Investing

I have a guest post over on Diginomics about the 3 monetary paradoxes of Bitcoin. Since yesterday’s post was about not investing in gold, it seems like a good segue to advise you not to invest in Bitcoin either. For that matter, don’t keep your savings in cash. All these assets have one thing in […]

Unfortunately I only have time for a short post today. For another project I created the visualization below, indexing NGDP, 10-year treasuries, inflation and gold at 100 starting in 1933. For 10-year treasuries and inflation, the lines show what $100 would have become by applying 10-year yield / inflation rate in each year, compounded. What do […]

What drives stock valuations? Is it corporate earnings expectations? Overall economic growth? Treasury yields? I’ve gotten into a few debates about the relationship between treasury yields and valuation metrics. The problem is always causation. Do low interest rates cause people to pour money into stocks in a chase for yield? Is high inflation harmful to valuations […]

In a past article, I explored which countries’ stock markets were safest for your money. Not long after, I saw this article on Warren Buffett taking an interest in German companies. Because Buffett seeks out value like a heat-seeking missile, I wanted to look into this. First, I turned to some Federal Reserve Economic Data (FRED). A […]

In the late 1990’s, the internet bubble inflated and burst. In the mid 2000’s, we watched housing prices inflate and burst, along with stock prices again. Since 2009 we’ve watched stock prices climb higher and higher, and we’re left wondering, now, are we’re reliving past bubbles? Or are we at a fair valuation considering low interest […]

There seems to be a lot of confusion among analysts, economists and investors as to what higher interest rates mean for stock markets. A lot of folks are eating up the fallacy that higher interest rates mean tighter monetary policy. While that could be the case, it’s not necessarily so. But that myth is causing markets […]

Do high P/E ratios scare you? In a sense they should. The average Shiller P/E of the S&P 500 since 1928 is  16.75. Now it stands at 19.82. That implies the market should drop 16%, or earnings will have to make up the difference. In a past article I look at the same scatter as […]

I’ve read a few pieces on how investing in certain sectors can help you achieve out-sized returns. As a value investor, I was curious as to which sectors looked cheapest. Unfortunately there’s not a great place to go for the sort of data I wanted. So I picked the three largest stocks by market capitalization per sector in this Bloomberg/PwC […]

Since the 1980’s, the American financial and monetary establishment has gotten better and better at bundling risk. This bundling can be a boon, but sometimes leads to catastrophe. Most famously, bundled mortgage securities blew up the banking industry in 2008. Lending anyone money is risky. This is true whether you’re getting a promise of interest or […]

The best temperament for an investor is serenity. While others fear the crash, buy and snap up bargains. If others are greedy, then sell and take home your profit. But what do you do when everyone’s afraid, but markets keep going up? I saw this interview from Robert Shiller that shook my serenity. After all, I’m […]