Tuesday 16th January 2018
Dumb always gets punished in the end….
Dumb is not like Aussie flu….
Dumb doesn’t just debilitate its victim for a spell before losing its power and disappearing. Dumb is a chronic condition that endures and recurs and resurfaces time and again….
Dumb can’t be treated with hot lemon and honey or a course of anti-biotics. You can’t sleep it off or sweat it out….
Dumb is not something that can be cured. It can only be punished….
And right now, many investors are setting themselves up for punishment because they have fallen victim to the latest outbreak of the ‘dumb’ virus….
There are four symptoms to look out for with the current strain….
One: slavish devotion to the fad of the day….
Two: deep-seated anxiety based on the fear of missing out….
Three: a reckless determination to act without proper due diligence….
Four: the wrong-headed belief that positive results are guaranteed….
These symptoms combine dangerously to blind the victim to good sense….
They bring about a delirium that renders the sufferer irrational and encourages him to behave foolishly and against his own best interests….
The current outbreak is particularly virulent. We see this from the peculiar signs and strange behaviors playing out around us….… Click here to read more
Tuesday 9th January 2018
Figure out where the black money goes next….
It is a blessing to live through interesting times….
And no-one can fail to appreciate just how interesting the world of money is as we freewheel downhill into a new year….
It is a case of extremes every which way you turn….
- Rewriting the record books….
After a decade of the lowest interest rates in 5000 years, 2018 begins with British and American stocks recording all-time new highs – putting further gains on what was already an over-extended bull market….
And volatility is setting new records too. The CBOE Volatility Index (VIX) is hovering around its all-time low – and has been for a while now…
This tells us that investor complacency is at an all-time high. The market has never been more confident that things will continue to tootle along just as they have been….
Maybe the markets are correct. Maybe these trees can grow all the way up to the sky and out into space….
After all, stocks are sitting at pinnacle valuations wherever you look – all over the globe. Surely so many markets can’t be wrong….
But markets have a funny way of biting you hard on the backside….… Click here to read more
Tuesday, 19th December 2017
No curmudgeons at this end of the stick….
Readers occasionally crank-up the old email machine and write in to ask when I’m planning on feeling positive about something….
The honest answer is that you’re most likely to find me at my most positive when everybody else is feeling distinctly negative….
And there is no way of knowing when those times might come to pass. We simply sit tight and wait patiently for them to come along….
It’s not that I’m a gloomy old curmudgeon who takes pleasure in being stubborn or recalcitrant. It isn’t that I like to cast myself as a harbinger of doom….
My current sentiments – about the stock market and about bitcoin, for example – have more to do with the fact that my instincts are distinctly contrarian in nature….
When the consensus view is one of unbridled exuberance, my enthusiasm naturally dims. When the market is depressed, my natural inclination is to look around and identify reasons to be cheerful.
When the majority feels fearful, I am on the hunt for opportunity. When the market is calm and complacent and feeling like nothing can possibly go wrong, that’s when I start to worry and feel scared.… Click here to read more
Tuesday, 12th December 2017
No news is bad news….
‘Parabolic’ is my new favourite word….
This last fortnight, it’s followed me around the Internet like a lost dog….
I’m not sure exactly what it means. It’s all a bit mathematical for this layman’s simple mind….
It has something to do with the curve formed by the set of points in a plane that are all equally distant from both a given line and a given point that is not on the line.
I don’t get it. Donald Trump makes more sense. But swathes of commentators use the word to describe the latest rises on bitcoin’s price chart.
I understand better Stephen Roach’s assessment. The Yale economist says this:
‘I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career.’
But progress hasn’t been straightforward. The price remains volatile. Huge gains are frequently followed by significant losses….
Last week bitcoin breached the $17,000 ceiling before dropping to $15,610. Then it was up to $16,126 before falling back below $15,000. On Sunday the price dropped as low as $13,159.… Click here to read more
Tuesday, 5th December 2017
A veiled warning from a ‘paranoid’ Bank official….
An interesting and illuminating comment last week from a Senior Bank of England official. It certainly raised my eyebrow….
Richard Sharp, a member of the BoE’s Financial Policy Committee, highlighted that the British government has already borrowed a whopping £1 trillion since the 2008 banking crisis….
And he went on to say that additional borrowing risks triggering a financial collapse comparable to the one still being played out in Venezuela….
Read that again. It’s not a misprint….
According to Richard Sharp, there is a real and present risk that further rises in the levels of public borrowing could turn Britain into a European version of Venezuela….
This is no small observation. You will know that to be true if you take even a cursory interest in world events.
The Venezuelan economy is in a desperate state right now….
Unemployment is off the charts. Food shortages are commonplace. People are standing in line for staple items – often for hours and frequently in vain….
Medicines and other essentials are difficult if not impossible to come by….
It’s been this way for a couple of years.… Click here to read more
Tuesday, 28th November 2017
This chin is going to be tested….
The stock market appears to have an iron chin….
Over the last decade the FTSE has done nothing but rise….
No blow has been sufficiently hefty to wobble it, wind it or retard its progress – let alone threaten to take its legs and put it on the canvas….
Yes, we’ve seen the usual short-term fluctuations in overall values….
But the general direction of travel has been up – relentless rising values with multiple new record highs set along the way….
- No ordinary environment….
In an ordinary environment, you’d expect this kind of rising market to reflect a golden period of corporate success – a boom time for business across the board….
But the environment surrounding this rising market has been anything but ordinary….
A decade of unprecedented loose monetary policy – in the form of record-low interest rates and quantitative easing (money printing) – has flooded the markets with a tidal wave of new cash seeking out returns….
It is this deluge of capital – rather than any bottom-line corporate performance – that has fueled and driven the relentless upward trajectory of the market….
- The Goliath of bull markets….
… Click here to read more
Tuesday 21st November 2017
The observer’s guide to bubbles….
The panic is over for bitcoin holders – for now at least….
Last week’s plummet in price proved to be a temporary aberration – as we suspected….
Last week I highlighted a few features and factors that will serve to fuel continued momentum in the market….
Over the last week, bitcoin has not only recovered the lost ground but has kicked-on again – blasting through the $8000 ceiling and reaching new high points….
We figure this will be the scenario for some time to come – occasional corrections but a generally upward direction of travel….
The big question is this: is bitcoin in a bubble?
- A four-point sociological checklist….
One interesting feature about bubbles is that they are frequently only recognized in hindsight – particularly by investors who get caught up in them….
The promise of ‘guaranteed’ big profits on a continued basis can blind a man to underlying realities….
To the point where he swiftly becomes fixated on ‘getting involved’ and ‘not missing out’ rather than trying to figure out whether he should be doing so….
Such investors might do well to heed William J Bernstein, the American financial theorist.… Click here to read more