Investing and Analysis

Consequences of Tax Cuts Starting to Impact Markets

When the changes to the tax rates were approved in Congress last year, I voiced my concerns about possible unintended consequences. One major concern was the one-time special treatment for companies to repatriate overseas assets back into U.S. dollars and how that would drive the dollar higher against other currencies. The rally in the dollar didn’t take place immediately, but ...

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Month of May Sees an Increase in Market Dispersion

The month of May ended last Thursday, and it was a positive month for all four of the main U.S. indices, but there were considerable differences in the performance of the Nasdaq and Russell 2000 compared to the Dow and the S&P 500. For the month, the Russell gained 5.95% and the Nasdaq gained 5.32%. The Dow only managed a ...

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List of Similarities to 2007 Continues to Grow

The summer of 2007 was an interesting one. Different aspects of the debt market were hot with investors and Wall Street couldn’t get enough of them. Collateralized Debt Obligations (CDO) and junk bonds were both getting gobbled up by investors looking for better yields. This morning while combing through different news sites, two different articles on Bloomberg caught my attention. ...

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Buying Stocks During Earnings Season – Or Not

The vast majority of public companies use a calendar year for their corporate financial reporting period. The Securities and Exchange Commission requires these companies to produce a 10-Q or quarterly report every three months. The first quarter of a calendar year-end reporting company would be January, February and March. Thus, the company would have 45 days from the end of ...

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How Treasury Bonds Affect Your Stock Portfolio

Modern portfolio theory loosely states that it is the composition of stocks, bonds, and cash as a class that makes a difference in returns, not a particular stock or bond.  It is whether you are in stocks or bonds as an aggregate, as opposed to owning IBM or Microsoft. We find ourselves in a current financial environment that is testing ...

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Who Will Control the Market for Rare Earth Minerals?

Whenever you have a shortage of raw materials in the world, it historically has led to war. A few generations ago, Japan attacked Pearl Harbor within months of a U.S. oil embargo. In 2010, China embargoed exports of rare earth elements to the United States. For those of us who don’t remember much of the physical sciences from school, rare ...

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Protectionism in the American Auto Industry

President Donald J. Trump didn’t wait long to act on his campaign rhetoric moments after being sworn in as the country’s 45th president of the U.S., by reiterating his intent to withdraw from the Trans-Pacific Partnership and that he will renegotiate the North American Free Trade Agreement. In an attempt to keep auto manufacturing jobs in the U.S., President Trump ...

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While Tech Stocks Drop, Bonds may be Real Problem

We’ve seen this movie before. Blockbuster Amazon, starring Jeff Bezos and his then yet to be profitable company, perhaps rescued from insolvency by the credit market. This epic saga co-stars convertible bonds, which won an academy award for financial solvency. Despite Amazon alone losing $53 billion in market value of late, FAANG’s largest loser, it is the bond market that ...

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Volatility Returns to Markets after Long Hiatus

The shoe that is volatility has dropped on a different foot in 2018. Investors had rarely seen a market like that of 2017, where returns were so abundant, and volatility was at its lowest levels in over half a century. An obscure financial tool that was reserved primarily for professional traders, has become a household name at the likes of ...

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The Financial Metamorphosis of the College Education

As is the case in any supply and demand driven market, the cost of a college education today has been driven to a point where it would seem impossible that demand for a diploma at prices in excess of $70,000 per year would continue. Flash back to circa 1980.  Tuition at some of the best private liberal arts schools was ...

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