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 […]
The five safest countries for your money (in four graphs)
US stock markets have bounced back from a series of mini-corrections during the start of the year. It seems like there’s nowhere to go but up. But it might be time to start worrying about valuations. I’ve made the case in previous articles that low interest rates = higher stock prices as a matter of […]
Money is two things, and the source of all our problems
I read a good book review in the Economist about Making Money: Coin, Currency and the Coming of Capitalism. This one sentence captures the problems faced by central banks around the world. In essence, history has seen a battle between money’s role as a store of value (which requires a restricted supply) and its role […]
Should you do an adjustable rate mortgage?
The Fed must tolerate higher asset prices to achieve higher wages
I’ve been thinking a lot about inflation, banks and China. After reading “France, Gold and the Great Depression”, I was wondering how the western world’s “secular stagnation” could be related to China’s rise. Before the Great Depression, France and the rest of the developed world had opposite problems. France had just gone through a strong […]
The Tremendous Value In Chinese Banks (If You Can Stomach The Risk)
There are three questions you should ask before buying a stock. Is it cheap? Does it have a future? Is it safe? If you can answer those three questions with a resounding yes, then you’ve found value. But when you ask those questions, you need the broadest and deepest sets of data possible. For example, […]
Buying houses, debt traps and expectations
My wife and I are looking at houses, and I’m struck by the amount of activity happening around us (southwest of Portland, OR). Especially in new developments, every office we walk into has multiple couples signing contracts. Talking to a mortgage broker, I was surprised to learn that the income-to-debt ratio they accept is 45% […]
Man up and pick your stocks
What’s lurking on bank balance sheets?
Yesterday I did a post on “How safe are your bank stocks from tightening monetary conditions?” Today I want to delve further into the four major US banks’ balance sheets to see what surprises we might find. All four banks — Bank of America (BAC), Citigroup (C), JP Morgan Chase (JPM) and Wells Fargo (WFC) […]
Is more inflation just around the corner? What bank balance sheets say
Markets seem confused as to whether demand is now solid and deflation fears a thing of the past, or if it is just about to come back with a vengeance. We’ve had solid job growth (inflation!), tanking oil prices (deflation!), Swiss National Bank refusal to follow Euro devaluation (deflation!), ECB quantitative easing (inflation in Europe? […]