Everyone knows what it means when something is superior to something else. In this post, I’ll try to explain how I view potential investments in terms of superiority and what a superior investment looks like to me. Let’s say we’re looking at 3 potential investments: A, B & C. If B is superior to C…
I haven’t posted anything on the blog lately because there hasn’t been much to talk about in terms of new updates. Overall, things have been playing out “to a T” this month, following the same playbook as back in October/November (you can read about it here). Early April is when we’ll start to see whether the analog will continue…
Here’s a chart from an article on Bloomberg today illustrating the yield curves of Japanese and German government bonds (the article is worth reading). You have to lend money for 9 years to Germany and more than 13 years to Japan if you want to earn a positive yield to maturity! Some 29% of developed-nation government…
The move in the S&P 500 since January 1st (the selloff, bounce, weak test of the lows and a big surge afterwards) has been so eerily similar to the Aug-Oct move a few months back that it’s a little weird… Even the multiple 2-day retracements in the middle of the surge. The August selloff unfolded after…
Why has the economy been stagnant since 2008? Not the stock market…the real economy: real growth, higher wages, etc. Because we never let the system clear itself of waste, excess, inefficiency and poor investment decisions. I think a good analogy to explain this concept is to think of the economy like a balloon. In order…
Here’s an article from the Financial Times earlier this month that pretty much sums up the current state of the global markets. I think an easy way to envision our global financial system (a credit-based fiat system) so that it’s easier to understand is to think of it like a balloon. When credit is easy and liquidity is being…
The chart below was going around a lot last week. It shows a composition of AP Moller-Maersk (the world’s largest container shipping company) and Sotheby’s (the auction house of high-end art, etc.) in blue vs. the MSCI World Stock Index in orange. That’s a pretty tight correlation and a pretty wide gap we’re seeing right…
With high growth companies leading this recent downturn in the stock market, I thought it would be helpful to explain what drives the direction, or trajectory, of the stock market in the short-term. By short-term, I mean over the next year or so. The trajectory of a stock is the second derivative of the company. We…