Stocks have been trending up for the past few weeks. And with earnings season going fairly well, many traders may think the worst is over. Yet, with the Federal Reserve rapidly tightening monetary conditions, and with inflation still running rampant, we may yet see another leg down for the markets.
As with 2008, when the idea made the rounds that the pain in the subprime mortgage space was “contained,” there are any number of potential shocks to the economy that could cause the recent rally to stall. We may already see that with the number of chipmakers this week reporting lower guidance and warning on economic conditions.
Traders shouldn’t get too bullish in today’s conditions, and continue to look for ways to hedge or even play another market swing lower.
Now here’s the rest of the news:
Democrats prepare For Onslaught Of IRS Audits
As the Democrats’ spending plan moves closer to a House vote, one of the more controversial provisions — nearly $80 billion in IRS funding, with $45.6 billion for “enforcement” — has raised questions about who the agency may target for audits… [Read Here]
Watch: Experts Predict Wave Of “Zombie Company” Failures
‘Zombie companies’ — unproductive firms that cannot pay their debt interests — may finally be put to rest, as ongoing interest rate hikes constrict access to the easy credit that was their lifeline. Will workers and the wider economy pay the price? [Read Here]
August 10, 2021
For the first time since March 2020, Canada has opened up its border with the US. However, only vaccinated Americans will be allowed into the country, and a handy app will be used to track Americans. Adding in the number of companies requiring vaccine mandates or else potentially losing their job, corporate America is essentially creating a legal requirement for Covid vaccines, something that would face harsher scrutiny if a government did it.
This separation between those who have the vaccine and those who don’t – whether for personal, medical, or religious reasons, could potentially create economic drags on the economy. And corporate profits could be impacted by the cost of ongoing monitoring and compliance, to say nothing of any legal issues that could drag a company into court.
Now here’s the rest of the news:
Market In the “Biggest Bubble of My Career,” All-Star Investor Rich Bernstein Warns –Howard Schneider, Reuters
An Institutional Investor Hall of Famer recommends assets resistant to a high-inflation environment. “That would lead you most towards commodities, towards materials…” [Read Here]
August 10, 2020
While Congress couldn’t come together on another stimulus bill, it appears that the market is taking a measure of patience as Friday’s jobs numbers surprised with 1.76 million jobs added and a 10.3% unemployment rate.
The fact the S&P 500 is nearing an all-time high with a 10.3% unemployment rate and over a 30% decline in earnings for the S&P 500 is incredible. The only question is how long the patience will last.
Here is the rest of the story:
Fiverr Soars as Gig Economy Explodes –Jim Pearce
Of all the companies to become unexpected beneficiaries of the coronavirus pandemic, perhaps none is more surprising than Fiverr International (NYSE: FVRR). If you’ve never heard of Fiverr, that’s understandable. The company is based in Israel and provides an online marketplace for independent contractors to find work. Fiverr went public in June 2019 at $21 per share. After shooting above $44 during its first week of trading, FVRR spent the remainder of last year beneath $30. Last week, FVRR traded above $124 for a gain of more than 400% this year!
People don’t think much. They make snap decisions.
So let’s take another look at our presentations.
Are they even needed for small decisions?
Can we make them shorter?
Sustainable Rally or … House of Cards?
To understand why stocks have rallied despite economic catastrophe, I delved last night into one of my favorite financial books. I came across this illuminating quote, which I want to share with you:
“The problem is, the money investors take out of the system is coming from other investors who are putting money into the system, and the stock market is just a system that shuffles cash between investors. It is a system where current investors’ profits are strictly dependent on the inflow of money from new investors. And, such a system is also known as a ‘Ponzi scheme.’ “
The quote comes from The Ponzi Factor: The Simple Truth About Investment Profits(2018), written by economist Tan Liu. Do those words describe the rally since late March?
Ponzi schemes collapse when it becomes difficult to attract new investors or when a significant number of investors ask to cash out. It remains my contention that a lot of investors are about to flee the market, causing the pyramid of cards to come tumbling down. It’s difficult to come to any other conclusion, when severe recession, high unemployment, negative corporate earnings growth, political paralysis, and a raging pandemic are all taken into account.
August 10, 2019
Epic Games hosted a giant World Cup event for its popular game Fortnite. 100 players from around the world have were flown into New York City to compete. Top Prize … A cool $3M.
And to think of all the millions of parents in the 1980’s and 1990’s who warned their children that video games wouldn’t pay the bills.
Video games are a big business. A triple-A title can cost up to $100M to make, including market costs – but can still make many times that return – gamers can make a bundle too. Unlike the passiveness of a movie going experience … a sector that for many years has brought in far less revenue.
Guess then … it is game on! 😉
August 10, 2018
It’s been nearly seven years since Steve Jobs died on Oct. 5, 2011, at the age of 56 after a years-long fight with cancer. I will never forget him saying: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work.”
August 10, 2017
One of the greatest lies ever perpetrated by online marketers selling traffic training products is that there is “free traffic.” There’s not. If there’s no financial outlay, but you spend hours of your time implementing the strategy, that’s a cost because your time has value. Ray Higdon may have said it best, “Free is never free.” While building a business, one of the most important questions you must ask yourself is, “How much is my time worth?”
Same with video marketing. To make videos that actually get a lot of views, you need to make good videos. They always need to be highly informative and/or entertaining. Good videos can be made fast — but they still take time to make. You will either pay someone to do it, or pay someone to teach you how to do it. I think at this stage, we’ll both agree that it’s not exactly free.
So I will come back to the beginning of our conversation — your ONLY plan when starting out should be to make your very first sales and bring in cash as soon as possible.
You can’t save your way to making a fortune in business. It’s that simple — once you consistently show profits — it’s then wise to use a percentage of those profits to reinvest in your business, and therefore, enlarge your cashflow and increase your profits.