Cycles are inevitable for a number of reason. To best understand let’s simplify things a bit. Assume a world where there is one currency, no debt, and no increases or decreases in the money supply. If there were only two assets, cash and gold, the people could buy gold and nothing else. If one...
The stock market is priced based on human participants making determinations about what they are willing to pay. This is a function of how much money is available so aside from confidence, liquidity in the market plays a large role. Both human emotion and business activity as well as the federal reserves activity, banking...
Pay Attention to my long term stock market investment outlook July 2011 to sometime in 2016. This is several measurements of the stock market and what kind of yield to expect. Some ways to allocate your wealth are to use contrarian indicators and measurements such as mutual fund cash levels. I prefer to use...
The scientific method teaches us to eliminate all variables and only focus on one as the way to determine cause and effect. Double blind studies are created to avoid consciousness having an effect on the experiment. However math and science also teaches us that there is synergy. The act of two or more circumstances,...
This is a two part post, the first being commentary that I never had the chance to post even though I had it saved in here… This is the chart of the Russel IWM Back in 2010 There was a H+S pattern When the final H+S failed we see it not only failed to...
The Buffett strategy after his paradigm shift thanks in large part to Charles Munger was to first identify good companies, and then and only then to determine what price to pay for those companies. I believe that it is more effecient to come up with a screen to identify good company traits first using...
Unfortunately, there are only a few macro-economic factors that are moving the stock market right now. That is usually not a good sign, or one that is fraught with risk. You see, if only a few things are moving the financial markets, that means they are highly correlated. If they are highly correlated, that...
Many people wonder “should I buy a home or rent?” The answer is going to always be an annoying “it depends”. But the next question is “on what?” It depends on how long you are going to live at a given residence. If you are planning on living for only a year, most certainly...
There are plenty of safe investments. The idea behind a safe investment is to hedge or guard against losses, and let the upside be unlimited. Any stock can accomplish this if you manage it well from some aspects, but you still risk losing a lot on a particular investment so with stocks you will...
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