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Tag Archives: Risk

Mauldin: China’s Grand Plan To Take Over The World

When the US and ultimately the rest of the Western world began to engage China, resulting in China finally being allowed into the World Trade Organization in the early 2000s, no one really expected the outcomes we see today. There is no simple disengagement path, given the scope of economic and legal entanglements. This isn’t a “trade” we can simply walk away from. But it is also one that, if allowed to continue in its current form, could lead to a loss of personal freedom for Western...

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Seth Levine: Why Are We So Scared

I always find this time of year to be self-reflective. Year-end provides a natural point for critiquing past performance and fitting it into a broader investing context. These holidays in particular have a way of foisting this perspective upon me, and with deep meaning. As a parent of two young kids, my holidays now kick off with Halloween. Perhaps stuck in this spirit, I find myself wondering: Why are we so scared? I can’t seem to shake this sense that we live in a culture that’s scared. I...

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Technically Speaking: COT Positioning – Volatility, Oil, Dollar, & Rates (Q3-2019)

As discussed in the past weekend’s newsletter, we have been laying out the basis for a market correction. What has been most stunning is the rapid reversion in sentiment from “bearishness” this summer, to outright excess “bullishness” in just a few short weeks.  “But it isn’t just the more extreme advance of the market over the past 5-weeks which has us a bit concerned in the short-term, but a series of other indications which typically suggest short- to intermediate-terms corrections in...

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David Robertson: “Best Used By”

Most people have had an experience or two with something that is out of date. Whether gulping down some spoiled milk, biting into some moldy bread, or sipping a glass of wine that has turned to vinegar, the experience tends to be shocking, unpleasant, and memorable, all at the same time. The lesson quickly learned is that you need to pay attention to how “fresh” certain things are to avoid an unpleasant experience. The same thing happens with social norms, albeit with a longer time frame....

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Mauldin: Modern Central Banking Is More Vulnerable Than We Think

Banks are a place where you store your cash, right? Not exactly. When you deposit money in a checking or savings account, you aren’t just letting the bank hold it on your behalf. You are lending the bank that money and the bank is borrowing it. That’s why deposits show as a liability on the bank’s balance sheet. We think of banks as lenders, and they are, but they’re also borrowers. They make money by lending at higher rates than they pay as borrowers, and by leveraging their deposits via...

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Corporate Profits Are Worse Than You Think

Corporate profits are worse than you think. In a recent post, I discussed the deviation of the stock market from corporate profitability. To wit: “If the economy is slowing down, revenue and corporate profit growth will decline also. However, it is this point which the ‘bulls’ should be paying attention to. Many are dismissing currently high valuations under the guise of ‘low interest rates,’ however, the one thing you should not dismiss, and cannot make an excuse for, is the massive...

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Technically Speaking: Everyone Is Swimming In The “Deep End.”

With the market breaking out to all-time highs, the media has started to once again reach for their party hats as headlines suggest clear sailing for investors ahead. After all, why not?   The Federal Reserve cut rates for the 3rd time this year. The Fed is also back in the “QE” game of buying bonds. President Trump has “surrendered” to China in order to end the “trade war.”  Corporate stock buybacks are on track for the second largest year on record. Earnings, due to buybacks, are beating...

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15-Extreme Risks & How You Can Navigate Them

Willis Towers Watson’s Thinking Ahead Institute (TAI) recently revealed what it considers the 15-extreme risks facing investors for 2019, as well as for the years ahead. The risks run the gamut from climate change to nuclear contamination. TAI’s research suggests, broadly, there are three hedging strategies available to institutions: Hold cash. Over long historical periods cash has held its real value through both episodes of deflation and inflation but there is no guarantee that this will...

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Dow 650,000? We Are Already There!

Just recently, CNBC ran an article touting the call of “Billionaire Investor Ron Baron” of the Dow reaching 650,000 in just 50-years. Billionaire investor Ron Baron sees the Dow at 650,000 in 50 years https://t.co/oPElm0nrHT — CNBC (@CNBC) October 25, 2019 As noted in the article: “Speaking from his annual investment conference in New York, Baron predicted the Dow Jones Industrial Average, based on historical moves over decades, will reach 650,000 in 50 years, with an over $500 trillion...

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Technically Speaking: 4-Risks To The Bullish View

When I was growing up, my father, probably much like yours, had pearls of wisdom that he would drop along the way. It wasn’t until much later in life that I learned that such knowledge did not come from books but through experience. One of my favorite pieces of “wisdom” was: “A sure-fire ‘no lose’ proposition is doing exactly the opposite of whatever ‘no lose’ proposition is being proposed.” Of course, back then, he was mostly giving me “life advice” about not following along with my...

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