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Last Friday you may have heard that both the Dow Jones Industrial Average and the S&P 500 hit new all-time record highs. The moment was short-lived however...

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  • Short-Term Bottom Likely In, But Tread Carefully as B...
    By on October 1, 2014 | No Comments  Comments
    Last Friday you may have heard that both the Dow Jones Industrial Average and the S&P 500 hit new all-time record highs. The moment was short-lived however as both indexes sold off for the remainder of the day and then closed in the red. While the Dow and the S&P 500 have been rallying all ...
  • Are Japanese Equities Discounting Further QE Ahead?
    By on October 1, 2014 | No Comments  Comments
    In June 2012, Japan was facing a ticking time bomb of enormous debt. Given the reliable pattern we’ve seen over the years by central banks, I didn’t have to go too far out on a limb to predict “Massive Japanese Debt Monetization Is Coming – Yen to Be Devalued,” which then too...
  • Analyzing Earnings As Of Q2 2014
    By on October 1, 2014 | No Comments  Comments
    With the second quarter earnings report for the S&P 500 now in, I can update my quarterly analysis of earnings and estimate trends through the 2nd quarter of 2014. Second quarters results were considerably better than the Q1 as activity rebounded following the exceptionally cold winter season....
  • Why Isn’t Housing A Bubble?
    By on September 30, 2014 | No Comments  Comments
    In his book The Postcatastrophe Economy, iTulip’s Eric Janszen notes that financial bubbles don’t repeat. That is, yesterday’s bubble is never tomorrow’s because hot money likes to chase the next big thing, not the last big thing. Which explains how US equities, government bonds, fine art, a...
  • Forward Guidance Now Nightmare For The Fed
    By on September 29, 2014 | No Comments  Comments
    Janet Yellen is probably sorry Ben Bernanke ever embarked on his program of the Fed providing ‘transparency’ in its decision making, and ‘forward guidance’ for markets. It was helpful and fairly easy for five years when the need for more and more stimulus to get the economy going was clear. ...
  • Cheap Gold Stocks’ Upleg Intact
    By on September 29, 2014 | No Comments  Comments
    Gold stocks have plunged in September, crushed by the withering selling pressure from heavy futures shorting hammering gold.  As usual, these falling prices have kindled extreme bearishness on this left-for-dead sector.  But despite this rotten sentiment, gold stocks’ young upleg remains very mu...
  • Market Cap To GDP: The Buffett Valuation Indicator
    By on September 26, 2014 | No Comments  Comments
    I’ve updated this analysis to include yesterday’s Federal Reserve release of the 2014 Z.1 Financial Accounts for Q2. Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine inte...
  • Market Valuation Overview
    By on September 25, 2014 | No Comments  Comments
    I delayed posting this monthly update until we had yesterday’s release of quarterly Fed data for calculating the Q Ratio, which I’ve discussed in more detail in the Q Ratio commentary linked below. Here is a summary of the four market valuation indicators I updated at the beginning of ...
  • The Q Ratio and Market Valuation: Monthly Update
    By on September 25, 2014 | No Comments  Comments
    I’ve updated this series to include the data in yesterday’s Federal Reserve release of the 2014 Z.1 Financial Accounts for Q2. Based on data extrapolations through the current close, the Q Ratio is 70% above its arithmetic mean and 83% above its geometric mean. The current valuation leve...
  • Can The Economy Withstand Another Housing Breakdown?
    By on September 24, 2014 | No Comments  Comments
    With the three fascinations of the week, the Fed’s FOMC statement, the separation vote in Scotland, and the Alibaba IPO, now history, will investors re-focus on the economy? Given what the Fed actually said in its statement, and some recent economic reports, it might be a good idea. Investors were...
  • Dow And SPX Soar As Ultra Rich Rush To Buy Gold
    By on September 24, 2014 | No Comments  Comments
    Did you know that the number of gold bars being purchased by ultra-wealthy individuals has increased by 243 percent so far this year?  If stocks are just going to keep soaring, why are they doing this?  On Thursday, the Dow Jones industrial average and the S&P 500 both closed at record highs o...
  • Company Stock Buybacks Set Highest Pace Since 2007!
    By on September 23, 2014 | No Comments  Comments
    In yet another sign of market over-exuberance, the Wall Street Journal reports Share Repurchases Are at Fastest Clip Since Financial Crisis. Corporations bought back $338.3 billion of stock in the first half of the year, the most for any six-month period since 2007, according to research firm Biri...

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