Blogs y opiniones de economia en ingles

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The airline managed to post a 3rd-quarter profit, but earnings could fall into the red again
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Aerospace and defense stocks meeting Ben Graham's Lost Formula

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"There is no means of avoiding the final collapse of a boom brought about by credit expansion" - Ludwig Von Mises

The ideological consequences of this super asset bubble collapsing will be of such a magnitude that most of today's pundits are incapable of acknowledging them. This market has done nothing "wrong" other than to remain artificially pinned at all time highs while the sheeple threw their life savings into it. Bulls can afford to be fat and happy, because they are sitting atop the largest uncorrected rally since 1933 and that fact is not the slightest concern to them. Unfortunately, contrary to popular belief, there is no pot of gold at the end of this rainbow. On the other side of super asset bubble meltdown, gamblers will come to realize that all they bought was the biggest empty load of hot air in human history...

The greatest fear I've heard over and over again is that we are headed for "stagflation", and of course there is a trade for that - commodities, Bitcoins, alt-currencies, real estate etc. Never mind that those asset classes are part of the super asset bubble. This argument of stagflation is of course wishful thinking for those who are whistling past the graveyard of the greatest debt bubble in human history. It conveniently fits with the right leaning desire that Biden's economic recovery is doomed to fail, but not catastrophically. It will fail in a late 1970s peak middle class kind of way that proves Supply Side economics was the right choice all along. It WON'T fail to the extent that it reveals four decades of Reaganomics to be an abject human catastrophe. Because that would be bad and ideologically terminal.

Wishful thinking.

It never once occurs to any of these people that they are watching a credit crisis unfold in real-time. Not A credit crisis - THE CREDIT CRISIS. 

Here we see gasoline adjusted for inflation is either at a three year high OR at the same level as 2005, depending upon who you believe.

This chart of global (wealthy nation) real estate is a good proxy for the overall relative magnitude of each serial asset bubble. What it shows is that each bubble has exploded with greater and greater dislocation, followed by a bailout and an even larger bubble. Many people seem to forget that there was a financial crisis that preceded the financial crisis. It was the Savings and Loan Crisis:

"The roots of the S&L crisis lay in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees"

In other words, the roots of the Global Financial Crisis of 2008 are the EXACT same as the roots of the S&L crisis, only of much larger magnitude. AND the roots of this impending crisis are the exact same as the roots of those two prior crises only once again of much greater magnitude. Fraud and criminality encouraged via continuous monetary bailout since 2008.

Of course, societal moral collapse has been front-running this latent disaster all along. Which is why even now so few people question it. Most people in positions of wealth and authority today are the prime beneficiaries of this mega fraud and hence they have no incentive to warn against it. Why would they want to see a paradigm shift that could have them at the bottom instead of the top?

All of which preamble gets us to the Casino...

As the saying goes, tops are a "process" not an event. I say, tops are a process followed by an event. In this case, a super cycle top which is even a longer process than usual. Here we see the Dow has been topping since last May which is now five months and who's counting? 

The 2018 Q4 deflationary collapse is the analog of choice. It featured the following similarities:

Fiscal stimulus withdrawal, monetary stimulus withdrawal, a peak in oil, a massive spike in natural gas, peak Treasury reflation expectations, heavy distribution (negative money flow), Chinese stock meltdown, dollar rally, massive breadth divergence, a double breakout in Nasdaq new lows, record option skew, and a second growth stock blow-off top in the same year. The first one being February. The main difference we see below however is that investor positioning (IMX) increased since February whereas in 2018 it decreased.

Note the current position (main pane) and the circle from October 2018:

Here we see Brent Crude is literally identical to 2018:




Among the reflation sectors, airlines have the clearest wave count:





In summary, Chinese markets have been bouncing this week as gamblers BTFD deja vu.
The reason why you don't hear much concern about China Lehman is because these people can't afford to be wrong this time.


 

We’ve been publishing papers, books and blog posts for over 15 years covering everything from asset allocation strategies and global value investing, to farmland investing, to startups, and even the question of whether or not institutions and endowments should just be managed by a robot. With thousands of pieces of content, we thought it was […]

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Here’s how bank earnings are impacting the markets from CNBC. ...

The post Clips From Today’s Closing Bell appeared first on The Reformed Broker.

Updated on October 13th, 2021 by Bob Ciura Berkshire Hathaway (BRK.A) (BRK.B) is one of the most successful companies in American history. The story began when world-famous value investor Warren Buffet began buying shares in an ailing textile manufacturer in the early-1960’s. He eventually purchased enough shares to take over control of the company, and […]

The post Will Berkshire Hathaway Ever Pay a Dividend? appeared first on Sure Dividend.

 

 

Over the years, I have discussed why I publish about investing and related topics (See this, this, this, or this). Quite a few of us have been doing this before “monetizing content” was a thing.

Spend time reading any of the RWM Mafia and a pattern as to why we put words to page begins to emerge. We write to:

Figure out what we think
Explore a topic or idea
Memorialize an investment position (or potential trade)
Share expertise
Educate readers
Publicize a concept
Express outrage
Signal interest in a topic
Influence decision-makers
Debate / argue around an issue
Defend an idea or position
Educate ourselves about a thing
Resolve a noisy internal dialogue

I am going to share a few examples, and if you look for a consistent thread through all of them, you should find that: Each adds value, searches for truth, expounds on deeply held beliefs, are sincere, and reflect curiosity about the world. If only everything I read had those 5 attributes.

Michael Batnick is Head of Research at RWM, a founding principal, and a crucial component of our investment committee (he does the heavy-lifting, I get all of the credit). This post is a perfect example of teaching readers even as he admits what he doesn’t understand:

I Don’t F*ckn Get It

All of this stuff is incredibly confounding. On the one hand, you have normal people speculating on Doge, which is cute and mostly harmless. I mean, it says right there on the website that “Dogecoin is an open-source peer-to-peer digital currency, favored by Shiba Inus worldwide” Silly, sure, but hard to get too worked up over this. And then on the other side are wealthy people who buy pet rocks as status symbols. I understand this drawing your ire, but I hope now, or at least after reading Packy’s piece, that you understand people’s motivations.

And then, in the middle, you have brilliant investors like Chris Dixon who swear that this is web 3.0.

Blair duQuesnay is a triple threat: She is a CFA who sits on our investment committee, an advisor/CFP, and she also manages RWM’s UHNW practice. A recent discussion reveals her curiosity and insight:

Pluto is a Planet

I find myself rebelling against this change like a cranky old man. Back in my day, Pluto was a planet! I refuse to call it a silly dwarf planet. Bah humbug! I’ll probably get angry again when my kids start learning the solar system in school.

I notice this tendency among professional investors. The sands of time shift the way the world of money works, if only ever so slightly. What worked in investing 40 years ago, may not work today. We cling to the groundbreaking academic papers of yonder days – mean-variance optimization, the small-cap premium, the value premium, and book value. We read the masters – Ben Graham, Modigliani, Miller, Fama, French, and Merton – and we deem their work Gospel.

Has anyone pursued the financial well-being of teachers more than Tony Isola? That is what he and Dina Isola do for RWM. This is first-rate:

How To Escape Your Financial Cocoon

Self-deception is a raging epidemic.

A myriad of factors influences our point of view. Genes, family life, friends, experiences, and other items determine perceptions.

Why do we believe our experiences are reality?

James Low reinforces this concept.

These stories have a tilt or bias. This generates a selectivity in our attention which blocks many of the other possibilities we might entertain.

Delusion becomes fact. The worst part- We aren’t aware.

Neither is anyone else. Nobody wants to rock the U.S.S. Delusion.

Everyone’s wearing tinted sunglasses. Viewing reality in different shades turns fantasies into reality.

Nick Maggiulli is our resident quant/data wonk/COO. This post is classic “Nickie Numbers” – take generally accepted wisdom, crunch the numbers, prove it is bullshit:

Why Buying the Dip is a Terrible Investment Strategy

But today, I’m going to change all that. Because today I’m going to give Buy the Dip the proper burial that it deserves and demonstrate without a reasonable doubt why it is a terrible investment strategy.

Ben Carlson may be the best financial writer today who regularly uses data to demonstrate points on investing strategies. He works with our institutional clients. I could show you countless examples but let me simply go his most recent:

The Worst Stock and Bond Returns Ever

The U.S. stock market is up 13.5% per year since 2009.

Valuations have been well above historical averages this entire time and moving ever higher.

Interest rates are about as low as they’ve ever been.

Add all this up and it’s hard to argue with the idea that investors should lower their return expectations going forward.

The problem with this equation is you could have said this very same thing in 2012, 2013, 2014, 2015 and so on yet it hasn’t happened. The low return environment that seemed like a sure thing has been nothing but high returns.

There are few people in the world who can identify connections between disparate ideas like my partner and RWM co-founder Josh Brown does. His ability to see what everyone else misses is unprecedented. And his writing is so sincerely beautiful. Like this piece:

I Collect Cashflows
I collect shares of businesses. Been doing it since my late teens. Not always successfully. I use a certain type of non fungible token called a stock certificate for this. I never lay hands on the certificate, it’s in digital form, living somewhere in the multiverse. A company called DTC makes sure the shares I’ve bought are the shares I get. And then I hold them. Sometimes I will trade them for digital dollars that I also don’t ever see or touch, but then soon after I am trading those dollars for another pile of virtual stock certificates. People will say “You’re crazy, why would you want to buy a fraction of a company you will never touch and hold in your hands?” And I’m like “You just don’t understand.”

When ideas come together in a way that is informative, entertaining, and educational it is a thing of joy.

Beautiful, just beautiful.

 

The post Finding Value via Writing appeared first on The Big Picture.

Updated on October 13th, 2021 by Bob Ciura This article examines the investment prospects of 9 of the top beverage stocks in detail. The companies analyzed sell a mix of alcoholic and non-alcoholic beverages. We have compiled a list of over 20 stocks that manufacture beverages. The list was derived from the holdings of two […]

The post The 9 Top Beverage Stocks Now, Ranked In Order appeared first on Sure Dividend.

Episode #359: Africa Startup Series – Aaron Fu, Sherpa Ventures, “We Really Care About The Ability of Our Businesses To Uplift The Other Businesses in Africa”               Guest: Aaron Fu leads growth at emerging market inclusive tech focused Catalyst Fund and is a general partner in Africa focused founder […]

The post Episode #359: Africa Startup Series – Aaron Fu, Sherpa Ventures, “We Really Care About The Ability of Our Businesses To Uplift The Other Businesses in Africa” appeared first on Meb Faber Research - Stock Market and Investing Blog.

Updated on October 13th, 2021 by Bob Ciura Investors looking for stocks with long histories of dividend growth should take a closer look at the Dividend Kings. This elite group of stocks have the longest streaks of annual dividend increases. The Dividend Kings have each raised their dividends for at least 50 consecutive years. To […]

The post Dividend Kings In Focus: Altria Group appeared first on Sure Dividend.

Bought: COTY CNHI GXO
Added to: VRTX FIS BMRN BK DXC UBER GE SLB BUD LUV AES FCX

My mid-week morning train WFH reads:

• The best- and worst-case scenarios for Covid-19 this winter Last year, almost nobody was vaccinated against Covid-19. 56% of the US population is fully vaccinated as of October 7. That includes 84% of people over 65, who are generally the most vulnerable to dying from the virus. FDA will soon consider whether to authorize a vaccine for children as young as 5, which would push vaccination rates higher. More than half the population being vaccinated is the primary reason for optimism about the coming months. (Vox)

• Why Airports Hold Promise for Asset Allocators Investments in airports are increasingly popular among American institutional investors—less on US soil than overseas. “Privatizing airports is common outside the US.” The allure: Absent a global scourge, airports’ annual returns can be in the high single digits, or, using leverage, in the low teens. Despite US constraints and pandemic headwinds, odds are they’ll spring back to their old growth level, analysts say. (CIO)

• Nadig: The Problem With a Bitcoin Futures ETF Lost in the mix here is the fact that, for most folks, Bitcoin futures are honestly a pretty second-rate way to get exposure to crypto. The biggest issue with any Bitcoin futures ETF — indeed, with any futures-based ETF at all — is that buying the ETF does not mean that you’re buying the actual headline asset. With a Bitcoin futures ETF, you’d no more be buying bitcoin than you would be buying barrels of oil by owning the United States Oil Fund (USO). Instead, you’re buying exposure to derivatives based on that asset — I’ve listed a few of their drawbacks. (ETF Trends)

• Al Gore’s $36 Billion Fund Sees New Urgency to Cut Off Oil Money Five years. That’s roughly how much time the investment universe has left to stop feeding capital to greenhouse-gas emitters before it’s too late. “The urgency of the challenge will require us to think differently around capital allocation,” Blood said in an interview. “And we don’t have 15 years or 18 years to get there. We have probably five years.” (Bloomberg Green)

• There Is Shadow Inflation Taking Place All Around Us Some companies haven’t been raising prices. Instead, they’ve been cutting back customer services and conveniences, but how should that be measured?(Upshot)

• Nations agree to 15% minimum corporate tax rate Most of the world’s nations have signed up to a historic deal to ensure big companies pay a fairer share of tax. Some 136 countries agreed to enforce a corporate tax rate of at least 15%, as well a fairer system of taxing profits where they are earned. It follows concern that multinational companies are re-routing their profits through low tax jurisdictions. (BBC) see also The Rich Have Found Another Way to Pay Less Tax Most of the world’s nations have signed up to a historic deal to ensure big companies pay a fairer share of tax. Some 136 countries agreed to enforce a corporate tax rate of at least 15%, as well a fairer system of taxing profits where they are earned. It follows concern that multinational companies are re-routing their profits through low tax jurisdictions. apparently failed to appreciate the cleverness and aggressiveness of lawyers, accountants and money managers employed by the wealthy. They found myriad ways to exploit opportunity zones to reduce clients’ tax bills without much attention to those who live in the zones. (New York Times)

• Want to add healthy years to your life? Here’s what new longevity research says. Death comes for us all. But recent research points to interventions in diet, exercise and mental outlook that could slow down aging and age-related diseases — without risky biohacks such as unproven gene therapies. A multidisciplinary approach involving these evidence-based strategies “could get it all right,” said Valter Longo, a biochemist who runs the Longevity Institute at the University of Southern California’s Leonard Davis School of Gerontology. (Washington Post)

• What Does Frances Haugen Want From Facebook? I don’t think she loves the product in the current form. I think she considers it to be a threat to democracy and human life. But in terms of the general idea that this technology doesn’t have to be this way and that a company that is committed to Facebook’s stated mission of connecting the world and bringing people closer together, that that is a possible thing. If people just ended up being angrier at Facebook as a result of what she’d done, it was kind of a waste. (Slate)

• 85% of the world’s population has been affected by human-induced climate change Researchers used machine learning to analyze more than 100,000 studies of weather events and found four-fifths of the world’s land area has suffered impacts linked to global warming. (Washington Post)

• An Umpire Took One Too Many Foul Balls to the Face. He Invented a Solution. A former minor-league ump has created a new mask that is designed to minimize the risk of concussion and other head injuries. It’s winning over MLB catchers. (Wall Street Journal)

Be sure to check out our Masters in Business interview this weekend with Chamath Palihapitiya, founder of Social Capital. He began his career as an engineer and team leader at AOL, Facebook, and Slack, but soon moved into Venture Capital. He earned the nickname “SPAC King” for numerous successful deals he has done, and today is a part-owner of the Golden State Warriors.

 

Ever-rising expectations for 2021/2022 US corporate earnings have been the primary driver of S&P 500 returns this year

Source: DataTrek Research

 

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The post 10 Wednesday AM Reads appeared first on The Big Picture.

Note: This is a reprint of a post that was originally published on the CFA Institute Enterprising Investor blog.

Over the last decade or so, we have witnessed the proliferation of a new investment style: the copycat investor. The basic idea is always the same. Look at the quarterly reports of prominent investment gurus and their holdings at the end of each quarter. Then simply invest in the same stocks they hold.

There are obvious problems with that copycat investment style since holdings are disclosed only with a substantial time lag, and you don’t know which stocks an investor has bought and then sold again within each quarter. One can only see the holdings per each quarter end. But if the investment guru is a long-term investor and holds mostly stocks and very little in terms of derivatives or private assets, the copycat strategy might just work.

In the United States, where these copycat strategies have been put into action via ETFs we can by now look at a relatively long track record that – crucially – includes the bear market of 2020. To the best of my knowledge there are three such ETFs out there, all of which exclusively invest in US stocks and should thus be compared to the S&P 500: The Global X Guru Index ETF (GURU) has $74m in AUM and tracks the positions of thousands of hedge fund managers, The AlphaClone Alternative Alpha ETF (ALFA) has $32m in AUM and tracks the holdings of c.500 hedge funds, and the Goldman Sachs Hedge Industry VIP ETF (GVIP) has $220m in AUM and tracks the 50 stocks held most frequently by hedge fund managers.

Going back to the launch date of the GVIP ETF in 2016, we can see that two of these ETFs have materially outperformed the S&P 500. While GURU has underperformed the S&P 500 by 0.5% p.a. in terms of total returns, ALFA and GVIP have beaten the S&P 500 by 2.% p.a. and 2.6% p.a., respectively.

Performance of copycat ETF since 2016

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Source: Bloomberg

Not bad, but that outperformance comes at the price of higher volatility and higher drawdowns during a crisis. The maximum drawdown of the S&P 500 came in March 2020 during the height of the pandemic panic. Back then, the index fell by 19.6%, while GVIP dropped 21.4% and ALFA 25.1%. As the chart above indicates, that meant that the copycat ETFs either lost all the outperformance they created from 2016 to 2020 in one month (as in the case of ALFA) or underperformed the S&P 500 after previously matching its performance (GURU and GVIP). It was only in the recovery since April last year that the copycat funds started to outperform.

And while the GVIP ETF only exists since 2016, we can use the GURU and ALFA ETFs to go back even longer to mid-2012 when these two funds were launched. With almost 10 years of performance to look at, it seems hard to conclude that these copycat funds add a lot of value. Both GURU and ALFA have underperformed by 1.3%p.a. and 1.6%p.a., respectively and had much higher volatility. Note in the chart that the copycat funds tended to do well in the upswing from 2012 to 2015 and then lost all of that outperformance and more in the 2015-2016 correction. It seems very much like these copycat funds are essentially fair weather investments, that don’t perform over an entire cycle. It seems copying from other investors misses one key ingredient for outperformance that I will talk about tomorrow: creativity.

Performance of copycat ETF since 2012

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Source: Bloomberg

Today’s Animal Spirits is brought to you by YCharts Mention Animal Spirits to receive 20% off when you initially sign up for the service. On today’s show we discuss: America is running out of everything Builders hunt for alternatives Shipping costs have finally slumped New Grand Wagoneer Daycare Gen X’s wealth has gone up 50% PSERS is dumping hedge funds 24/7 stock market trading BofA is humping its minimu...

The post Animal Spirits: The 24/7 Stock Market appeared first on The Irrelevant Investor.

Nobody wants cash flow when money costs nothing. This is playing out right now in consumer staples stocks, which, according to Sentimentrader, have shrunk below 6% of the S&P 500 for only the 2nd time in 30 years. I’ll give you one guess as to when that other time was. Yep, you nailed it. There are 26 detergent and toilet paper stocks with a market cap north of $10 billion that have a higher yield than the 10-ye...

The post Nobody Wants Cash Flow appeared first on The Irrelevant Investor.

This is a guest contribution by Leif Kristjansen of Five Year FIRE Escape If you’re thinking about working extra hours or getting a part-time job, stop… or not. Just know that it’s not the best way that you can earn more. Here’s one truth more painful than stepping on a Lego: hard work doesn’t always […]

The post Want to Earn Money More Efficiently? Investing (Not Working) Is The Way To Go appeared first on Sure Dividend.