The Earnings Game Companies Play
If anyone watches CNBC, they will constantly hear that a company earned a certain number less “ex” one time charges. When they say that, CNBC is reporting earnings on what is called a “pro forma” basis. This is different than the GAAP (Generally Accepted Accounting Principles) rules for reporting financial information. Not only do pro […]
Is Gold the Answer to Negative Interest Rates?
Federal Reserve Chairman Janet Yellen in her recent address to Congress mentioned that negative interest rates are on the table. These comments come after the Federal Reserve, in January, asked US banks to stress test for negative interest rates. We believe this potential adjustment to interest rates by the Fed, along with moves by other […]
Thoughts on Current Stock Market Turmoil
With today’s stock market decline, many stocks and market indexes have lost all the gains achieved over the past few years. Some high growth areas like Biotech are down significantly (-30%) this year. In addition, volatility in 2015 and in the early part of 2016 has definitely come to the forefront as the Federal Reserve […]
Our Final Note on the Euro
About 3 years ago, we started writing about our concerns within Europe. At that time, we took a short position in the Euro given the myriad of problems we thought Europe was facing. Ten years ago, it would have been very difficult for individual investors to make money on the currency markets. However, with the […]
High Yield Bonds – The Canary in the Coal Mine?
High Yield Bonds – The Canary in the Coal Mine? The high yield bond market has shown continued weakness over the past six months. As an example, take a look at the pricing chart below for HYG, a popular high yield bond ETF. Part of the problem in the high yield bond market has been […]
Remember the BRICS, now we have FANG!
Remember the BRICS, now we have FANG! It was only 6-8 years ago that stories about the BRIC (Brazil, Russia, India and China) countries becoming the dominant economies were front and center on most financial news broadcasts. Investors willingly followed the talking heads’ advice and pulled money out of US investments in order to join […]
Federal Reserve Raises Interest Rates
As you may have already heard, the Federal Reserve (the “Fed”) raised interest rates for the first time in almost ten years. What this means for the economy over the next few weeks and months is anyone’s guess. This is all new for the Fed and the financial markets and what happens next is the […]
Bond Market Update
The news du jour over the next few weeks will be about whether the Federal Reserve (“Fed”) will raise interest rates. In anticipation of the Fed’s meeting, the bond market is already making adjustments to bond prices – especially in the corporate bond market. In our last bond market update in June, we discussed what […]
Washington changes your Retirement Plan in the Dead of Night
Last Friday, very early in the morning, the Senate passed the budget bill which now goes to President Obama to sign which will change Social Security rules dramatically. The main changes will be eliminating two relatively lucrative strategies – “file and suspend” along with “restricted application”. Under old law The “file and suspend” strategy, in […]
Investing – it all depends on future earnings growth
When investing in the equity market there are two factors that go into deciding what assets to buy: 1) what is the value of the asset today; and 2) how much will the earnings of the asset grow in the future. The first one is fairly easy to figure out. The second is more difficult. […]