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The Cardinal Sin Of Investing: Permanent Impairment Of Capital

How to avoid making it
Friday, September 15, 2017, 8:47 PM

Permanent impairment of capital is the cardinal sin of investing.

Well, today's markets present a clear and present danger of coming capital impairment for those who don't take prudent action in advance of a market downturn. Don't be guilty of inaction.

 
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Van Halen, M&Ms, And The Next Market Downturn

How watching the right indicators will avoid disaster
Friday, September 1, 2017, 7:28 PM

Believe it or not, the rock band Van Halen found a brilliant way to teach how having good indicators is key to achieving success.

This is extremely true for the world of investing, where you're deploying capital based upon an expected future return. How do you determine when it's a good time to enter into an investment? Once in it, how do monitor the conditions supporting your rationale for holding it -- are those changing? And if so, are they getting better or worse? When should you exit the position?

For all of these questions, the better the indicators you use, the more accurate and informed your decision-making will be. And the better your returns as an investor will be. » Read more

Podcast

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Brien Lundin: If They Don't Want You To Own It, You Probably Should

The wisdom (and challenges) of owning safe haven assets
Monday, August 14, 2017, 8:39 PM

One of the most perplexing mysteries to us is that right as the Federal Reserve embarked on QE3 -- which was a huge, enormous, $85 billion a month experiment -- commodities began a multiyear decline within two weeks of that announcement. Concurrently, the world’s central banks plunged the world into steeply negative real interest rates, a condition that has almost always resulted in booming commodity prices -- but not this time. Today, the ratio between commodity prices and equities is at one of, if not the most, extreme points in history.

To explain that gap, we talk this week with Brien Lundin, publisher of Gold Newsletter and producer of the New Orleans Investment Conference (where Chris and Adam are speaking on Oct 25-28): » Read more

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Off The Cuff: The Unsinkable(?) Market

No data is too bad enough to stop its rise
Friday, July 21, 2017, 2:06 AM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • The Unsinkable Market
    • No data is bad enough to stop its rise
  • The Disappearance Of Volatility
    • Gone, but for how long?
  • Failing Pension Plans
    • A truly massive crisis in the making
  • Cash, Gold & Bitcoin
    • The only places for capital to find safety?

During these doldrum days of summer, where no matter the news, today's "unsinkable" markets continue to march ever upwards, Mish shares his thoughts on what will finally cause asset prices to tank.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Hoping For A Market Crash

If we inflate much higher, the fall is likely to kill us
Thursday, July 28, 2016, 1:32 AM

We desperately need to have new national and global conversations about everything from how we’ll feed everyone in 2050, to developing a coherent sustainable energy policy, to the fact that each year is hotter than the year before, to the idea that we’re living with a soul crushing sense of scarcity in a world of abundance.

There’s lots that needs addressing, and the process should begin with letting go of the old narrative so that we can make space for assembling the new one. » Read more

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Why I’m Now Short The US Equity Markets

After 7 long years of waiting...
Tuesday, March 1, 2016, 12:55 AM

In the interests of full disclosure and of keeping you abreast of my personal investment actions, I entered a short position on Friday for the first time since 2009. Yes, it’s been seven years.

The equity markets have been all but bulletproof for 6 years, but I think that phase has ended and we’re in for a rough ride from here on out.  At least until stocks fall far enough for the central banks to have another go at attempting to print up prosperity.

First, I think that the stock rally of late is overdone and there’s more downside to come.  I have a whole host of supporting reasons based on credit markets and global trade, but we’ll get... » Read more

Podcast

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David Collum: The Next Recession Will Be A Barn-Burner

With very few places for capital to hide
Saturday, December 26, 2015, 9:05 PM

For those who enjoyed his encyclopedic 2015: Year In Review, this week we spend an hour with David Collum to ask: After processing through all of that information, what do you think the future is most likely to bring?

Perhaps it comes as little surprise that he sees the global economy headed back down into recession, one that will be deeper and more damaging than the 2008 crisis. » Read more

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Deflation Is Still Winning!

OK, folks: this is it
Monday, December 15, 2014, 9:20 PM

As we've written on and warned about before, deflation is winning.  We're starting to see very serious cracks in the façade, beginning with oil, then various peripheral currencies -- especially from emerging market oil exporters -- and now equities. » Read more

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Is This Decline The Real Deal?

Or just another head-fake bear trap?
Wednesday, August 6, 2014, 10:36 AM

Is this stock market decline the "real deal"? (that is, the start of a serious correction of 10% or more) Or is it just another garden-variety dip in the long-running Bull market? Let’s start by looking for extremes that tend to mark the tops in Bull markets. » Read more

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The Time For Shorting the Market Is Approaching

The dashboard of warning signals is getting bright
Wednesday, February 26, 2014, 8:55 PM

Executive Summary

  • Why stocks may average 0% return (!) for the next decade
  • The depressing data in
    • Retail sales
    • Housing
    • Manufacturing
    • Consumer confidence
  • Why the time to short the market is looking near

If you have not yet read The Stock Market's Shaky Foundation, available free to all readers, please click here to read it first.

To be sure, there is one piece of fundamental information that has supported equity prices; and that’s corporate earnings.

Those have vaulted to new highs, despite the weak economic recovery, on the back of ultra-cheap borrowing (which reduces interest costs which are deducted from earnings), government deficit spending, and low household savings:

While the parabolic rise in corporate earnings is quite impressive, they are also historically unprecedented and certainly unsustainable. 

When we look at the same chart seen above but on a percent change yr/yr basis we see that they have been slowing down remarkably and aren't that far above the zero mark... » Read more