CONTINUE READING

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