The Trouble with China’s Evergrande

Beijing has taken preliminary steps to deal with the failure of Evergrande, China’s second largest property developer.  This is not the end of the story, however, not by a long shot.  The picture too closely resembles the beginnings of America’s 2008-09 financial crisis to ignore, though thankfully it is occurring on a smaller scale.  Before it is resolved, …

The IPO Surge

Even in the face of Covid’s Delta variant, many firms have sought to list on America’s public stock exchanges.  This deluge of initial public offerings (IPOs) carries two seemingly contradictory signals: It reveals tremendous business optimism, on both the economy and for future profits. It announces that the managements of these firms see stocks today as pricey …

Is Washington Running Out of Money?

Treasury Secretary Janet Yellen recently announced that by October the government will come up against its legal debt limit.  Some in the media have interpreted this to mean that Washington is “running out of money,” while others have warned  of a government “default.”  The first characterization is technically true.  Without Congressional action to increase the debt limit, much spending …

Markets Ultimately Are Tethered to Economic Reality

 I got involved in an interesting investment conversation the other day and thought it might inform readers.  The man who engaged me seemed concerned -- no matter what the market was doing.  When stocks run high, as (almost inexplicably) they are now, he confesses to a powerful impulse to sell out for fear that markets cannot sustain their strength.  When …

The Delta Challenge to the Economy and Markets

The Delta variant of Covid 19 has frightened many – in authority, in the media, and in the public.  They worry on three counts:  for their individual health;  for the economy, because if the pandemic worsens, the authorities may re-impose the economic strictures that caused so much economic damage last year; they fear that re-imposition of those strictures …

The Principles

Occasionally –often actually – a reader will ask me to divide my posts into two groups: those that explain general principles of investing and those on specific issues of the day.  Of course, the requests are all phrased differently, but this how I read them.  I can see the impulse behind such requests.  The former can guide investment …

Market Prospects for the New Year

Photo by Lorenzo on Pexels.com The stock market has had quite a run since last spring.  From its lows at the end of March, the S&P 500 Stock Index has risen some 67 percent.  It surpassed its pre-pandemic highs in August and has since gained an additional 12 percent.  Other stock price measures have behaved similarly.  It’s no surprise, …

What Are the Indices?

Financial media, as well as these posts, often employ the word index – the Dow Jones Index, the S&P 500, the consumer price index, and more.  After my long  career manipulating, analyzing, and trying to forecast these indexes, they are as familiar to me as the back of my hand.  But that’s no excuse: I owe my readers clarity, and …

Coulda, Shoulda, Woulda

Photo by Alexander Dummer on Pexels.com Those are three words no sane investor should ever utter.  When someone has had a good idea but didn’t act on it, he or she must realize that this particular opportunity is lost.  The moment has passed, and it is better not to dwell on it, but to think instead on your next action …

Powerful Growth Momentum

Photo by Lukas on Pexels.com Whatever policies the next administration (presumably that of President-elect Joe Biden) adopts – whether good or bad for markets and for the economy – one thing is clear: the country has a powerful growth momentum going into the final months of this year and into 2021.  This is especially evident in …