Barron’s is a highly-respected weekly news-rag. The cover article on their latest issue proclaims: NEXT STOP: DOW 30,000 Inside, the article begins with: The Dow hitting 20,000 was no fluke. Today’s stock prices are well supported by solid prospects for corporate earnings and economic growth. In fact, if President Donald Trump can avoid stumbling into a trade war – or a real war – there’s no…
The Commerce Department has just released their first estimate of GDP growth during the fourth quarter, showing a 1.9% annualized rate, which is about what was expected. Although this is down substantially from the Q3 growth rate of 3.5%, it was expected that 3.5% was an aberration, due to agricultural imports. For full year 2016, however, GDP growth was about 2.1%, which is also the…
Like most people, I’ve been called a few names, including some colorful four- or seven-letter names. Now, I’ve been called a “globalist” – someone who supports the notion of globalization. I didn’t know that word was a pejorative, but I will wear it with pride!
For my thoughts on the Dow reaching 20 thousand, please read the blog of December 15, 2016. It took a few extra weeks to get there, but that is a good thing, not a bad thing.
Peter Navarro is a brilliant Harvard-educated Democratic economist that has been picked by President Trump to direct the newly-created National Trade Council. After running for office three times without success, he made the prudent move into appointee politics. He is also the author of Death By China, which warned of war with the Asian giant, both militarily and economically. Most economists support the notion of…
One of my favorite thought-leaders is Bob Doll of Nuveen Asset Management. He maintains a strong hold on the long-term perspective and is not prone to panic. His latest commentary contained the following: 1. Corporate earnings are increasing nicely. Consensus forecasts for this quarter is a 6.4% increase.2. Weekly unemployment claims hit a 43-year-low last week.3. Because most new presidents stumble when first taking office,…
When I was doing graduate work at the University of Dallas during the last century, I met a fellow student that I’ve always remembered him as the “cheerful intellectual,” because he wrestled with both facts and truth so optimistically. He had been a high school math teacher and debate team coach in his prior life, but debate was his true love. He felt about debate the…
In June of 1981, I was backpacking the Chisos Mountains along the Mexican border. In those days, there was no news in the backcountry. Cell phones were still unknown. However, when we got down, I learned the then-Fed Chairman Paul Volcker has raised interest rates to a record high of 20%. I knew that made a recession inevitable, and, sure enough, we experienced the recession…
I predicted that the market would continue rallying until the inauguration, which is typically a time of good feelings, before reality spoiled the party. Instead the party was spoiled at least two weeks early. Maybe, it was just catch-up time for a party that go ahead of itself. Maybe, it was the realization that Congress will hug the tar-baby of Obamacare, before fixing the Internal…
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An ancient Chinese proverb by Tao Te Ching says “change your thoughts — change your world.” Nowhere is that more true than the area of finance called behavioral finance. Your attitude and assumptions toward money and investing have a huge impact on it. The best known example is during bear markets, when investors panic and sell out, which is a mistake! If your total portfolio…
My quarterly column for Inside Business has been released, and you can read it here: http://pilotonline.com/inside-business/news/expert-column-as-election-years-go-a-predictable-one/article_b7fab3e0-cbdb-5790-9cd6-ba5b16990d68.html
One big loser in November’s election was gridlock, and I’m glad. The other big loser was globalization, and I’m sad . . . very sad! At least, I have good company. According to research by The College of William and Mary, my old alma mater, there is an inverse relationship between educational level and disdain for globalization. In other words, the more education a person…
Vanguard has done some interesting work. They looked at the stock market for every single day from 1990 until 2015. During that 25-year period, they identified the 20 best days and the 20 worst days. What they learned is that these 40 different days, both up and down, tended to be clustered around geopolitical events and within a month of each other. Take a look…
President-Elect Trump’ s excellent campaign slogan of “Make America Great Again” begs the question of when was America great before? A friend sent me an article by Karl Malentes in The New York Times entitled “Vietnam: The War That Killed Trust.” It was sobering a read, for example, that 65% of Americans are too young to remember the war. While the article doesn’t say this, I think…
The Securities & Exchange Commission is charged with the responsibility of protecting America’s investing public. Since the Great Recession, they have been aggressively policing stockbrokers and financial advisors . . . very aggressively! I think it had something to do with shutting the barn door on a timely basis. The problem with such aggressive policing is that it focuses almost entirely on process, not results.…
Politicians receive too much credit when the economy is good and too much blame when the economy is bad. President-Elect Trump will take office when we already have full employment. President Obama “produced” twelve million jobs during his tenure. There is no way his successor can be so lucky. For the last twelve months, our economy has produced 180,000 jobs each month. For the last…
For the last six months or so, the economic data has been generally improving. Yesterday’s ISM report is a continuation of that pleasant trend. It indicates that the manufacturing sector is the strongest it has been in two years! This comes despite the disturbing 5% rise in the dollar since the election and weakening global growth. Employment in the manufacturing sector has also reached an…