One of the toughest things about navigating this bear market and the widely anticipated coming recession is that we've had to differentiate between real and nominal economic and market variables like nothing in recent decades. There are very few market commentators today who have navigated an inflationary environment like the current one. I haven't either, of course, which is why [...]
There has been a lot of angst over the last couple of weeks about a potential banking crisis. There have been 4 failures so far: Silvergate, Silicon Valley Bank, Signature Bank, and Credit Suisse. The first of these hasn't been mentioned much because it was primarily associated with lending in the crypto market and, as far as I know, there [...]
A bank's assets triple over a few years when interest rates are low. The bank invests those assets in long-term, higher-yielding municipal bonds with little credit risk. Inflation flares up and interest rates rise, reducing the value of the municipal bonds and funding dries up. Regulators become concerned that the failure of this bank could damage public confidence in the [...]
The hardest thing about investing is the patience it requires. Markets can and do go through long periods of stagnation that test every investor's commitment to their strategy. The last year has been a tough one for investors but the frustration actually extends back further than just 2022. The total return of the S&P 500 since June 1, 2021 is [...]
One thing I can tell you for certain about last week's big rally on Thursday and Friday: there were a lot of people who desperately wanted a good excuse to buy stocks. And buy they did after a better-than-expected CPI report Thursday morning, pushing the S&P 500 up nearly 6% on the week with all of that coming on Thursday [...]
Goodbye and good riddance to the third quarter of 2022. That was one of the wildest 3 months I've experienced in my 40 years of trading and investing. The quarter started off great with the S&P 500 rising 14% from July 1 to August 16 but ended with a 17% swan dive into the end of the quarter. And we [...]
Nothing happened last week. Stocks and bonds and commodities continued to trade and move around in price but there was no news to which those movements could be attributed. The economic news was a trifle and what there was told us exactly nothing new about the economy. A report that wholesale inventories rose 0.6% cannot be turned into market moving [...]
Over the last few months, as the outlook for the economy turned more sour, I've used these weekly commentaries to warn you not to get too negative. Long-term investors need to have a strategy they can stick with no matter what happens, a strategy that keeps them on an even keel. If you were so nervous that you sold out [...]
Note: This update is longer than usual but I felt a comprehensive review was necessary. The Federal Reserve panicked last week and spooked investors into the worst week for stocks since the onset of COVID in March 2020. The S&P 500 is now firmly in bear market territory but that is a fraction of the pain in stocks and other [...]
Be fearful when others are greedy and greedy when others are fearful. Warren Buffett People are always asking me where's the outlook good, but that's the wrong question. The right question is: Where is the outlook the most miserable? Sir John Templeton, The Principle of Maximum Pessimism I don't know if we're at the point of maximum pessimism yet but [...]
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