Why the Stock Market Valuation Matters Before a Recession? When the stock market is VERY overvalued before a recession, it tends to be VERY undervalued. Like the swing of a pendulum, or the stretching of a rubber band, sooner or later it comes back very violently. This happened in 1973, 2000 and 2008. The US…
Why the US Stock Market Was Overvalued by 14.2% on Oct. 1, 2018 vs. 7.7% Today? Because the value of the forecast changes over time (blue dotted line). The US stock market short-term forecast (S&P 500 with dividends reinvested) for the next 12 months is available to our subscribers. This great prediction model is updated daily.…
Greek’s 5-Year Bond Yields Have Fallen Below US 5-Year Government Bond Yield Which one would you choose? Greek bonds or US counterparts? This is a great example of financial market madness. Mark Twain once said, “History doesn’t repeat itself, but it does rhyme.” That’s true! Greece has spent around half its time in default on its…
How’s the U.S. Economy Doing Now? The real GDP Nowcast relies on soft data such as consumer and business surveys and hard data such as retail sales and industrial production. It forecasts the growth of real GDP. At full employment, GDP returns to the level of potential GDP. If a recession were to occur today,…
Is Trump Right to Criticize Powell? We don’t think so, because: – Interest rates are still near zero in real terms and below real GDP – The rise in Fed rates has very few visible negative effects in the USA – And at full employment, GDP returns to the level of potential GDP
What our Short-Term Forecast of the US Stock Market Has Been for the Past 12 Months? Here is what our short-term forecast of the US stock market has been for the past 12 months. This great prediction model is updated daily. It has a 97% correlation with the US stock market on a quarterly basis since 1970…
BlackRock Geopolitical Risk Indicator for Global Trade Tensions The recent decline of the indicator suggests that investors may be more complacent about the risk and impact of trade conflicts. Source: BlackRock Investment Institute – Global Investment Outlook Q2 2019
“The Individual Investor Should Act Consistently as an Investor…” – Ben Graham Quote of the day: “The individual investor should act consistently as an investor and not as a speculator.” –Ben Graham
Is Inflation Dead? Is this cover of Bloomberg Businessweek a contrarian indicator? Remember that dinosaurs evolved into birds over 50 million years. Do you think we will have to wait 50 million years for inflation to return? You may also like “How to Get Inflation?” and “Where Does Inflation Come From?“ Image: Bloomberg
The Value vs. Growth Differential Has Never Been So Extreme The Value vs. Growth differential has never been so extreme, even during the Great Depression and the Dotcom bubble. Chasing growth usually ends badly! Image: Woodford Investment Management Ltd
Over The Last 6 Months, The S&P 500 Lags Bonds, Gold And Global Stocks Last year, the sell-off of stocks was a correction from a bad equity risk premium and an overvalued stock market, as suggested by our forecasting models. Image: Bloomberg