All posts


Tuesday Trends (1/26/21)

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 […]

Read more

5-Chart Friday (1/22/21)

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 […]

Read more

The Price of Admission

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 […]

Read more

8 to 80 Spotlight: Netflix (1/20/21)

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 […]

Read more

When Secular Trends Reverse

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 […]

Read more

8 to 80 Spotlight: Nike

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) […]

Read more

The Beginning of the End of Covid-19

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 […]

Read more

5-Chart Friday (1/15/21)

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 […]

Read more

Tuesday Trends (1/12/21)

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 […]

Read more

Tesla and True Believers

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 […]

Read more

A Clear Signal of Insanity

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 […]

Read more

5-Chart Friday (1/8/21)

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 […]

Read more

Tuesday Trends (1/5/21)

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 […]

Read more

8 to 80 Monthly Update – December 2020

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 […]

Read more

2020: The Year in Charts

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 […]

Read more

6-Chart Saturday (1/2/21)

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 […]

Read more

20 Rules for Markets and Investing – 2020 Edition

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 […]

Read more

Tuesday Trends (12/29/20)

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 […]

Read more

6-Chart Saturday (12/26/20)

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 […]

Read more

5-Chart Friday (12/18/20)

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 […]

Read more

The Last 10 Years and the Next 10

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 […]

Read more

Tomorrow’s News Today

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 […]

Read more

Bonds for the Long Run?

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 […]

Read more

8 to 80 Spotlight: Zoom

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 […]

Read more

The Current State of Covid in the US (12/13/20)

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 […]

Read more

Pandemic + Recession = Multiple Expansion?

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 […]

Read more

5-Chart Friday (12/11/20)

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 […]

Read more

The Current State of Covid in the US (12/8/20)

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 […]

Read more

245x Sales: The Most Highly Valued Large Cap Company in History?

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 […]

Read more

8 to 80 Monthly Update – November 2020

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 […]

Read more

IPO Fever and a Look Back at IPOs Over the Last 10 Years

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 […]

Read more

The Current State of Covid in the US (12/5/20)

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 […]

Read more

5-Chart Friday (12/4/20)

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 […]

Read more

8 to 80 Spotlight: Shopify

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 […]

Read more

The Top 30 Stocks Over the Last 30 Years…

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 […]

Read more

5-Chart Friday (11/27/20)

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 […]

Read more

Thankful for Human Grit and Ingenuity

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 […]

Read more

The Craziest Thing You May Ever See in Markets

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 […]

Read more

Every Time is Different

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 […]

Read more

8 to 80 Spotlight: Spotify

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 […]

Read more

5-Chart Friday (11/20/20)

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) […]

Read more

Bitcoin, Bubbles, and Belief

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 […]

Read more

What Happens When High Yield Becomes Low Yield?

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 […]

Read more

Welcome to the Compound Book Club

“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 […]

Read more

8 to 80 Spotlight: Google

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. […]

Read more

5-Chart Friday (11/13/20)

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 […]

Read more

8 to 80 Spotlight: Amazon

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 […]

Read more

8 to 80 Spotlight: Apple

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) […]

Read more

Covid-19: The Third Wave Continues

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 […]

Read more

5-Chart Friday (11/6/20)

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 […]

Read more

8 to 80 Monthly Update – October 2020

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 […]

Read more

Everything’s Gonna Be Alright

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 […]

Read more

5-Chart Friday (10/30/20)

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 […]

Read more

8 to 80 Spotlight: Netflix

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 […]

Read more

Covid-19: The Third Wave

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 […]

Read more

5-Chart Friday (10/23/20)

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 […]

Read more

Introducing the 8 to 80 Portfolio

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 […]

Read more

The Many Problems With Covid Country Comparisons

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 […]

Read more

5-Chart Friday (10/16/20)

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 […]

Read more

5-Chart Friday (10/9/20)

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 […]

Read more

The One Constant: More Debt

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 […]

Read more

5-Chart Friday (10/2/20)

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. […]

Read more

5-Chart Friday (9/25/20)

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 […]

Read more

No Country for Old Yields

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 […]

Read more

5-Chart Friday (9/18/20)

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 […]

Read more

Great Expectations

“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 […]

Read more

Snowflakes and Bubbles

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 […]

Read more

Investing is Easy?

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 […]

Read more

5-Chart Friday (9/11/20)

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 […]

Read more

5-Chart Friday (9/4/20)

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 […]

Read more

5-Chart Friday (8/21/20)

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 […]

Read more

5-Chart Friday (8/14/20)

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 […]

Read more

COVID-19: Turning the Corner on the Second Wave

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 […]

Read more

5-Chart Friday (8/7/20)

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 […]

Read more

5-Chart Friday (7/31/20)

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, […]

Read more

The Shortest Recession in History?

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 […]

Read more

5-Chart Friday (7/24/20)

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 […]

Read more

5-Chart Friday (7/17/20)

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 […]

Read more

5-Chart Friday (7/10/20)

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 […]

Read more

How to Think About Home Price Appreciation

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 […]

Read more

Put These Charts on Your Wall … 2020 Edition

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 […]

Read more

5-Chart Friday (7/3/20)

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 […]

Read more

5-Chart Friday (6/26/20)

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 […]

Read more

COVID-19: Breaking Down the “Second Wave”

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 […]

Read more

Are Tech Stocks Immune to Recession?

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 […]

Read more

5-Chart Friday (6/19/20)

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 […]

Read more

Are Investors Rational?

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 […]

Read more

COVID-19 Q & A

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… […]

Read more

5-Chart Friday (6/12/20)

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, […]

Read more

$26 Trillion and Counting

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. […]

Read more

The Worst Risk/Reward in History?

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 […]

Read more

5-Chart Friday (6/5/20)

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 […]

Read more

What is Real?

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. […]

Read more

5-Chart Friday (5/29/20)

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 […]

Read more

Make a Habit of It

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. […]

Read more

War and Peace

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 […]

Read more

5-Chart Friday (5/22/20)

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 […]

Read more

Dazed and Confused

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 […]

Read more

New York Strong

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. […]

Read more

5-Chart Friday (5/15/20)

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 […]

Read more

5-Chart Friday (5/8/20)

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 […]

Read more

5-Chart Friday (5/1/20)

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 […]

Read more

5-Chart Friday (4/24/20)

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 […]

Read more

5-Chart Friday (4/17/20)

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% […]

Read more

5-Chart Friday (4/10/20)

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 […]

Read more

Life is Beautiful

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 […]

Read more

5-Chart Friday (4/3/20)

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 […]

Read more

How Anytown, USA Could Save the World

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 […]

Read more

5-Chart Friday (3/27/20)

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 – […]

Read more

Hope, Faith, and Destiny

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, […]

Read more

5-Chart Friday (3/20/20)

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 […]

Read more

Apocalypse Interrupted

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 […]

Read more

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 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 […]

Read more

5-Chart Friday (3/13/20)

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 […]

Read more

5-Chart Friday (3/6/20)

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 […]

Read more

5-Chart Friday (2/28/20)

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 […]

Read more

How to Think About Investing Cash on the Sidelines

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+ […]

Read more

5-Chart Friday (2/21/20)

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 […]

Read more

5-Chart Friday (2/14/20)

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 […]

Read more

The Price of Admission

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 […]

Read more

5-Chart Friday (2/7/20)

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 […]

Read more

5-Chart Friday (1/31/20)

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 […]

Read more

Bonds, Bubbles and Biases

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 […]

Read more

Having a Why to Live

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 […]

Read more

2019: The Year in Charts

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%) […]

Read more

20 Rules for Markets and Investing

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 […]

Read more

Compound Your Life

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 […]

Read more