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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
Snowflake’s price to sales ratio just hit 245 (using TTM sales of $490 million). With a current market cap of $120 billion, this begs the question: has there ever been a company in history as large as Snowflake with a higher valuation? I don’t believe so. Back in the dot-com mania, Cisco briefly hit a […]
Here are the top 30 stocks in the S&P 500 over the past 30 years… These companies have delivered unfathomable returns to their shareholders. They have also delivered many periods of excruciating pain for anyone able to stick with them. When thinking about big winners in the stock market, excruciating pain probably isn’t the first […]
If you’re around markets long enough, you’re bound to see some crazy things. Manias. Crashes. Negative interest rates. Negative crude oil. The list goes on and on. But what we saw this week in something called the Litecoin Investment Trust ($LTCN) just may be the craziest thing you will ever see. The trust closed on […]
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 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 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 […]
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 […]
“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 […]