Saturday , August 24 2019
Home / Tag Archives: Investing

Tag Archives: Investing

#WhatYouMissed On RIA: Week Of 08-19-19

We know you get busy and don’t check on our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything that you might have missed. The Best Of “The Lance Roberts Show” Video Of The Week Message From The Yield Curve Our Best Tweets Of The Week If you borrow money from a loan shark at a negative rate do you break his kneecaps...

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Stock Buybacks Imperil Corporate Viability

Goldman Sachs just completed an analysis of corporate balance sheets and found that dividend and stock buybacks accounted for 103.8% of their free cash flow. Meaning that they were paying more out in cash than they had on hand!  Over the last year, free cash flow has dropped 15 %, while debt is up 8 %. This corporate balance sheet squeeze is unprecedented; it is the worst cash flow crisis since 1980 and is unsustainable.  Corporate executives have turned to excessive borrowing levels...

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Mauldin – MMT Could Destroy This Nation

I am back from my 14th annual Maine fishing camp. The private event at Leen’s Lodge is generally called Camp Kotok in honor of David Kotok of Cumberland Advisors who started these outings many years ago. CNBC and others began calling it the “Shadow Fed,” but it is really just a meeting of wickedly smart people focused on economics and markets. (I am allowed to attend for comic relief.) We discussed the world’s problems and the general mood was that many of those problems are beginning to...

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Corporate Debt Is At Risk Of A Flash Crash

The world is awash in debt. While some countries are more indebted than others, very few are in good shape. The entire world is roughly 225% leveraged to its economic output. Emerging markets are a bit less and advanced economies a little more. But regardless, everyone’s “real” debt is likely much bigger, since the official totals miss a lot of unfunded liabilities and other obligations. Debt is an asset owned by the lender. It has a price, which—like anything else—can go up or down. The main...

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Investors Dilemma: Pavlov’s Dogs & The Ringing Of The Bell

Classical conditioning (also known as Pavlovian or respondent conditioning) refers to a learning procedure in which a potent stimulus (e.g. food) is paired with a previously neutral stimulus (e.g. a bell). What Pavlov discovered is that when the neutral stimulus was introduced, the dogs would begin to salivate in anticipation of the potent stimulus, even though it was not currently present. This learning process results from the psychological “pairing” of the stimuli. What does this have to...

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Inverted Yield Curve Is Actually Bullish

My favorite meme following last week’s yield curve inversion was captioned, “I survived the yield curve inversion.” My favorite tweet (from @jfahmy) was, “The next Jobs Report should be very strong with the 50,000 “Yield Curve Experts” that were added this week.” Last Wednesday, the day the Dow dropped 800 points, the yield curve inverted for a few hours. There is a lot to unpack in that sentence, so let’s get to it. First, I have to briefly define what the heck a yield curve is so if you...

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The Dog Whistle Heard Around The World

On August 15, 2019 the Washington Post led with a story entitled Markets sink on recession signal. The recession signal the Post refers to is the U.S. Treasury yield curve which had just inverted for the first time in over ten years. We have been highlighting the flattening yield curve for the past six months. As we have discussed, every time the ten-year Treasury yield has fallen below the two-year Treasury yield, thus inverting the yield curve, a recession has eventually developed....

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5-Things Your Broker Wont Tell You – Part 2

Valuations Matter. As I mentioned briefly in Part 1 of the series,  investors about to the enter the retirement distribution phase of their lives or seeking to extract money from a basket of variable assets like stocks and bonds to re-create a retirement paycheck, must be keenly aware of portfolio risk and prepare for a cycle of muted portfolio returns. Newbies to the retirement experience and those who aspire to retire within the next 3-5 years must seriously consider comprehensive financial...

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Technically Speaking: This Is Still A “Sellable Rally”

In last Tuesday’s “Technical Update,” I wrote that on a very short-term basis the market had reversed the previously overbought condition, to oversold. “This could very well provide a short-term ‘sellable bounce’ in the market back to the 50-dma. As shown in the chart below, any rally should be used to reduce portfolio risk in the short-term as the test of the 200-dma is highly probable. (We are not ruling out the possibility the market could decline directly to the 200-dma. However, the...

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The “Trade War” Is Over, Trump Just Doesn’t Realize It Yet.

On Tuesday, the markets bid higher following a statement from the U.S. Trade Representative’s office that tariffs will commence on September 1st, but that some products will be delayed until December 15th. To wit: “…some tariffs will take effect on Sept. 1 as planned, ‘certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent. Further, as part of USTR’s public comment and hearing...

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