Investors can generally make money following the day’s headlines. But it often also pays to consider alternative scenarios. Right now, inflation is coming down on a year-over-year basis. But what if it were to surge higher?
With inflation expectations now at 20 year lows, it’s a reasonable question to ask. A surge in oil prices, or a resurgence of supply chain problems, could see inflation bump meaningfully higher, even with interest rates well off of zero percent.
Given what we’ve seen in the markets over the past few years, traders should be mindful of that kind of tail risk. It’s not the kind of thing to bet heavily on, at least for now. But it does suggest that having some hedge trades in place, such as gold, could be prudent here.
Now here’s the rest of the news:
Are You Ready For A Real Recession?
In a real recession, what seemed safe and rock-solid vanishes. We haven’t had a real recession in forty years (1981-82) and so only those who were there will know how fast things can unravel. What’s a real recession? It’s… [Read Here]
May 19, 2022
The past few days have been tough for investors in retailers. That’s because these companies have reported either lower sales, reflecting a slower economy, or a lower profit margin. The latter case is likely the impact of inflation.
While many companies can increase prices or lower quality to pass on the costs of inflation to consumers, retailers aren’t so lucky. Inflation may mean that the $100 spent at a place like Target (TGT) is buying fewer goods than before. It’s no surprise, then, that shares dropped 25 percent following its poor earnings and lowered profit margins.
Investors need to be mindful of where rising prices are beneficial, like say for energy companies, and where they’re harmful, such as in a sector like retail with little pricing power.
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Americans’ Standard Of Living Takes A Nosedive
Most Americans didn’t understand that the exceedingly foolish decisions of our leaders would eventually have a major impact on how they live their lives every single day. But there are some of us that did. Many of us literally begged our politicians to stop… [Read Here]
The Fed Caught In Another Massive Lie
On May 4, the Fed released its plan to achieve balance sheet reduction of $60 billion a month in Treasuries and $35 billion a month in MBS. The following chart shows their plan is bogus. To understand why, please consider the Fed’s Plans for… [Read Here]
May 19, 2021
Jeff Bezos, Bill Gates, Mark Zuckerberg and Larry Ellison have all been unloading shares of their respective companies. Year-to-date, these and other ultra-wealthy have sold off about $24.4 billion in shares.
While this may sound like a sign of an imminent market crash, most of these sales are based on previously-disclosed plans. Most of these billionaires have the bulk of their net worth in shares of the companies they founded. But with Bezos and now Gates splitting up assets in a divorce, and Zuckerberg doubling his Hawaiian real estate holdings, it’s clear the cash has to come from somewhere. Insider sales can occur for a number of reasons, which is why we stick with insider buys as a better market indicator.
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Dollar Abandonment May Signal the End of Global Reserve Status
In 2020, the U.S. dollar’s share of global currency reserves shrunk to an all-time low. That means America’s losing one huge advantage it has against other economies. Here’s what comes next… [Read Here]
May 19, 2020
I hope you had a great weekend. It’s great to see people out and about, masked or not. I happen to live where things are opening up more quickly, and I have to tell you, it’s a relief. The only problem is that what is true for one, is not true for the whole. The fallacy of composition across states is leading to a lot of uncertainty. That uncertainty is what’s holding the bulls at bay. There needs to be another bullish catalyst or the bears will want to come out of quarantine as well.
In Other News:
I think my reader is spot on in identifying utilities as a viable alternative for income. Within the universe of equity income stocks, utilities are the safest. Demand for essential services such as electricity and water won’t disappear as a result of the virus. Energy consumption may wane for a while, but it will rebound as soon as the economy opens back up.
May 19, 2019
HOW TO BEAT PROCRASTINATION — a few tips…
What really seems to work, though… what you really need to be doing is to:
Do it now. This seems obvious, and it’s not that we don’t know that we should do things now. The problem is that we don’t know how. Here are some techniques to get to now and beat procrastination.
Set aside blocks of time to DO things. Just like you schedule time to go to attend business meetings, exercise, etc., the same principle applies to other things you might procrastinate. Pick an hour a day to get things done.
If it comes to mind, then do it. Scheduling time to DO things is important. But if something comes to mind randomly, do it when you think of it (assuming that you have time). For example, if you’re sitting down reading a book or watching a show and you’re reminded that you need to do a chore, stop what you’re doing and do it.
Use a timer to bring you back to reality. One way to keep on track is using a timer. On one hand, you can use the timer to set aside a work block. People generally work more focused and with a sense of urgency. On the other hand, when the timer goes off (after, say, 30 minutes), ask yourself it you’re doing what you’re supposed to be.
Do not multitask. A lot of people say they’re great at doing many things at once. The reality, though, is that they’re usually great at starting many things at once… but never actually doing any/all of them (or at least very well). Most people need to focus on one thing at a time — to do it well and to get it done.
Eliminate distractions. Distractions feed procrastination. Eliminate them. Remove clutter from your workspace. Tum off notiﬁcations. Leave your phone in a drawer. Only keep essential programs open on your computer. Don’t turn on the TV.
Compare your actions with your values. It doesn’t matter what we say is important. The things that are priorities in our lives are the things we actually do. How does what you do mesh with what you believe? If you say that getting out debt is important, are you actually doing the things that will get you out of debt? If you say that getting in better shape is important, is choosing TV over exercise going to help? Is that fast food meal really the best choice?
To Our Better Choices…