Probably, before the first investment strategist was ever born, investors were asking if the stock market was over-priced and headed for a collapse. Today, the most common response is in terms of the price-earnings (PE) ratio. It is the same as the PE ratio for individual stocks. You take the market price of the stock … Continue reading The TINA Effect
The Flinchum FileThoughtful Economic Analysis and Existential Opinions
The August projections from the august and imperial Goldman Sachs (GS) are as follows: 1. GDP growth remains stable in the U.S., rising from 1.9% this year to only 2.0% by 2018. (I’m guessing they expect a Clinton victory and a continuation of current economic policies.) 2. In Japan, it rises from 0.4% this year … Continue reading August All Twelve Months
When President Kennedy cut taxes, the economy boomed and the GDP grew nicely. When President Reagan cut taxes, the economy boomed and the GDP grew nicely. Since two dots make a line, does that mean that all tax cuts make the economy boom and GDP grow nicely? If so, why didn’t the two Bush II … Continue reading Good Things Are Not Always Good
One of the smartest things my father ever taught me was the importance of being informed, especially about international affairs. Of course, he had no way of knowing the burden of being over-informed would ever become so great, especially about politics. The smartest thing I’ve done this year is to put myself on a news-diet … Continue reading Great Advice!
Economists have been hard-pressed to find something they don’t like about yesterday’s “jobs report.” I found two. Expecting 180 thousand jobs, America produced 255 thousand jobs in July. This repeated the same happy surprise in the June jobs report. Where is the recession? Is the economy really as slow as indicated by the GDP reports … Continue reading Just Another Great “Jobs Report”
Mega-bank Wells Fargo does an excellent Small Business Survey each quarter, and I look forward to it. The latest is interesting on two points. First, business confidence is now the highest since the Global Financial Crisis of 2008/9. While they are accepting limited upside in revenue, they are keeping a tight rein on expenses. (This … Continue reading The View From The Bottom
Long ago, farmers and ranchers learned that the easiest way to control cattle and other large livestock was to put a ring in their nose. They could then tether the cattle to a particular location or lead them around by simply controlling the ring. The stock market has always had a ring in its nose. … Continue reading Following The Nose
Bob Doll is the highly-respected chief equity strategist at Nuveen Asset Managment. In his commentary yesterday, he stated “a slowly growing economy, improving earnings, and low bond yields should provide a tailwind for U.S. equities.” Despite the unexpectedly low 1.2% GDP growth in the second quarter, I agree with him. Yesterday, the equally-respected Jeff Gundlach … Continue reading On The Other Hand …
Last week, I wrote that the stock market would continue dancing as long as the band keeps playing the music — meaning there are few worrisome near-term danger signals to the stock market from either the economic or valuation standpoint, as long as the Fed remains “accommodative.” A friend and faithful reader told me that … Continue reading Timing Is Everything
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