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Tag Archives: Valuations

10-Investing Axioms Every Investor Should Learn

Martin Tarlie of GMO just recently wrote a great piece on the issue of the current U.S. Stock Market Bubble asking the question of whether or not it has finally burst. To wit: “A new model explains this dichotomy between price action and fundamentals by suggesting that a bubble in the U.S. stock market started inflating in early 2017, and continued to inflate through the third quarter of 2018. In the fourth quarter, however, indications were that the bubble had started to deflate. And when...

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Fundamentally Speaking: 2019 Estimates Are Still Too High

” So far in fourth quarter reporting season, with 11 percent of the results reported for the S&P 500, three-quarters of companies have actually surprised Wall Street’s forecasters. Earnings are shaping up to be better than people expected.” – CNBC While it is a correct statement, it is also shows the problem with the “earnings silly season.” As I noted in this past weekend’s Real Investment Report: “With earnings season underway, there is support in the short-term for asset...

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Technically Speaking: Bull Or Bear? Comparing Views

As the trumpets sound to signal the start of earnings season, the battle between fundamentals and “hope” begins. While earnings expectations have weakened markedly in recent months, the bulls remain steadfast in their belief the market correction is now over. As I discussed in this past weekend’s missive : “‘The stock market just got off to its best start in 13 years. The 7-session start to the year is the best for the Dow, S&P 500 and Nasdaq since 2006.’ – Mark DeCambre via...

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Technically Speaking: Return Of The Bull Or Dead Cat Bounce

“No animals were harmed during the writing of this article.”  If you listen to the media, the shocking and totally unexpected downturn last was unable to be foreseen by anyone. Thankfully, it’s now over and we can get back to the roaring bull market.  Or can we? Mark Hulbert wrote an interesting piece recently stating: “The stock market’s recent correction has been more abrupt than you’d expect if the market were in the early stages of a major decline. I say that because one of the hallmarks...

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Why Gundlach Is Still Wrong About Higher Rates

Last Monday, Jeff Gundlach, famed bond fund manager and CIO of Doubleline, made an interesting comment during an interview with CNBC when he stated that the 10-year Treasury yield would top 6% by 2020 or 2021. 6% would be the highest yield since 2000. The chart below shows Gundlach’s estimated yield as compared to the long-run range of economic growth. (Note that real GDP growth was running at 5.27% in 2000 as compared to 3.0% today which is also getting weaker.) As I discussed last...

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Rationing Rational Rationalizations

What is the Greenspan or Fed put? It is an idea, the legend that says the US central bank will only allow a little downside in stocks. The 1929 crash despite being so long ago has been indelibly imprinted upon the machinations of policymakers. Some say they can’t see a big slide without the Great Depression. Therefore, they will do anything and everything to prevent a market crash; up to and including, pace 2002 Bernanke, using the “printing press.” Since money goes into stocks, a la 1929,...

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Weekend Reading: Last Chance For Santa Claus

So far, the month of December has sucked. From Powell to Gundlach, to Trump, and a falling oil prices, there hasn’t been much “holiday cheer…” However, with the market very oversold, there is still hope that “Santa Claus” could soon appear. If we take a look back at history, going back to 1957, we find that only a small percentage of the time does the market decline for more than 4-weeks in a row without a reflexive bounce. The red vertical bars are every 4- or more consecutive negative...

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Technically Speaking: Has “BTFD” Become “STFR”

Kevin Wilson recently penned a piece for Seeking Alpha that made a great point about where the markets are currently. To wit: “Famous market observer Art Cashin mentioned a metaphor in October 2017 that resonated with me. He said (words to the effect that) at that moment, market players had only the protection provided by pictures of lifeboats, not the lifeboats themselves. This is just like the Titanic, whose measly 16 lifeboats looked nice, but left many hundreds on board with no means of...

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You Have A “Trading” Problem – 10 Steps To Fix It

In April of 2018, I wrote an article entitled “10-Reasons The Bull Market Ended In 2018” in which I concluded: “There is a reasonably high possibility, the bull market that started in 2009 has ended. We may not know for a week, a month or even possibly a couple of quarters. Topping processes in markets can take a very long time. If I am right, the conservative stance and hedges in portfolios will protect capital in the short-term. The reduced volatility allows for a logical approach to...

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Weekend Reading: Did The Grinch Steal The Christmas Rally?

On Tuesday, we put on a small S&P 500 trading position for an oversold bounce. At first, it didn’t work and we were almost stopped out, but a late day rally kept us in the position. Wednesday was a different picture as stocks rocketed out of the gate on more “trade talk” news with China, but that rally faded as well heading into late day as the owner of the “National Enquirer” was granted immunity in exchange for details on another Trump-related “hush money” payment. Yesterday, the...

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