Interest rates are edging up. For the time being, stocks are staying ahead of bonds in the investment war. Historically, stocks earn 3.3% more than bonds over time. However, investors have gotten used to a much better ROI in the stock market over the last decade. We are looking at risk-adjusted investments for the next decade interest rates go up and the stock market adjusts. Many investors have chosen to invest by buying ETFs that track the S&P 500. This puts them at risk in a stock market that will perform differently over […]
The pandemic has driven business and social communications onto the internet. This movement was already well underway but has been hastened by the need for social distancing. Companies that work in this sector have benefitted from the current crisis while face to face companies like restaurants, entertainment, and travel have suffered. Although grocery stores and pharmacies have stayed open, home delivery has boomed. The pandemic is not going to suddenly stop and many of the new ways of doing things are efficient. Thus we do not expect a return to “normal” when the virus lets up. Rather we expect to see a new normal and there is where we will find many covid-19 era investment opportunities.
The twin shocks of the coronavirus and the oil price war have hit the market hard. How far could stocks fall? With the possibility of more market weakness in mind, we look back at the 1929 stock market crash leading up to the Great Depression for indications of what is to come.
The Stock Market Crash that Ended the “Roaring Twenties” Stock Market
The 1929 stock market crash that ushered in the Great Depression was not a one day event and was not confined to October of 1929. There was a 10% correction of the market in […]
The forced holiday that China has experienced due to the
coronavirus has been compared to the entire US workforce taking a two month
vacation! This means that China is producing less and that they are consuming
less as well. Commodities suppliers will be hurt as they sell fewer raw
materials to Chinese industry and foreign customers will not get the parts they
need to do their own manufacturing. So, will the coronavirus hurt corporate
earnings as it continues in China and spreads across the globe?
How Will the Coronavirus Affect the Stock Market?
CNN reports that
Goldman Sachs is warning of a stock market correction. At the root of […]
A good way to know when to sell a stock that is about to correct is to watch what the insiders are doing with their stock. In this regard, is it time to sell Amazon? In just the last week or so Jeff Bezos has sold $3.5 billion dollars-worth of Amazon.com stock. Is this an indication that the boss of Amazon.com thinks that is a good time to start taking a profit because the stock is about tank? Or does he simply have so much money that $3.5 billion is pocket change?
Investing in […]
Tesla is on a tear with the stock price up nearly three-fold in the last year. While some see this as a vindication of their faith in Tesla over the years, others see the most recent surge in Tesla’s stock price as a classic short squeeze. While Tesla has been going up, many traders have shorted the stock in expectations of a substantial correction. When that has not happened, they have had to buy the more-expensive shares to cover their positions, this has driven the stock price even higher. Here are our thoughts on investing and the Tesla short squeeze.
Despite virtually unending predictions of its demise, the bull market continues. It is tempting to compare the current situation to the dot com bubble at the beginning of the century. But, Mark Cuban, the billionaire who profited from the dot com bubble and was not destroyed by the crash says that this is a different market. There were more investors twenty years ago and interest rates were higher. And, people were buying any stock with dot com in its name! So, when will the stock market rally stop? Cuban says to watch interest […]
The World Bank warns that the current wave of borrowing is
the greatest since the 1970s. And, it brings with it the possibility of a
financial meltdown and that risk is only partially mitigated by persistently
low interest rates. As always, our concern is with the individual investor. How
will a global debt crisis affect your investing?
Will There Be a Debt Crisis?
CNBC reports on
the warnings of the World Bank of a global debt crisis.
World Bank has warned of the risk of a fresh global debt crisis, urging
governments and central banks to recognize that historically low interest rates
may not be enough to offset another widespread […]
There is pain in farm country this year. The weather was awful. China quit buying soybeans. And, now corn exports are down substantially. The strong dollar is to blame in the latter case. Why are agricultural investments hurt by the strong dollar?
Why Are Agriculture Investments Hurt by the Strong Dollar?
The other day President Trump chose to restore tariffs on steel from Brazil and Argentina according to the BBC. He did this to punish the two countries for having weakening currencies. The weaker currencies make their agricultural exports more competitive. And, that has reduced U.S. […]