Investing

John Maynard Keynes Endorses BREXIT.

John Maynard Keynes Endorses BREXIT.

So, John Maynard Keynes, the iconic economist of the left, would see Brexit as pretty close to the ideal family of nations. One in which “Ideas, knowledge, science, hospitality, travel--” flow freely among countries. But, according to Keynes, Quote: “let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”

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Coronavirus: The Numbers Don't Add Up.

Coronavirus: The Numbers Don't Add Up.

With that mindset, we come to the outbreak of the Coronavirus in China, with a very different perspective. We try to look past the wild speculation that we see on the internet and much of the main stream press. Just as we look beyond the official proclamations of the Chinese Authorities. Why? Because those sources may not have the information and/or they may have an agenda, that will slant the information that they provide. To me, the best current information on the Coronavirus, is the actions of the companies and businesses in China.

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OK For Markets To Fall?

OK For Markets To Fall?

For the Street, the Crash was part of our culture. Of course, these people knew, perhaps better than any others, the terrible tragedy of that time. The memory of men jumping out of windows to their death, was very real. The lost fortunes, and desperate lives were all part of the Street's tradition.

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How Profitable Are American Companies?

How Profitable Are American Companies?

Each quarter all of the publicly trade companies in the country report their profits. This is a closely watched, carefully measured exercise, that is vital to the workings of the financial markets. From my perspective, these earnings reports are the primary driver of the stock market. If we boil investing down to its simplest terms: investing is the purchase of a company's future profits.

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Trouble With Dr. Copper?

Trouble With Dr. Copper?

Copper is one of, if not an essential component for much of manufacturing. In fact many analyst and economists look to Copper as a harbinger of the future of global industrial production. Copper has proven to be one of the best early warning signs of any significant down turns in factory production. So its move over the last 9 days has to be disconcerting to say the least. In a little over a week, the price of Copper has declined over 10%.

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Did Earnings Season Become Meaningless?

Did Earnings Season Become Meaningless?

This week we will see about 1/3rd of the major S&P 5000 companies report their last quarter results, and give guidance on what they see ahead. Now the earnings are already done. That's all history, and it ended last December 31st. But the guidance, well that's a different matter entirely. As you know, we have been carefully following the developments in the spread of the Coronavirus, 2019 n-CoV.. Over the past week, we have seen this new, novel virus infect literally thousands of residents in China, and most unfortunately kill dozens.

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How To Manage Your Invstments In A Crisis, Like The Coronavirus.

How To Manage Your Invstments In A Crisis, Like The Coronavirus.

There's a true story told, about a young Peter Lynch. You may have heard me talk about it before. The year was 1987, and Peter Lynch was the manager of one of the most successful, and largest mutual funds of all time: The Magellan Fund. Now Peter had been working very hard for years, shepherding the fund as it grew and grew. It was time for a well deserved vacation, and as he was an avid golfer, he choose a vacation in Scotland, the home of sport. Well just as Peter was teeing off on the third green, a caddy came running across the fairway. Mr. Lynch, Mr. Lynch, you have a satellite phone call from the United States.

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Coronavirus: Where Did It come From?

Coronavirus: Where Did It come From?

For those of you who follow this podcast, you know that our primary interest are the financial markets. But sometimes outside events can be so strong, that they affect the world's stock markets. I think this is one of those events. So, today a look at this new Coronavirus. Known to scientist as: 2019 n-CoV, the “Novel” Coronavirus.

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Next Prez? It's The Economy.

Next Prez? It's The Economy.

Forget the polls, ignore the impeachment, if you really want to know who will win the Presidential Election: watch the Federal Reserve.

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Investing Unknowns.

Investing Unknowns.

From my perspective, the markets are currently living in a time of “known unknowns.” That is we know that there are certain things that will play out in a way we don't exactly know, but we feel comfortable that we can handle any eventuality. In the stock market there is always a whole list of things like this. We don't know, for instance, what the comings corporate earnings will be. But we're comfortable, that they will fall within an anticipated range. Next week we will get the latest number on the Gross Domestic Product, we don't know exactly what that will be, but current estimates are that it will be about the same as the last estimate, a 2.1% growth rate. And we are comfortable with that. Same with interest rates, also announced next week. We're comfortable that they will remain about where they are. And so it goes throughout the financial world right now. We think we know what lies ahead, and we're reasonably assured that it will be a smooth ride ahead.

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Coronavirus: A New  Health Threat

Coronavirus: A New Health Threat

Its that time of the year again: the Flu Season. We see it every year at this time, and we try to take all the necessary precautions. If you're more conscientious than I am, you have probably taken a flu shot. My daughter, who works at a local school, told me recently that 40 of their students were home sick. That's a large number for this small school. And we try not to come in contact with any strangers. At Church, our Priest has instructed that there will be no passing of the Peace, until Flu Season is over. Perhaps most surprising to many, even the Stock Market took note of the recent outbreak of the Coronavirus in China, by opening down on Tuesday's opening. And I think that financial markets are right in begin concerned about a possible outbreak of this new strain on Viral Infection.

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How To Manage Cash.

How To Manage Cash.

Let's talk about cash. Cold hard cash. The Green Stuff. Our primary economic medium of exchange. For the last 12 years, we've treated cash pretty poorly. Many of the major banks will pay you essentially nothing for keeping cash with them. The Federal Reserve Bank has continued a strategy of lowering interest rates so that the return for those of us who hold cash is next to zero. But it doesn't have to be that way. Cash is a very important component of your overall wealth strategy. And I feel, that you should spend some time managing your cash position, just like you manage your stock portfolio. So if you'll bear with me, I'll walk you through the way I manage cash for my own account and my clients.

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China: What a Deal!

China: What a Deal!

To me, trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, reached for the brass ring, and they got it. I encourage you to take 10 minutes and read the Agreement especially Article 1. In Article 1, you'll find a complete outline of the Agreement on Intellectual Property. I doubt that you've heard much if anything about this, if you've listened to the mainstream media. But to me, this is the heart and soul of this agreement.

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The Big Four Bank Results.

The Big Four Bank Results.

Collectively, about 45% of us use one of these banks, they are the Big 4 US Banks: JP Morgan Chase, Wells Fargo, Citigroup and the Bank of America. And its no accident that these 4 banks lead off the “official” beginning of earnings season each quarter. They are that important to our financial system. Collectively they have 9 Trillion in Bank Assets, not counting their custodial and trading functions. Both of which would increase those numbers geometrically. The Federal Reserve, the nation's central banker, uses these four institutions both to measure the health of the overall banking system, and to implement various fed policies. So, as investors it is important that we always keep an eye on these 4, even if they don't happen to be in our portfolio currently.

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China Comes To The Table.

China Comes To The Table.

As you know the United States is currently billions of dollars in the hole each year in their trade with China. According to the latest figures from the Census Bureau, which keeps track of these things. The US Trade Deficit with China exceeded $360 billion dollars last year. Clearly that is not a number that is sustainable over time. And no rational nation would seek to continue such a relationship. So the goal of the Trump Administration is clear, stop the bleeding. Bring trade from China, somewhere close to balance.

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The Roaring '20's, p.2

The Roaring '20's, p.2

There is something special about the '20s. Historically the '20s have been a time of renewed optimism, a beginning of a new century, and most especially a time when financial speculation seems to hit a peak. Yesterday we traced the most famous of all '20's speculative bubbles. What's most interesting of all of these is that they are essentially financial phenomena. It is not, the production side of the economy that has been involved in these mania's, its the financial side. In fact in the case of Gregor MacGregor, much like Bernie Madoff, there was no real product or service provided. It was a pure swindle. And purely financial. This list of Roaring '20s gives us an excellent perspective on what is happening in our own financial markets today.

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The Roaring 20's

The Roaring 20's

There is a “meme” going around the Traders on Wall Street. The meme is that the stock markets always have a bubble during the second decade of a new century. Its the “Roaring 20's.” The most famous of the Roaring 20's, was, of course, our own Roaring 1920's. A time of the tin Lizzy, flappers and a stock market that just wouldn't quit. When everyone became a speculator in stocks.

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The Trouble With Good News.

The Trouble With Good News.

As a lifetime member of the Wall Street Curmudgeon's Club, I'm beginning to feel just a little bit uncomfortable. Yes, I know its just the beginning of the new year, and that everyone is still basking in the glow of the holidays. But still there's just a little bit too much good cheer to make me feel right. Oh sure, we still have too much debt in the system, and I've noted that the Fed has to constantly inject funds into the overnight repo markets just to keep them afloat. And all that seems about right, it lets me get together with my other Curmudgeons and discuss, over a vintage glass of Chardonnay, how the world's falling apart. But I have to tell you that this next week is trying my patience...

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A Dramatic Change In Trade With China.

A Dramatic Change In Trade With China.

Now when Washington and Wall Street think of international commerce, they usually think of the country's balance of trade. And fair enough. The Balance of Trade Numbers are an excellent score card of how a country in doing in the international arena. And for the last quarter of a century or more, the balance of trade numbers show that the United States has been loosing, and loosing bad when matched up against the Peoples Republic of China. For 25 straight years, China trade with the US showed a trade deficit for the Americans. Unrelenting, always growing. Money flowing to China from the US coffers. Until last November. In a report released on Tuesday, the Bureau of Economic Analysis is reporting that for the first time in memory there was a drop in the American Trade Deficit. And not an insignificant drop, an 8% drop, representing a reduction in that trade deficit of $43 billion dollars. Washington is scratching their head, Wall Street is puzzled. What just happened?

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Debt Claims The Nation's Two Largest Dairy Producers.

Debt Claims The Nation's Two Largest Dairy Producers.

Two Dairies Companies In Bankruptcy.

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Markets Reaction to the Death of Qasam Soleimani

Markets Reaction to the Death of Qasam Soleimani

Wall Street's reaction was predictable: equity markets fell sharply, futures off more than 300 points earlier. As it was “Risk off” on the Street. Conversely safety was the new objective with both bonds and gold gaining a big bid.

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Labor vs. The Globalists

Labor vs. The Globalists

It has been those lost jobs, that has caused the American Labor Force participation Rate to drop. And I believe that it has been this relatively poor employment outlook that has caused many workers to change their basic world view. Although like most consumers, these workers have also benefited from the imported low cost goods at, for instance, Walmart. There is now a growing realization that those low cost items, have been purchased at the cost of US Jobs. And the person who made that point, more than any others, was a rough and tumble business man from Queens New York, named Donald Trump. This multi-billionaire has somehow bonded with the American middle class, the wage earners and small business men, who have been hurt by globalization.

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2020: Back To Fundamentals.

2020: Back To Fundamentals.

It is a simple shorthand, used to convey a point. But for investors, this kind of thinking can be a real danger to your returns. We need to go beyond this kind of reporting and look at the important factors underlying our investments. What used to be called the fundamentals of stock investing. You know like earnings, management and market share, to determine whether to invest in a given stock. And perhaps that's a good resolution for the New Year, let's get back to the fundamentals.

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What To Expect For 2020.

What To Expect For 2020.

Well, It's New Year's Eve, that time of the year when we say goodbye to another year and look forward to what's in store for the next 365 days. For many, if not most corporations, today marks the end of their fiscal year. The time that they account for all of the business over the last 12 months, and will use those numbers to report their profit or loss to their shareholders. But this is a very special year-end celebration: as in addition to ending the year of 2019, it is also the end of the first and second decades of the new 21st century.

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Start listening to The Toughest Milestone.
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