During the covid crash last year we saw central banks around the world ease policy like never before. Rate cuts, asset purchases, and more – everything was on the table. By the end of 2020, this is what a chart of central bank interest rates and inflation looked like… And this what it looks like […]
Click here to register for our October Webinar (10/26) — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Transitory Persistent Inflation The […]
7.5%. That’s been the annual return assumption of pension funds for decades. What mix of assets is required to generate such a return? The answer to that question has changed dramatically over the past 40 years. Let’s take a closer look… January 1981 In 1981, short-term Treasury bills were yielding over 15%, near their highest […]
Pretend for a moment that you’ve been stranded on a desert island and have no idea where Fed policy stands. After being recued, you’re given the following the information… US Real GDP is at its highest level ever, up 12% over the last year and on pace for its highest annual growth rate since the […]
Click Here for the Replay of September’s Webinar — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Back to Work The Unemployment […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio declined 5.06% (net of fees) in September. In last month’s update, I wrote the following: “The equity markets in the U.S. have been unusually calm thus far in 2021, with the S&P 500 already posting 54 all-time highs and […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US equity relative strength hit a new high in August, continuing the decade-long run of US outperformance. The S&P 500 has gained 17% in 2021 versus 5% for the […]
Click Here for a Replay of Last Week’s Webinar — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 6 charts from the past week that tell an interesting story in markets and investing… 1) 0% Rates Make 0 […]
Sign up for our September Charts webinar (on 9/29) here. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Ever Heard of Evergrande? Before this […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US equity relative strength hit a new high in August, continuing the decade-long run of US outperformance. In the past month we’ve seen a slight pullback as international stocks […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 97 FOMC Meetings… Before 85 of those meetings, the market was pricing no change […]
“Buy the dip.” This has been the mantra for an entire generation of investors. Why? Because we are creatures of habit, and during the last 12 years the best habit you could possibly have had as an investor was to stop worrying and simply “buy the dip.” The fact that dips were often followed in […]
Sign up for next webinar (on 9/29) here. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing… 1) Inflation Everywhere You Look The transitory […]
This is a story about expectations. But first, I want you to read about Company A and Company B… Company A had revenues of $66.81 billion over the last year and net income of $7.14 billion. It was founded in 1912 and has 114,000 employees. Company B had revenues of $851 million over the last […]
By changing the start and end date, you can win just about any argument over what’s the best investment. Even the age-old battle between Gold bugs and stock market bulls? Yes, even that one. Here’s a guide to winning the argument, first in favor of Gold and then in favor of Stocks… If you’re a […]
Investing is never easy, but there’s no denying that the last 10 years in U.S. equities have been a far smoother ride than most of history. How do we define “smoother”? In layman’s terms: higher returns with lower risk. In technical terms, we can look at things like the Sharpe Ratio, which measures risk-adjusted performance. […]
Sign up for our weekly newsletter here. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Solana Surge Solana’s market cap hit $63 billion […]
Put these charts on your wall for reference the next time you think… All-time highs are a reason to sell… It’s “oversold” or “at support” and has to go back up… It’s “overbought” or “at resistance” and can‘t possibly go higher… Investors are rational and would never buy stock in the wrong company because of a tweet… A meme can’t lead […]
There are two types of investors: Pundits and Professionals… <> The Pundit thinks they know everything. The Professional knows that learning is infinite. <> The Pundit makes subjective predictions. The Professional makes objective assessments. <> The Pundit seeks self-promotion. The Professional seeks self-improvement. <> The Pundit exudes hubris. The Professional exudes humility. <> The Pundit […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US equity relative strength hit a new high in August, continuing the decade-long run of US outperformance. In the past few weeks we’ve seen a slight pullback as international […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio gained 0.59% (net of fees) in August. The equity markets in the U.S. have been unusually calm thus far in 2021, with the S&P 500 already posting 54 all-time highs and doing so without a pullback greater than 5% […]
Sign up for our weekly newsletter here. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 6 charts from the past week that tell an interesting story in markets and investing… 1) The Jobs Recovery Continues The US Unemployment […]
A 17,320% gain in 11.5 years. That’s what happens when you combine 3 turns of leverage with the greatest uptrend in history, the incredible move higher in the Nasdaq 100. The 3x Long Nasdaq 100 ETF ($TQQQ) was launched in February 2010. Since then it has advanced 17,320% (56% annualized) versus a gain of 890% […]
Investors today are experiencing one of the calmest markets in history: The S&P 500 has posted a positive return in each of the last 7 months (February – August), and has done so with bond-like volatility (5.2% vs. 5.2% historical average for the Bloomberg Barclays Aggregate). This is lower than over 98% of historical periods […]
“Higher risk, higher reward.” This is one of the most repeated maxims in investing, and the basis of Modern Portfolio Theory. It’s also intuitive: riskier investments should be compensated with a higher return. But what should happen and what actually happens is not always one in the same… It’s May 2006 and Gold is all […]
Click Here for a replay of this week’s webinar discussing 5 Important Themes in Markets Today. __ This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets […]
Sign up here for our August 24 webinar on the most interesting charts/themes in markets. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 6 charts from the past week that tell an interesting story in markets and investing… 1) […]
Sign up here for our August 24 webinar on the most interesting charts/themes in markets. This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Jobs Jump The US Unemployment Rate moved down to 5.4% in July, its lowest […]
Don’t miss our latest insights. Sign up here for our free newsletter. The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US equity relative strength hit a new high in July, continuing the decade-long run of US outperformance. b) US vs. Emerging Markets ($SPY/$IEMG) Weakness out of China has led […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio declined 0.52% (net of fees) in July. We saw a resurgence of covid-19 during the month, with the Delta variant pushing up cases in the U.S. to levels we haven’t seen since April. While the vaccinations still […]
Click here for a replay of this week’s webinar discussing the most important charts and themes thus far in 2021. — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 6 charts from the past week that tell an interesting […]
As children we’re taught that the shortest distance between two points is a straight line. Many expect investing to be the same, with high and consistent returns bringing you from point A (starting out) to point B (wealth). But markets don’t operate in the same realm as the physical world. There is no straight line […]
“But valuation doesn’t matter anymore.” You’ve probably heard that statement in some form or fashion over the last year as we’ve witnessed a rolling series of manias in markets like never before. And indeed it is true – at least in the moment. During a parabolic advance, sentiment and herd behavior easily trump valuation and […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 96 FOMC Meetings… Before 84 of those meetings, the market was pricing no change […]
Register here for our Webinar on July 27th discussing the most important charts and themes thus far in 2021 (a replay will be sent to those who register). — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts […]
Don’t miss our latest insights. Sign up here for our free newsletter. The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) A new high in US equity relative strength was reached this week. Over the last 10 years, US stocks are up 297% versus a gain of only 69% for […]
Register here for our Webinar on July 27th discussing the most important charts and themes thus far in 2021 (a replay will be sent to those that register). — This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 […]
Here are the charts and themes that tell the story of the first six months of 2021… I. The Beginning of the End of Covid-19 The scourge known as Covid-19 started the year at its most prevalent level to date. But the bad news wouldn’t last long. Things were about to change, and change for […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing… 1) Big Trouble, Big China Chinese internet stocks (ETF: $KWEB) hit a 52-week low this […]
“Invest in what you know.” A common piece of advice that’s often taken to heart. Familiarity breeds comfort, and the more comfortable you with an investment, the more likely you are to own it. Which is another way of saying that our feelings and emotions are the primary drivers of our investment decisions, not data […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) The $1 Trillion Club Facebook ($FB) became the 5th US Company to cross the […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio gained 5.66% (net of fees) in June. Since inception (October 2020) the portfolio has gained 13.48% (net of fees). The broad markets finished higher in June with growth/technology stocks leading the way. This was a reversal of […]
Don’t miss our latest insights. Sign up here for our free newsletter. The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) More than a decade long streak of US equity outperformance peaked last September. Since then US relative strength has gone sideways… b) Emerging Markets vs. US ($IEMG/$SPY) Emerging Markets […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) Waiting for “Actual” Inflation Fed Chairman Jerome Powell boosted markets this week in saying […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) In Search of Greener Pastures The percentage of workers in the US that are […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 95 FOMC Meetings… Before 83 of those meetings, the market was pricing no change […]
6 charts from the past week that tell an interesting story in markets and investing… 1) Consumer Prices Surge US consumer prices rose 5% over the last year, the highest increase since 2008. Core prices (excluding food/energy) rose 3.8%, the fastest pace since 1992. The US is not alone in seeing rising prices, though its […]
Here’s a list of the top 30 stocks in the S&P 500 over the past 30 years… What stands out? The unfathomable returns, a product of time and the magic of compounding. What’s lost in this graphic, however, are the many periods of excruciating pain that anyone invested in these companies would have experienced. When […]
What are high yield bonds? I don’t mean the textbook definition (corporate bonds with a credit rating below BBB), but how they actually behave in terms of risk and return. To explore this, let’s address some common questions surrounding the asset class also known as “junk bonds”… Question #1: Do High Yield Bonds Act More […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) More than a decade long streak of US equity outperformance peaked last September. Since then US relative strength has gone sideways… b) Emerging Markets vs. US ($IEMG/$SPY) Emerging Markets […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 7 charts from the past week that tell an interesting story in markets and investing… 1) The Jobs Comeback The US Unemployment rate moved down to 5.8% in May, its […]
This is a story many of you will be familiar with. You have money to invest that’s been sitting in cash, either from the sale of a business, a recent inheritance, or built-up savings. This is money you don’t expect to need or access for more than 20 years, if ever. You know that cash […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio declined 0.58% (net of fees) in May. We added to some existing positions during the month on the correction and initiated two new positions. The broad markets sold off in the first half of May with growth names […]
5 charts from the past week that tell an interesting story in markets and investing… 1) The $100 Million Deli? Shares of Hometown International – a New Jersey Deli with a single location – hit a market cap of $113 million earlier this year and are still trading at $94 million today. Its latest financials: […]
You’ve heard the story before: Equity valuations are high… Interest rates are low…. Therefore, high valuations are “justified” by lower interest rates. Why? Some say it’s because stocks are simply the present value of their future cash flows. And lower interest rates (r) in the denominator of that equation should result in a higher present value, and […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming over the last 3 months after a relative decline from last September through mid-January. b) Emerging Markets vs. US ($IEMG/$SPY) Emerging Markets have been […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 6 charts from the past week that tell an interesting story in markets and investing… 1) $3 Gas Gasoline prices in the US are back above $3 per gallon, at […]
For 40 years (1980-2019), bond investors in the US earned a rate of return that outpaced inflation, and often by a wide margin: In the 1980s, 10-year yields moved from 10.4% down to 7.8%, and bond investors earned an annualized real return of 6.6%. In the 1990s, 10-year yields moved from 7.8% down to 6.3%, […]
7 charts from the past week that tell an interesting story in markets and investing… 1) Now Hiring There have never been more Job Openings in the US than there are today: 8.1 million. With 9.8 million people still unemployed, there is a big debate going on over whether the additional Federal unemployment benefits of […]
Core inflation in the US has moved up to 3%, its highest level in 25 years (note: core inflation excludes food/energy). At 4.2%, overall inflation is running at its highest level since 2008. The prices of imports and exports are surging… The price of Copper, one of the most important industrial metals, is now at […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming over the last 3 months after a relative decline from last September through mid-January. The new narrative: trillions in new economic stimulus is said […]
Valuations in the US are high, exceeding all prior periods in history with the exception of the dot-com bubble (March 1998 to December 2000).1 The long-run implications of higher valuations? Lower future returns and higher volatility/drawdowns, on average (see recent post). The natural question that follows: what, if anything, can an investor do about this? […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing… 1) Crocs Comeback One of the great comebacks in stock market history: Crocs is back […]
Over the past few months, we’ve made considerable progress in defeating covid-19… 45% of Americans (148 million people) are now vaccinated with at least 1 dose. In the most vulnerable age group (65+, which has seen >80% of covid-19 deaths), we’re at 85%. If we add in those who have been infected with covid-19 (but […]
US inflation expectations continue to rise, now at their highest levels since 2008. If higher inflation is coming (see here for some signs), many investors are wondering how that will impact their portfolio. Let’s take a look at how stocks and bonds have performed historically under various levels of inflation… If we segment calendar year […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio gained 2.69% (net of fees) in April. After a sharp pullback in March, there was a recovery in higher growth and Tech names in April, but on a relative basis they’re still exhibiting underperformance this year after a […]
Don’t miss our latest insights. Sign up here for our newsletter. 7 charts from the past week that tell an interesting story in markets and investing… 1) The Stimulus Effect US personal incomes were 29% higher in March 2021 than a year ago, the highest rate of increase ever recorded. 2) The V in Earnings […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 94 FOMC Meetings… Before 82 of those meetings, the market was pricing no change […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing… 1) Housing Boom 2.0 The US Housing Boom continues with New Home Sales surging to […]
Don’t miss our latest insights. Sign up here for our free newsletter… — The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming over the last 3 months after a relative decline from last September through mid-January. The new narrative: trillions in new economic stimulus is […]
Don’t miss our latest insights. Sign up here for our free newsletter… 96.8% of stocks in the S&P 500 are above their 200-day moving average. This is the highest percentage ever. When this many stocks are participating in a rising market, many consider it a sign of strength (“good breadth”) and a bullish indicator for […]
Don’t miss our latest insights. Sign up here for our newsletter. 5 charts from the past week that tell an interesting story in markets and investing… 1) A Rising Tide… …lifts all boats. 96.4% of stocks in the S&P 500 are above their 200-day moving average, the highest % ever. 2) The Free Money Effect […]
There is one definition of inflation that seems most applicable to today… “Too much money chasing too few goods.” We are seeing the impact of trillions of dollars in stimulus money chasing a limited supply of goods almost everywhere you look… Financial Asset Price Inflation -Stock prices are at record highs, up 50-80% in the […]
“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” – Warren Buffett With all due respect to Warren Buffett, the most important rule in investing is not anything close to “never lose money.” In fact, the entire notion is absurd. Anyone who has ever invested in the history of the […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. 5 charts from the past week that tell an interesting story in markets and investing… 1) All is Calm Again The $VIX has finally moved back to pre-pandemic levels, down […]
US manufacturing is booming. In a report released last week, the ISM Manufacturing Index moved up to 64.7, its highest level since 1983. Many are saying that’s great news for the stock market because higher manufacturing activity is evidence of a stronger economy. This seems logical but does the data support such a conclusion? And […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio declined 2.36% (net of fees) in March. There was a sizeable correction that began in mid-February in high growth and momentum names (see here for a more detailed post on this). A number of the 8 to 80 […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Nike an 8 to 80 Brand? “Just Do It.” Arguably the most recognizable slogan from one of the most recognizable companies. With customers in every generation, from 8 to 80, Nike is the leading global apparel brand in the world. 2) […]
Click Here for a replay of the Webinar I did with YCharts this week. We discussed 6 Long-Term Market Trends that have been showing signs of reversing. 6 charts from the past week that tell an interesting story in markets and investing… 1) The Jobs Recovery Continues As the US reopening continues, jobs are coming back. […]
Register here for our Webinar on April 1st discussing 6 Long-Term Market Trends that have been showing signs of reversing (replay will be sent to those that register). Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks […]
Momentum and Mean Reversion. The two most powerful forces in markets. Momentum dictates that what has done the best in the past will continue to do the best and Mean Reversion just the opposite – where what is done the worst will eventually do the best, reverting back to its mean. That both can be […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. __ Register here for our Webinar on April 1st discussing 6 Long-Term Market Trends that have been showing signs of reversing (replay will be sent to those that register). 5 […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Zoom an 8 to 80 Brand? “Let’s Zoom.” 2020 was the year that Zoom became a verb, providing an easy-to-use service that became an essential part of everyday life. Last April, daily Zoom meeting participants surged to 300 million, up from […]
Gold has been having a tough time of late, down 20% from its high last August. With government debt going through the roof and the Fed maintaining the easiest monetary policy in history, many investors are confused by the move lower. This was supposed to be the perfect environment for Gold. So why is it […]
Don’t miss our latest insights. Sign up here for our free newsletter… 5 charts from the past week that tell an interesting story in markets and investing… 1) Higher Growth + Higher Inflation = Easy Money? The Federal Reserve updated their projections at this week’s FOMC meeting with a substantial move higher in anticipated real […]
What a difference a year makes. On March 16, 2020, I wrote the following in a post entitled “When All News is Bad News”… “The Volatility Index (VIX), also known as the “fear index,” ended today at 82.69. Since its inception in 1990 it has never had a higher close… When all news is bad […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 93 FOMC Meetings… Before 81 of those meetings, the market was pricing no change […]
Back in January, I outlined 6 secular investing trends that were showing signs of a major reversal… Long Duration over Short Duration and Flattening Yield Curve. Large Caps over Small Caps. Stocks over Commodities. US over International. Growth over Value. Tech over Everything. Since then, the reversal of these major trends have continued, and in […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. __ 5 charts from the past week that tell an interesting story in markets and investing… 1) Stimmy, Stimmy, Stimmy The 3rd round of stimulus checks are on their way, […]
If market participants are correct, higher prices are coming, with inflation expectations surging to their highest levels in over 12 years.1 When most investors read the word “inflation” they immediately think of Gold, as conventional wisdom states that there is no better hedge against rising prices. Is this true? Let’s take a look… Since 1975 […]
Don’t miss our latest insights. Sign up here for our free newsletter… 5 charts from the past week that tell an interesting story in markets and investing… 1. The Price of Admission The S&P 500 fell 5.7% from its high in mid February to its low this week, its first correction since last September. This […]
Years from now, we’ll look back and say it was obvious. That the signs of a historic mania were clear as day, with a billion a day in SPACs being the most prominent. You read that correctly: $1 billion per day has been raised in the SPAC IPO market this year, an astounding figure. At […]
US National Debt has crossed above $28 trillion for the first time, increasing $4.6 trillion over the last year. As a percentage of economic output (GDP), our national debt has never been higher, steadily increasing over the past 40 years from 31% in 1980 to 130% today… Why is the ratio going up? Simply put: […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks had been outperforming international equities for over 10 years before hitting a relative peak last September. Since then, we’ve seen international outperformance but the ratio has gone […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review and Market Environment The 8 to 80 Portfolio gained 2.22% (net of fees) in February. In a repeat of January, equities came under pressure in the last week of the month. This time, the sell-off was blamed on rising interest rates and inflationary fears as the […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. __ 1) A Billion a Day The boom in SPACs continues with over a billion a day in new issuance in the first two months of the year. At this […]
When investors think about investing in bonds, losing money probably isn’t the first thing that comes to mind. Bonds tend to be synonymous with safety, clipping your coupon and allowing you to sleep well at night. While this is often the case, often is not always. We’re seeing that so far this year with the […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. Last September, this ratio peaked and we’ve seen international outperformance since… b) Emerging Markets vs. US ($IEMG/$SPY) US […]
Last month I outlined the data pointing to the beginning of the end of covid-19. Since then, I’m happy to report that some incredible progress has been made… Covid-19 hospitalizations in the US have declined 40 days in a row, down over 57% from their peak on January 6. At 56,159, hospitalizations are now back […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Shopify an 8 to 80 Brand? Shopify is used by over 1 million businesses in 175 countries around the world. Its user-friendly interface allows anyone to set up an online store. With Shopify POS, merchants can also sell their products in […]
6 charts from the past week that tell an interesting story in markets and investing… 1. Dr. Copper’s Comeback Copper closed at its highest level in over 9 years, more than doubling from its low last March. The signs of rising inflation can found almost everywhere. Freeport-McMoRan ($FCX), a leading producer of Copper, continues to […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Spotify an 8 to 80 Brand? With 345 million monthly active users and 155 million subscribers, Spotify is available in 93 countries and used by people of all ages. At 35% market share, Spotify is currently the world’s biggest music streaming […]
Over the past 40 years, bond yields have largely moved in one direction: down. The 10-Year Treasury went from a yield of 15.84% in 1981 to an all-time closing low of 0.52% in 2020. This has been a blessing for bond investors as prices move inversely to yields. And over the last 2 years, as […]
Don’t miss our latest insights. Sign up here for our free newsletter… The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September, this ratio peaked and started trending lower… b) Emerging Markets vs. US ($IEMG/$SPY) US Stocks […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. __ 1) No Inflation? The US Federal Reserve says there’s “no inflation,” pointing to metrics like the CPI (consumer price index) which is up only 1.4% in the past year. […]
No one likes losing money, but hearing about others getting rich in an investment you have no exposure to is simply unbearable, making the fear of missing out (fomo) more painful for many than anything else. This is a fear that builds and builds until the un-invested can’t stand it any longer, jumping in and […]
The CAPE Ratio just crossed above 39.1 In layman’s terms, what exactly does that mean? Equity valuations in the US are quite high. How high? Going back to 1871, the only periods in history with a CAPE above 39 are as follows… September 1929 March 1998 to January 2001 Today In September 1929, the CAPE […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Amazon an 8 to 80 Brand? Launched as a bookseller in 1995, Amazon has grown to become one of the most influential companies in the world, used by people of all ages in all walks of life. “I’ll just buy it on […]
1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September, this ratio peaked and started trending lower… b) US vs. Emerging Markets ($SPY/$VWO) US Stocks have outperformed Emerging Markets for many years, with the ratio peaking last May. Since then EM has taken a leadership […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Game Over All games eventually come to an end, and this one was no different. The mania that swept the nation last week ended as many had feared, with GameStop down 89% from its high last week. The progression […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Google an 8 to 80 Brand? “Just google it.” A phrase that has become synonymous with finding the answer to any question imaginable. Google is now estimated to control over 90% of the world’s search market, used by people of all ages. […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Apple an 8 to 80 Brand? Apple now has over 1.5 billion active devices worldwide, including 1 billion iPhone users. Its products are used by people of all ages, and it has become the most widely recognized brand in the world. 2) What […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review The 8 to 80 Portfolio gained 0.25% (net of fees) in January. The historic squeeze in heavily shorted names (GameStop being the most prominent) featured extreme volatility, which eventually spilled over to the broader markets as hedge funds delevered. The S&P 500 finished down 1.01% (total […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. — 7 charts from the past week that tell an interesting story in markets and investing… 1. How the Stock Market Became a Video Game This week was one for […]
Years from now we’ll look back at today as the day the stock market became a video game, replete with a cast of characters and a storyline to compete with the best of them. To be sure, it didn’t happen overnight. It’s been slowly building towards gamification since the start of the pandemic. Stuck at […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 92 FOMC Meetings… Before 80 of those meetings, the market was pricing no change […]
1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September, this ratio peaked and started trending lower… b) US vs. Emerging Markets ($SPY/$VWO) US Stocks outperformed Emerging Markets for years, with the ratio peaking last May. Since then EM has taken a leadership role hit […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Netflix Numbers Netflix reported earnings this week and surpassed expectations once again. Global subscribers moved above 200 million for the first time, increasing 22% in 2020 (up from 20% in 2019 and 18% in 2018). Netflix original series continue […]
When investors think about risk, 2008 is usually the first thing that comes to mind. And for good reason. It was the worst year that most investors alive today have ever experienced. With dividends included, the S&P 500 lost 37% in 2008, its largest decline since 1931 (during the Great Depression). Since the end of […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Netflix an 8 to 80 Brand? Netflix is increasingly becoming a part of every household, and its viewers span multiple generations, from Gen Z to Boomers… It has also become a global brand, with international growth outpacing US growth over the past […]
The most significant investing trends over the last 10 years can be summarized as follows… Large Caps over Small Caps. US over International. Growth over Value. Tech over Everything. Long Duration over Short Duration (Yields Falling, Curve Flattening). Stocks over Commodities. When Covid-19 first hit the US last February and March, all of these pre-existing […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Nike an 8 to 80 Brand? “Just Do It.” Arguably the most recognizable slogan from one of the most recognizable companies. With customers in every generation, from 8 to 80, Nike is the leading global apparel brand in the world. 2) […]
I’ve been waiting to write this post since the pandemic began a year ago. The ups and downs have been many over that time as the virus has moved in waves throughout the world. Here in the US, the first wave would hit the northeast the hardest. The second wave would hit the south and […]
This week’s 5-Chart Friday is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. — 5 charts from the past week that tell an interesting story in markets and investing… 1) A Clear Signal of Insanity Last Thursday morning, Elon Musk sent out […]
The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September, this ratio peaked and started trending lower and last week it hit a 9-month low… b) US vs. Emerging Markets ($SPY/$VWO) US Stocks outperformed Emerging Markets until […]
Every bull market has a company that captures the hearts and minds of its investors. Today that company – more than any other – is Tesla. At a market cap of $834 billion, it recently surpassed Facebook to become the 5th largest company in the US. A year ago it had a market cap of […]
There’s been a lot of crazy things going on in markets lately, but this one may top them all. Last Thursday morning, Elon Musk sent out this tweet to his 41 million followers… What’s Signal? It’s a messaging app for your phone and an alternative to WhatsApp, which has been criticized recently for privacy concerns […]
5 charts from the past week that tell an interesting story in markets and investing… 1) New Member of the Fab 5 Tesla’s market cap passed Facebook this week to become the 5th largest company in the US (trailing only Apple, Microsoft, Amazon, and Google). Its market cap now stands at $773 billion, up from […]
The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September, this ratio peaked and started trending lower and this week it hit a 9-month low… b) US vs. Emerging Markets ($SPY/$VWO) US Stocks outperformed Emerging Markets until […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review The 8 to 80 Portfolio gained 0.73% (net of fees) in December. The broad equity markets continued to grind higher during the month with market participants celebrating the long-awaited passage of the second major stimulus bill ($900 billion). Covid-19 cases, hospitalizations, deaths in the US hit […]
Here are the charts and themes that tell the story of 2020… I. The World Before Covid It’s hard to remember, but there was a time when where no one was talking about Covid-19. 2020 started off the same way 2019 ended: with record highs across the board. The only nagging concern was the ongoing […]
This week’s post is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. — 6 charts from the past week that tell an interesting story in markets and investing… 1) 12 in a Row… The Nasdaq 100 was up 49% in 2020, its […]
1) Be humble or the markets will eventually find a way to humble you. Having more confidence is a good thing in many areas of life. Markets, however, are not one of them. More confident investors tend to trade more and take on undue risk, leading to worse performance. If you were overconfident entering 2020, by the […]
The most important trends in markets and investing… 1) Equities a) US vs. World ($SPY/$ACWX) US stocks have been outperforming international equities for over 10 years. In early September this ratio peaked and started trending lower… b) US vs. Emerging Markets ($SPY/$VWO) US Stocks outperformed Emerging Markets until the end of May after which EM […]
6 charts from the past week that tell an interesting story in markets and investing… 1) A Billboard for Bitcoin Congress had 9 months to figure out the finer details of the second stimulus bill. So in typical fashion, they rushed a $900 billion bill to the floor last week that was nearly 6,000 pages […]
This week’s 5-Chart Friday is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. — 5 charts from the past week that tell an interesting story in markets and investing… 1) Asset Class Returns over the Last 10 Years These are the returns from […]
These are the returns from major asset classes over the last 10 years… What stands out? A few things: 1) Bitcoin, with an annualized return of over 200%, is in a different stratosphere. Bitcoin was trading at just 30 cents 10 years ago. Few had ever heard of it and fewer still owned it. This […]
There was a time long, long ago when Federal Reserve meeting announcements would come a surprise to market participants. They might cut rates. They might hike rates. You just didn’t know. That has all changed. Since June 2009, there have been 91 FOMC Meetings… Before 79 of those meetings, the market was pricing no change […]
Over the last 20 years, long-term bonds have outperformed stocks (350% vs. 284%). Needless to say, this outcome will come as a surprise to many… (Note: in this post I’m using the S&P 500 Index Fund (VFINX) as the proxy for “stocks” and the Vanguard Long-Term Investment Grade Bond Fund (VWESX) as the proxy for […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Zoom an 8 to 80 Brand? “Let’s Zoom.” 2020 was the year that Zoom became a verb, providing an easy-to-use service that became an essential part of everyday life. In April, daily Zoom meeting participants surged to 300 million, up from […]
Let’s run through some questions and answers to parse out where we are with the virus and where we may be headed… 1) Is the prevalence of the virus rising or falling? In the US as a whole, it is rising. New cases continue to hit new highs, averaging 209,951 per day over the past […]
The S&P 500’s P/E ratio has moved from 20.6 at the start of 2020 to 30.3 today, on pace for the highest year-end multiple in history. How is this possible in a year with a global pandemic and the largest economic contraction since the Great Depression? Investors are anticipating much brighter days ahead, with the […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Dashing to 100x The DoorDash ($DASH) IPO this week did not disappoint, propelling the company to a market cap of more than $60 billion. That’s over 100x higher than its private market valuation back in 2015… Few companies have […]
Let’s run through some questions and answers to parse out where we are with the virus and where we may be headed… 1) Is the prevalence of the virus rising or falling? In the US as a whole, it is rising. We are now past the data interruptions from Thanksgiving and new cases continue to […]
Snowflake’s price to sales ratio just hit 245 (using TTM sales of $490 million). With a current market cap of $120 billion, this begs the question: has there ever been a company in history as large as Snowflake with a higher valuation? I don’t believe so. Back in the dot-com mania, Cisco briefly hit a […]
A monthly update of the Compound 8 to 80 Portfolio… Performance Review The 8 to 80 Portfolio gained 5.25% (net of fees) in November. The broad equity markets surged higher during the month with positive vaccine news from Pfizer and Moderna providing a hopeful light at the end of the tunnel. Investors are also anticipating another round of […]
2020 has become a boom year for IPOs, and it’s not over yet. In the next few weeks Airbnb (ABNB), Doordash (DASH), Wish (WISH), and Roblox (RBLX) are all expected to go public. In November, we saw the highest number of new IPO filings in the last 20 years. Why are companies rushing to cash […]
Let’s run through some questions and answers to parse out where we are with the virus and where we may be headed… 1) Is the prevalence of the virus rising or falling? In the US as a whole, it is rising. We are moving past the data interruptions from Thanksgiving and new cases continue to […]
This week’s 5-Chart Friday is sponsored by YCharts. Mention Compound to receive 20% off your subscription when you initially sign up for the service. Enabling smarter investment decisions & better client communications. — 5 charts from the past week that tell an interesting story in markets and investing… 1) Top 30 Stocks Over the Last 30 […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Shopify an 8 to 80 Brand? Shopify is used by over 1 million businesses in 175 countries around the world. Its user-friendly interface allows anyone to set up an online store. With Shopify POS, merchants can also sell their products in […]
Here are the top 30 stocks in the S&P 500 over the past 30 years… These companies have delivered unfathomable returns to their shareholders. They have also delivered many periods of excruciating pain for anyone able to stick with them. When thinking about big winners in the stock market, excruciating pain probably isn’t the first […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Dow 30,000 The Dow crossed above 30,000 this week for the first time. A look back at other 1,000 point milestones through the years… 2. Airline Travel Slowly Coming Back Last Sunday (11/22) we saw more than 1 million […]
On March 16, the Volatility Index (VIX) closed at 82.69, a record high. All of the news that day was bad news and it seemed like that would never end. I wrote a post at the time… “When all news is bad news it can seem as if it will be that way forever. But […]
If you’re around markets long enough, you’re bound to see some crazy things. Manias. Crashes. Negative interest rates. Negative crude oil. The list goes on and on. But what we saw this week in something called the Litecoin Investment Trust ($LTCN) just may be the craziest thing you will ever see. The trust closed on […]
Studying market history is a worthy endeavor for investors. It can provide instructive parallels, much needed context, and reassurance during difficult times that “this too shall pass.” Problems arise, however, when one assumes that the range of possible outcomes in the future are limited to what has happened in the past. There is no better […]
A new series covering companies in the Compound 8 to 80 Portfolio… 1) Why is Spotify an 8 to 80 Brand? With 320 million monthly active users and 144 million subscribers, Spotify is available in 92 countries and used by people of all ages. At 35% market share, Spotify is currently the world’s biggest music streaming […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Vaccine Déjà Vu For the second week in a row, amazing vaccine news came at the start of the week, this time from Moderna (phase 3 trial showing its vaccine reduced risk of infection by 94.5%). Moderna’s stock ($MRNA) […]
The is a story about belief. But first, let’s do a little time traveling… 1) It’s July 2010. Bitcoin is trading at 5 cents. What’s a Bitcoin? 2) It’s February 2011. Bitcoin is trading at $1.10, a 2,100% increase in 7 months. This is what the chart looks like… What’s the first word that comes […]
In December 2008, as the “world was ending,” US junk bonds hit a record high yield of 23.26%. Forecasts of financial Armageddon were widespread, and few could envision a scenario in which subordinated bondholders would receive anything but pain. Note: throughout this post, we use the ICE BofA US High Yield Index as the high […]
“A reader lives thousand lives before he dies. The man who never reads lives only one.” – George R.R. Martin A few years ago I started a book club with a few friends in town. Each month we gather to discuss a different book, but the conversations always meander between books, work, family, parenting, and […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Google an 8 to 80 Brand? “Just google it.” A phrase that has become synonymous with finding the answer to any question imaginable. Google is now estimated to control over 90% of the world’s search market, used by people of all ages. […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Vaccine Reversal The big news this week came early on Monday with reports of 90% effectiveness in Pfizer’s covid-19 vaccine. The initial reaction was a massive reversal in the “covid trade” with companies hurt most by the virus rallying […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Amazon an 8 to 80 Brand? Launched as a bookseller in 1995, Amazon has grown to become one of the most influential companies in the world, used by people of all ages in all walks of life. “I’ll just buy it on […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Apple an 8 to 80 Brand? Apple now has over 1.5 billion active devices worldwide, including 1 billion iPhone users. Its products are used by people of all ages, and it has become the most widely recognized brand in the world. 2) […]
The third wave of COVID-19 in the US continues, with an acceleration in recent weeks. Let’s take a closer look at what that means through a series of questions and answers… When did the 3rd wave begin? New cases started trending higher again in mid-September after falling for the two months prior. They hit their […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Call It a Comeback 661,000 jobs were added back in October, building on the gains from May through September. In February and March, 22.1 million jobs were lost and since then 12 million have been added back. This means […]
Our first monthly update of the Compound 8 to 80 Portfolio. Performance Review The 8 to 80 Portfolio declined 0.83% (net of fees) in October. The broad equity markets traded lower for the second straight month. There was a long list of explanations for the recent pullback in markets, including the covid-19 resurgence, lack of […]
It’s election night and many are worried about the future. Only adding to anxieties is the fact that both sides have painted a bleak picture of what America will look like if the other wins. I’m here to tell you they’re wrong. Life will go on, and things will get better. The election that seems […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Rising Volatility The Volatility Index ($VIX) hit 40 this week for the first time since June. The S&P 500 fell over 5% on the week, its largest weekly decline since March. What’s driving the recent increase in fear? Take […]
A new series covering companies in the 8 to 80 Portfolio… 1) Why is Netflix an 8 to 80 Brand? Netflix is increasingly becoming a part of every household, and its viewers span multiple generations, from Gen Z to Boomers… It is fast becoming a global brand, with international growth outpacing US growth over the […]
The third wave of COVID-19 in the US is here. Let’s take a closer look at what that means through a series of questions and answers… When did the 3rd wave begin? New cases started trending higher again in mid-September after falling for the two months prior. They hit their highest level ever this weekend […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Bonds Breaking Down? Long-term bond yields are creeping up, with 30-year treasuries at their highest levels since June. Why are yields rising? The combination of rising inflation expectations, a recovering economy, and the prospect of trillions more in debt to […]
In an investment world that is increasingly shifting towards passive index funds and ETFs, what’s the case for owning individual stocks? For Howard Lindzon (founder partner at Compound), the answer simple: do it for profit, and do it for joy. Howard has a unique view of the investing landscape, sitting at the intersection of private […]
It has become commonplace to compare covid-19 outcomes in one country to another. By now you’re all familiar with the arguments… “Country A did better. Country B did worse. Country A and their leaders should be praised; Country B and their leaders should be condemned.” Lost in these simplistic conclusions are the many important factors […]
5 charts from the past week that tell an interesting story in markets and investing… 1) If You Give It, They Will Spend It The boom in Retail Sales continues with new all-time highs and a September surge. The lesson: if you give the American consumer free money, they will spend it. The recessions of yesteryear […]
5 charts from the past week that tell an interesting story in markets and investing… 1) $27 Trillion and Counting… US National Debt has crossed above $27 trillion for the first time. A year ago it was below $23 trillion. As a percentage of economic output (GDP), our national debt has never been higher, steadily […]
US National Debt has crossed above $27 trillion for the first time. A year ago it was below $23 trillion. As a percentage of economic output (GDP), our national debt has never been higher, steadily increasing over the past 40 years… 1980: 31% 1990: 52% 2000: 58% 2010: 87% Today: 138% Why is the ratio […]
5 charts from the past week that tell an interesting story in markets and investing… 1) US Jobs Comeback Continues, Slowly 661,000 jobs were added back in September, building on the gains from May through August. This was the smallest rate of change since February, but still a very large move in any historical context. […]
5 charts from the past week that tell an interesting story in markets and investing… 1) The Other Side of Mania What follows a mania? Investors in Nikola are slowly finding out, with the stock now down 83% from its high in June. 2) Nothing Easy About Investing Remdesivir has been widely regarded as one […]
Over the past 40 years, there has been a one-way trend in US Treasury Bond Yields: down. US 10-Year Treasury Yield…September 1980: 11.6%September 1985: 10.4%September 1990: 8.9%September 1995: 6.2%September 2000: 5.9%September 2005: 4.3%September 2010: 2.8%September 2015: 2.2%September 2020: 0.7% — Charlie Bilello (@charliebilello) September 18, 2020 If you’re a bond investor, that has been a […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Snowflakes and Bubbles Snowflake ($SNOW) went public this week as the largest software IPO ever. On its first day of trading it reached a market cap high of over $88 billion, trading at an astounding 219x sales. In a […]
“Ask no questions, and you’ll be told no lies.” – Charles Dickens, Great Expectations What returns are you expecting from equities going forward? “At least 20% a year.” That was a conversation I had last week with an investor. It gives you an idea where we are in terms of sentiment. How did they arrive […]
Snowflake went public today. Who? Snowflake, a cloud-based data storage and analytics company. You had me at “cloud.” What’s the ticker? $SNOW. Awesome, catchy and easy to remember. Are they profitable? No. They lost $349 million in the fiscal year ending in January and $171 million in the first six months of this year. Even […]
Peloton reported earnings this week and in after hours trading its market cap moved above $26 billion, nearly as high as Ford. A year ago Peloton went public with a market cap of $7 billion. After posting this chart on twitter, the responses can be summarized as follows: “Ad hominen insult. Ford is going to […]
5 charts from the past week that tell an interesting story in markets and investing… 1) End of a Trend? The Nasdaq 100 ETF closed below its 50-day moving average today for the first time since April, ending one of the longest runs ever. It is now down over 10% from its recent high, marking […]
5 charts from the past week that tell an interesting story in markets and investing… 1) From Fear to Greed From extreme Fear in March to extreme Greed today. The equity put/call ratio (a ratio of bearish option bets to bullish option bets) has never been lower… We haven’t seen a mania like this since […]
5 charts from the past week that tell an interesting story in markets and investing… 1) How Do You Like Them Apples? Apple is now a $2 trillion company, adding $1 trillion to its market cap over the last year. $AAPL How big is $2 trillion? Who will be the first to $3 trillion? The […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Rising … Inflation? Deflation has been the buzzword nearly all year, particularly from the Fed in justifying their extraordinary easing measures. So it might come as a surprise to see US inflation expectations rising in a vertical fashion. At […]
July was a tough month for COVID-19 in the US, with both infections and deaths moving significantly higher. But there are some positive signs that indicate we may be turning the corner. Let’s take a closer look… 1) New Cases Trending Lower New cases in the US peaked on July 23 at a 7-day average […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Apple Mania Investors can’t seem to get enough Apple, driving its shares to new heights each and every day. Its market cap is fast approaching $2 trillion. A year ago it stood at $890 billion. Apple’s stock is up […]
5 charts from the past week that tell an interesting story in markets and investing… 1) The Amazon Economy It’s hard to imagine a scenario that would have benefited Amazon more than forcing brick-and-mortar stores to close and telling people to stay home. And benefit they did, with 40% revenue growth in the past year, […]
How quickly things change. Back in March, there were widespread fears of a second Great Depression. A few months later, as stocks surged, everyone was talking about the “v-shaped recovery.” What does the data suggest? Let’s take a look. First, we need to put the pre-covid economic environment in context. In February when the economy […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Great Expectations Tesla reported earnings this week with high expectations going in. A year ago, the stock was trading at less than 2x sales. Before earnings, it was trading at an incredible 12x sales, with its stock up over […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Bonds for the Long Run? Total returns over the last 20 years… US Stocks: +227% Long-term US Corporate Bonds: 378% Corporate bonds yields were at 8% 20 years ago. Today they’re at 2.05%, an all-time low. The future is […]
5 charts from the past week that tell an interesting story in markets and investing… 1) The Big 4 On March 9, 2009, the combined market cap of Apple, Microsoft, Google (Alphabet), and Amazon was $326 billion. Their combined market cap today: $5.77 trillion, up more than 17x since 3/9/09. 2) Dividends … Down S&P […]
Your home is your castle, and if you’re like most Americans, it is also the largest component of your net worth. Naturally, you would like to see your home appreciate in value over time. But how much would be a reasonable expectation? Let’s take a look at history… Since 1891, U.S. home prices have increased […]
Put these charts on your wall for reference the next time you think… Stocks can’t go up during a recession… It’s “oversold” or “at support” and has to bounce… It’s “overbought” or “at resistance” and can‘t possibly go higher… Investors are rational and would never pay $239.50 for something worth $22.83… It can’t go below $0… Interest rates can’t go […]
5 charts from the past week that tell an interesting story in markets and investing… 1) The King of Buybacks Apple has bought back $338 billion in stock over the past 7 years, which is greater than the market cap of 492 companies in the S&P 500. 2) Top S&P 500 Stocks … Last 20 […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Dow Winners and Losers… It’s a tale of sectors in the Dow this year. Large tech names (Microsoft and Apple) are acting as if they are immune to recession while the shutdown has hit Industrials (Boeing, Raytheon), Energy (Exxon […]
Talk of a “second wave” of COVID-19 in the US has begun. Why? Let’s take a closer look through a series of questions and answers… What’s going on with new cases? New daily cases in the US hit their highest level ever yesterday (38,672), surpassing the prior high from April 25 (36,006). But I thought […]
In 2000, the dot-com bubble began to burst. Tech stocks finished the year down 42%. (note: using S&P 500 technology sector ETF ($XLK) as a proxy for the tech sector.) In 2001, the recession officially began, and tech stocks finished down 23%. In 2002, the carnage finally ended, but not before another 38% decline. The […]
5 charts from the past week that tell an interesting story in markets and investing… 1. The Worst Risk/Reward in History? Yields on investment grade US corporate bonds hit a new all-time low this week: 2.23%. 2. The Irrational Investor Would you pay someone $205 for an asset worth only $21.87? Investors in the Ethereum […]
Would you pay someone $205 for an asset worth only $21.87? Of course not; what a ridiculous question. And yet, investors in the Ethereum Trust ($ETHE) are doing just that, paying a stunning 837% premium above the net asset value (NAV) of the underlying holdings (Ethereum, a cryptocurrency). Why would anyone do such an irrational […]
There’s been a lot of confusing reports lately on COVID-19. Some are saying the worst is over while others are saying a second wave is coming that will be worse than the first. Let’s run through some questions and answers to parse out where we are with the virus and where we may be headed… […]
5 charts from the past week that tell an interesting story in markets and investing… 1. From Nikola to … The mania is back, this time in a company called Nikola ($NKLA), named after famous inventor Nikola Tesla. Hyped as a potential competitor to Tesla, the hybrid truck design company’s stock has skyrocketed. On Tuesday, […]
Non-taxable stimulus checks, extra unemployment benefits paying many workers more than when they were working, forgivable loans for small business, grants and loans for large corporations, payments to state and local governments, grants for healthcare providers, and more. “How are we paying for all of this?” I’ve been getting this question more and more lately. […]
The yield on investment grade corporate bonds has moved all the way down to 2.35%. If the month ended today, that would be the lowest monthly close in history. Why is this important? Because the single best predictor of future returns for bonds are its starting yield. On average, the higher the starting yield, the […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Winners and Losers The best and worst performing stocks in the S&P 500 and Russell 1000 this year… 2. Jobs Coming Back … Slowly The US Unemployment Rate moved down to 13.3% in May from 14.7% in April. The […]
High Yield credit spreads are lower today than they were during market corrections in 2011 and 2016. The same is true for Investment Grade credit spreads. Why is this notable? There were no recessions in 2011 or 2016 and today were are faced with what could be the largest economic contraction since the Great Depression. […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Mortgage Rates at Historic Lows The 30-Year Mortgage Rate in the US hit another all-time low this week: 3.15%. 2. 81 … As in 81 Central Banks around the world cutting interest rates thus far in 2020. We’ve never […]
What were your new year’s resolutions entering 2020? If you’re like most people, your list probably included at least one of the following: Lose weight. Get back in shape. Eat healthier. Be less stressed. Get more sleep. Spend more quality time with your family. Get out of debt, save more. Read more. Learn something new. […]
As Americans celebrate Memorial Day this weekend, we honor all those who served and paid the ultimate price in the name of freedom. This year, we find ourselves fighting a different kind of war. It’s most certainly a world war, but one very different from the last. From its start in 1939 to its end […]
5 charts from the past week that tell an interesting story in markets and investing… 1. $7 Trillion and Counting The Fed’s balance sheet moved above $7 trillion this week for the first time, with $2.9 trillion in asset purchased in just the last 3 months. In 2008, the Fed increased its assets by over […]
If the dichotomy between markets and the economy has left you dazed and confused, you’re not alone. For on one side of the ledger, you have… 16.5% of the US labor force on unemployment, the highest on record (data back to 1967). US Employment to Population Ratio down to 51.3%, a new low. The prior […]
Surreal. In driving through Manhattan a few weeks ago, that’s the only way I could possibly describe it. Stores closed. Streets empty. Sounds of silence. Even the crossroads of the world, Times Square, was desolate. As a lifelong New Yorker, it felt like a dream. A dream that has now lasted for nearly 2 months. […]
5 charts from the past week that tell an interesting story in markets and investing. 1. Industrial Production US Industrial Production is down 15% year-over-year. Capacity Utilization Rate fell to 64.9%, lowest level on record (data back to 1967). 2. Retail Sales US Retail Sales are down 17.8% year-over-year, largest decline on record (data back […]
5 charts from the past week that tell an interesting story in markets and investing. 1. US Unemployment Highest since Depression US Unemployment Rate moves up to 14.7%. The peak % in prior recessions…2007-09: 10.0%2001: 6.3%1990-1991: 7.8%1981-1982: 10.8%1973-75: 9.0%1969-70: 6.1%1960-61: 7.1%1957-58: 7.5%1953-54: 6.1%1948-49: 7.9% pic.twitter.com/5VuZB958WV — Charlie Bilello (@charliebilello) May 8, 2020 US Employment to […]
5 charts from the past week that tell an interesting story in markets and investing. 1. 1 out of 3 … on Facebook 1 out of 3 people on the planet are now using using facebook on a monthly basis. 2.6 billion MAU / 7.8 billion global population = 33.33% Facebook Monthly Active Users, Billions […]
5 charts from the past week that tell an interesting story in markets and investing. 1. Unemployment Rising at Record Pace 12.5% of the labor force in the US is on unemployment as of the end of last week. 2. Pizza vs. Software Software is eating the world and the world is eating pizza. Two […]
5 charts from the past week that tell an interesting story in markets and investing. 1. Bank Earnings Crushed Bank Earnings…$C: $2.5b profit (-46% YoY), added $7b to loan loss reserves$BAC: $4b profit (-45% YoY), $3.6b loan reserves$GS: $1.2b profit (-46% YoY), $937m loan reserves$WFC: $653m profit (-89% YoY), $3.1b loan reserves$JPM: $2.9b profit (-69% […]
5 charts from the past week that tell an interesting story in markets and investing. 1. Good Friday New York COVID-19 hospitalizations continue to trend lower… 2. Forza Italia Italy reported the lowest number of new COVID-19 cases since March 13 (3,039), 7-day average lowest since March 13-19. (See related post) 3. One Downtrend We […]
Italy. No country has been hit harder by this virus. The bad news there has been unrelenting, day after day, week after week. It almost seemed as if it would never end. But alas, there is a glimmer of hope. I’ve been tracking the number of new COVID-19 cases in Italy, and over the past […]
5 charts from the past week that tell an interesting story in markets and investing. 1. A Turn for the Better in Hard-hit Italy 🙏 Italy has reported an average of 4,428 new COVID-19 cases over the last 5 days, the lowest 5-day average since March 15-19. Hoping and praying this continues… 2. Crude Oil […]
Test, test, test. That has become the mantra in battling the novel coronavirus. The more testing we do, the more information we have, and the better decisions we can make about the best way to move forward. This is a sensible strategy, but only testing the sickest among us is giving us incomplete information, and […]
5 charts from the past week that tell an interesting story in markets and investing.. 1. Big Swings Continue The Dow was up 11.37% on Tuesday, its 4th largest gain in history (see recent post). If we look back at the top 25 daily gains historically, 15 occurred during the Great Depression (August 1929 – […]
Hope “Hope is the thing with feathersThat perches in the soulAnd sings the tune without the wordsAnd never stops at all.” – Emily Dickinson One month ago, Wuhan and the Hubei Provence were the epicenter of the coronavirus outbreak. In the past week, new reported cases there have moved down to zero. In broader China, […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Back to 0% In a 2nd emergency cut, the Fed moved 100 bps to bring interest rates back down to an all-time low of 0.00-0.25%. Other Central Banks cutting rates this week: New Zealand, Canada, Norway, UK, Australia, South […]
I’m interrupting your regularly scheduled programming of the coming apocalypse to bring you some encouraging news… The world is not coming to an end – not by a long shot. We are figuring this thing out, and faster than anyone could have ever predicted. In South Korea, they have been testing 20,000 people per day […]
The Volatility Index (VIX), also known as the “fear index,” ended today at 82.69. Since its inception in 1990 it has never had a higher close. When was the previous record? November 20, 2008. In the midst of the Global Financial Crisis, after the Lehman Bankruptcy, and 11 months into the worst recession since the […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Oil Crashes Crude Oil fell over 24% on Monday, the 2nd largest 1-day decline in history. Energy stocks fell in tandem, with the largest 5-day decline for the Energy sector ever ($XLE -34.6%). 2. Remember Tilray? It’s now down […]
5 charts from the past week that tell an interesting story in markets and investing… 1. New All-Time Low in Mortgage Rates It’s official… The 30-Year Mortgage Rate in the US hit a new all-time low this week: 3.29%. 2. Let the Easing Begin… In the first emergency move since 2008, the Fed cut rates […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Volatility Returns This was the largest weekly spike in the history of the Volatility Index. +135% (Note: VIX started in 1990). 2) Historic Decline in Dow The Dow declined 13% over the past 6 trading days. Going back to […]
This is a story many of you will be familiar with. You have money to invest that’s been sitting in cash. This is money you don’t expect to need or access for more than 20 years, if ever. You know that cash is likely to significantly underperform a diversified investment portfolio over the next 20+ […]
5 charts from the past week that tell an interesting story in markets and investing… 1) 1.90% … for 30 Years? The 30-Year US Treasury Yield closed at an all-time low today: 1.90%. On October 26, 1981, it closed at an all-time high of 15.21%. My how times have changed. 2) Software is eating the […]
5 charts from the past week that tell an interesting story in markets and investing… 1) Growth vs. Value The ratio of growth stocks to value stocks is at its highest level in 19 years. The top 10 holdings in the large cap growth ETF (IWF)… The top 10 holdings in the large cap value […]
When investors think about risk, 2008 is usually the first thing that comes to mind. And for good reason. It was the worst year that most investors alive today have ever experienced. With dividends included, the S&P 500 lost 37% in 2008, its largest decline since 1931 (during the Great Depression). Since the end of […]
5 charts from the past week that tell an interesting story in markets and investing… 1) All-Time Highs … Again Well, that was quick. After a brief 3% pullback on “coronavirus concerns,” the S&P 500 and other major US indices rocketed back to new all-time highs this week. For the S&P 500, it was the […]
5 charts from the past week that tell an interesting story in markets and investing… 1. Copper and Coronavirus Down 12 days in a row, this is the longest down streak in history for Copper (data going back to 1971). Who is the largest importer of Copper? You guessed it … China. Fears about the […]
What returns are you expecting from bonds over the next five years? If you’re like most investors, your answer is probably too high. Why? Because of something called recency bias, the human tendency to give more weight to the recent past in making projections about the future. And why is that a problem today? Because […]
What brings meaning to your life? There’s no more important question. But how often do we take the time to sit and actually think about it? Days turn into weeks, weeks turn into months, and months turn into years. ‘We’ll focus on it tomorrow; there’s still plenty of time.’ And so the question remains, burning […]
Here are the charts and themes that tell the story of 2019… I. From Humble Beginnings “Bear Market. Inverted Yield Curve. Trade War. Government Shutdown. Recession.” These were just a few of the ominous buzzwords heard at the start of 2019. The S&P 500 had just suffered its worst December since the Great Depression (-9%) […]
1) Be humble or the markets will eventually find a way to humble you. Having more confidence is a good thing in many areas of life. Markets are not one of them. More confident investors tend to trade more and take on undue risk, leading to worse performance. Men are generally more confident in their […]
Compounding. It’s more than just an investing concept. It’s the idea that exponential growth is possible in many of the most important areas of life. Love and relationships, health and fitness, knowledge and wisdom, mindfulness and spirituality – all have elements that can benefit from the power of compounding. In investing, the formula for compounding […]