The reason for the complacency about the national debt can it part be attributed to an Australian economist named Bill Mitchell. In 1990, Mitchell coined the term Modern Monetary Theory or MMT1. MMT as an idea is starting to make a resurgence in economic circles. Once you understand what it means, hopefully you will think this theory is as ill-concevied as we think it is.

This post is a synopsis of our 'fearless outlook' for the US Equity Markets in 2019.

I’ve been at the business of investing money for clients and myself for 27 years - almost to the day.  I didn’t know it then but after my first five years as a stock broker (now I own my own asset management shop) I really didn’t know as much as I thought I did about the capital markets and after ten years in the business I figured out that I was still just a neophyte.  Ten years into my career the tech wreck that started in March of 2000 was well underway.  I can make a case that the bear was actually born in April of 1998 but that’s a sto...

A well constructed bond portfolio can stand-alone as a total portfolio or as part of a broader asset allocation strategy. There are many reasons that an investor might choose to allocate some or all of their investment capital to fixed income securities. Investors usually invest in bonds to either provide a predictable stream of income, fund a known liability at a known future time or as part of an overall asset allocation strategy that is designed take the volatility out of an equity portfolio. In today’s low interest rate environment a hi...

In today’s low return environment, investors are scrambling to find higher yielding investments in order to fund future or a current liabilities like retirement, the purchase of a second home, or a college education.  A quick glance at the chart above should point out the obvious to anyone who doesn’t already know it yet.  Interest rates are low by historical standards.  To make matters worse, many investors are still licking their wounds from the tech wreck and the bursting of the housing bubble of the first decade in the new century.  The...

 It ain’t what you don’t know that gets you into trouble.  It’s what you know for sure that just ain’t so.

-Mark Twain

I recently got around to watching The Big Short.  I thought the movie was so good that I immediately downloaded the book to my Kindle.  For anyone who hasn’t seen the movie or read the book I would certainly put both at the top of your summer list.  The Mark Twain quote above was on the screen at the beginning of the movie.

The Big Short chronicles the events leading up to the bursting of the Housing Bubble...

Whether your game is growth or value, momentum, low volatility or indexing, strategies with strong academic underpinnings generally work out if they are implemented properly and if they are given enough time.  The problem though is that human beings aren’t generally wired with the right personality traits required to make money in stocks.  We tend to become impatient and chase yesterday’s hot strategy just at the peak or bail out on a short term under performer right before the turn.  With the constant bombardment of financial noise in the...

Some years back I used to enjoy reading a research report that was published periodically by Credit Suisse called “Better than Bonds”.  The concept of the report was fairly straight forward as I remember it.  At the time, dividend yields on many high quality stocks were the same as or greater than the yields on the same bonds.  Therefore, if an investor was willing to buy a portfolio of the corporate debt of these financially sound companies, why not just buy the same stocks instead? The dividend yields on the stocks were higher than the yi...

It’s been well publicized that the month of January 2016 was not the worst January in history for US equities - it was the second worst.  The interesting thing though, is how vocal the perma bear community has become - after the fact.  There are many bloggers out there who have been ‘telling us so’ since 2009 and they seem to be getting louder after the recent markdown.  Some of the prognostications that we have read lately call for a bear market that will dwarf the 2007 to 2009 bear market and there are calls for the price of oil to drop t...

Nobody can predict the future with absolute certainty – nobody.  However, in this business, we deal in probabilities, then we monitor and adjust.  Therefore the astute analyst should be able to explain the situation on the ground and form an educated opinion about the future.  The chart above shows the return of the Dow Jones US Value Index relative to the return of the Dow Jones US Growth Index.  When the line in the top pane is rising then the value index is outperforming the growth index and vice versa.   This concept is known...

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