<Click in chart for larger image> Bloomberg.com – U.S. Small-Cap Rally Sends Valuation 26% Above 1990s In one corner of the U.S. equity market, investor enthusiasm is exceeding the frenzy of the Internet bubble. Small-cap shares tracked by the Russell 2000 Index (RTY) have rallied for seven straight quarters, the longest stretch ever, sending valuations… Continue reading Are Small Cap Stocks Overvalued?
The Financial Times – Mohamed El-Erian: Tranquil markets underprice geopolitical risk Trend is not necessarily investors’ friend this time Markets have been sanguine about geopolitical risk for several years now, a phenomenon illustrated by the relaxed approach they have taken to Ukraine’s crisis. There are understandable reasons for this, but contrary to a popular saying,… Continue reading Geopolitical Risk and Russia
MoneyBeat (WSJ Blog) – A Chart That Spells Trouble for Abenomics One of Japan’s economic problems is the tendency of companies to sit on cash instead of putting it to productive use, and new data from the Bank of Japan show the problem isn’t getting better. As this chart shows, cash and deposits held by… Continue reading Japan
Forbes – Jim Rogers Wants To Put All His Money Into This Country. Is It The Next China? Forget diversification. Jim Rogers has identified the world’s next great investment opportunity, and in a recent interview the famed guru said he is willing to put all his considerable fortune there. So where is the planet’s best place… Continue reading Jim Rogers Likes The US
Zero Hedge – Albert Edwards Destroys The “Solid Earnings Growth” Myth My colleague Andrew Lapthorne published an update on the US profits situation in the wake of the Q4 reporting season. He writes “At first look, growth in US net income last year looks remarkably good. With nearly all S&P 500 names having reported year-end… Continue reading Earnings Growth
The New York Post – CNBC cheerleaders Small investors are in danger of getting screwed, thanks to big activists, their Twitter accounts and the business media that cover them, says Doug Kass of Seabreeze Partners. This summer, activists such as Carl Icahn, Dan Loeb and Bill Ackman have been hogging the financial headlines and brawling… Continue reading CNBC Cheerleading
CNN/Money – Jeremy Grantham: The Fed is killing the recovery The money manager argues that the Fed’s interventions have ruined the very recovery it was supposed to stimulate and that the market is poised to disappoint investors. A few weeks ago, Jeremy Grantham, the co-founder of money management firm GMO, called newly appointed Federal Reserve… Continue reading Jeremy Grantham Does Not Like The Fed
The Wall Street Journal – Jon Hilsenrath: Inside Fed Statement Lurks Hint on Rates Federal Reserve Chairwoman Janet Yellen caused a stir last week when she suggested the central bank might start raising short-term interest rates a little sooner than investors were expecting. In focusing on that, Wall Street might have glossed over news of… Continue reading Hilsenrath Tells Us To Ignore Yellen’s “Six Month” Projection
<Click on chart for larger image> The Financial Times – Fed’s expanding repo role risks backfiring The biggest change for the repo market is that the Fed now has a near 17 per cent share of daily trading, thanks to its move last September to introduce a “reverse repo” facility. Known as the RRP, the… Continue reading The Fed’s Repo Facility
The Wall Street Journal – Shiller Metric Carries Warning for Stocks Many have quibbled with Yale professor Robert Shiller’s use of a cyclically adjusted price/earnings ratio. Few can fault his timing in calling out perhaps the greatest stock mania of all time with the publication of “Irrational Exuberance” in the spring of 2000, though. Mr.… Continue reading P/E Ratios
<Click on chart for larger image> Bloomberg.com – Foreign Grip Loosens on Treasuries as U.S. Investors Buy Overseas creditors such as China and Japan enabled the U.S. to spend its way out of the recession as they gobbled up 80 percent of the nation’s Treasuries. Now, their holdings are dropping toward the lowest level in… Continue reading Who Owns Treasuries?