Dennis Slothower has been leading a small but profitable group of investors to some extraordinary profits in both good markets and bad over the course of a 38+ year investment career, starting as a stock broker in 1979. In 2011 Dennis was named the top performer by Hulbert Financial Digest for avoiding the Crash of 2008. Now, he is bringing his extensive experience to the public through Outsider Club, Stealth Stocks Daily Alert, and Wall Street's Underground Profits. For more about Dennis, check out his editor page.
This chart does a simple comparison of Osaka condo and Tokyo condo prices which does not reflect the entirety of the Japanese housing market. Yet the path seems very similar. Large areas with a real estate frenzy that hit high peaks and have struggled ever since. In fact, if we look at nationwide prices we realize that Japan has seen a 20 year bear market in real estate:
Why has real estate been such a drag on the overall Japanese economy? First, Japan’s unemployment rate stabilized after these bubbles burst but it shifted to a large temporary or contract based employment economy. One third of Japanese workers operate under this new world. Relatively low security with employers and this has spiraled into lower income and money to finance home purchases. The fact that the U.S. has such a large number of part-time workers and many of the new jobs being added are coming in lower paying sectors signifies that our economy is not supportive of the reasons that gave us solid home prices for many decades. I think this is a key point many in the real estate industry fail to emphasize. How can home prices remain inflated if incomes are moving lower?
It is isn’t egotism and lack of self-motivation that causes us to trade more. Panic and greed also play a part. It is a natural human emotion to want to invest more when markets are going well, or sell when markets are down or at least to stop contributing. Studies that shown that if you tell somebody that they have a 95% chance of making money, they are more likely to invest than if you tell them they have a 5% chance of losing money.
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Pension funds need an annual average of 6,6% income growth to pay for their promises. Over the last decade, they are getting less than 0,5%. Millions of retirees need to cover for this shortfall in their pension funds, and sell their financial assets, littl by little. It will become structural and widespread, as demographics will further strengthen in this direction (more retirees needing additional funds, and less working people saving for retirement).
Jeffrey is a truly independent thinker who is never afraid to make bold, out-of-consensus calls. That’s why I know when he takes the stage at the SIC, he will provide insight into much more than the secular bond bull market. I’m really excited to welcome Jeffrey back to the SIC, and I hope you can be there with me to experience it, first-hand. If you would like to learn more about attending the SIC 2018, and about the other speakers who will be there, you can do so here.
It’s been several years since the markets started using the word contagion. During the European debt crisis, this word was used constantly as traders worried that issues with Greece and Spain and Portugal would spread across Europe. Today, the markets are discussing another contagion as the Turkish Lira plunged 10% moving up to a higher of 6.25 versus the greenback before tracing some of its losses and settling near the 5.93 level. The close on Thursday was closer to 5 Turkish Lira per US dollar. The catalyst that drove the Lira lower seemed to be a lack of government concern that investors are waiting for an outline of a new economic plan. Read More
Dick Meyer of NPR believes that "the idea of blaming one person for the downfall of the economy with a gross domestic product of about $14 trillion, powered by 300 million people and engaged in complex global commerce is nuts — whether that person is Bush, Obama, Alan Greenspan, Bernard Madoff, Osama bin Laden or the editors of opinions at The Wall Street Journal."
Listen to him say….”THESE ARE THE FACTS.” This video is very entertaining and very informative. It shows you how much of a shyster these real estate agents can be. He says “there’s a whole bunch of us (realtors) out there who know real estate – it’s what we do for a living. We’re licensed and WE HAVE TO TELL YOU THE TRUTH, BY LAW. Boy, what a shyster.
Ironically it is not completely divided between East and West, as a few European governments have been hedging their bets by repatriating their gold from offshore over the past few years. But the race to accumulate gold has been primarily relegated to a few countries such as Russia, China, India, and Turkey, where combined they hold very powerful 'Trump Cards' as their economies, and along with the rest of the BRICS nations, make up 40% of the world's population. Read More
[A] new economics—the information theory of capitalism—is already at work. Concealed behind an elaborate apparatus, the theory drives the most powerful machines and networks of the era. Information theory treats human creations as transmissions through a channel—whether a wire or the world—in the face of noise, and gauges the outcomes by their surprise. Now it is ready to transform economics as it has already transformed the world.
Stock market downturn of 2002 9 Oct 2002 Downturn in stock prices during 2002 in stock exchanges across the United States, Canada, Asia, and Europe. After recovering from lows reached following the September 11 attacks, indices slid steadily starting in March 2002, with dramatic declines in July and September leading to lows last reached in 1997 and 1998. See stock market downturn of 2002.
Three weeks ago when GDX was trading around $17.90 I wrote a post titled "Why I Bought Gold Miners Today" in which I presented the concept that the gold miners were potentially all "sold-out" and ripe for a rally. Since that day the GDX is up a little more than 3% but the price action has been far from convincing and GDX ran into stiff resistance just above $19 last week (double-top at $19.11 to be precise). However, when one considers the totality of the picture it becomes easier to discern a potential head & shoulders bottoming pattern, with the recent choppy and lackluster price action as part of a larger bottoming process: Read More
The Spanish government is about to fall after the Ciudadanos party decided to join PSOE (socialist) and Podemos in a non-confidence vote against PM Rajoy. Hmm, what would that mean for the Catalan politicians Rajoy is persecuting? The Spanish political crisis is inextricably linked to the Italian one, not even because they are so much alike, but because both combine to create huge financial uncertainty in the eurozone.
There are many people who don't agree with these bears. PIMCO analyst Joachim Fels, for one, finds a recession to be unlikely over the next 12 months, Barron's reports. However, he adds that a global recession within the next five years has a 70% probability, based on history. Barron's also notes that the forecasting prowess of Jim Rogers and Marc Faber is questionable. They have been wrongly bearish for years, and those who followed their advice in the recent past would have missed out on the bull market. Additionally, Barron's notes that Nobel Prize winning economist Robert Shiller of Yale University, whose models indicate an overpriced market, nonetheless believes that stocks may climb yet higher. (For more, see also: Stocks Could Rise 50%, Says Yale's Shiller.)
A common refrain was a preference for non-US assets, particularly in equities given the run-up in American stocks and the earlier stage of economic recovery in Europe. The Fed could exit from its days of stimulus too fast, choking off the economic recovery and crimping profit growth. A few worried about the possibility for an inverted US yield curve when short-term rates rise above long-term levels, which sometimes are seen as a precursor to a recession.
The key thing to realize is that the debt cycle plays the main role in the business cycle. When debt and interest rates are low, consumers and businesses start buying and expanding, which results in economic growth. When that goes on for a while and debt and interest rates get too high, consumers and businesses run into problems, which results in recessions and bear markets.
First, momentum stocks are not done getting hit. As psychology turns more bearish, fewer investors are willing to bet that trees will grow to the sky at uber-hot (pun intended) public companies like Tesla Motors and Netflix. Each is down roughly 22 percent from 52-week highs. So, investors trying to make quick money should avoid momentum names. Second, timing the bottom of a correction or bear market is next to impossible. Guessing that $100 is the floor for Netflix, for example, is a dicey business; there really is no way to know what other investors are thinking in real time.
What is the opposite of a margin of safety? That is a question this market has had me asking myself for some time now. A margin of safety is a discount to intrinsic value that provides a safety net in the result of an error in analysis or unforeseen negative developments. The opposite of a margin of safety then is a premium to intrinsic value than can vanish even if your analysis is correct or things go unexpectedly in your favor. There are times when a security reaches a valuation such that even if everything goes right you’re unlikely to profit. The price has already discounted a perfect outcome. This “priced for perfection” scenario is the opposite of a margin of safety and this is currently where the stock market finds itself today. Read More
Our family would like to thank you for Heath’s recent financial aid award letter. However, we are very concerned with the results. Our expected family contribution dropped from $20,365 in 2016-17 to $6,987 for the 2017-18 school year, yet the award package left us with an additional need of over $8,500. The reduction in this year’s EFC is due to a reduction in assets, plus the fact that we will be sending two students to college during the 2017-2018 year. In spite of these changes, however, the amount of the current award is essentially the same as the award for 2016-17.