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Summary The first and easiest leg of the bursting of the bubble we called for a year ago is complete. While the most extreme froth has been wiped off the market, valuations are still nowhere near their long-term averages. For those with a longer horizon than average, I believe stock...
Summary The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome. The gap is most dangerous when there are potential rewards for pushing your luck. Over the past year, the S&P 500 has retreated only modestly from its Ja...
Summary From a contrarian investing view, everyone remains bearish despite a market that corrected all of last year. Investor allocations, particularly among professional investors, remain extremely light, suggesting a much higher level of caution. With the market negatively positio...
Summary Americas equities, ETPs, corporate bonds, and government bonds all outperformed when compared with previous six-month periods. Corporate bonds continued their impressive run throughout the second half of 2022 increasing revenues over each quarter. 2022 was an outstanding yea...
Summary We believe macroeconomic indicators offer little to cheer about in the first quarter of 2023 - and perhaps through the remainder of the year. Despite Wall Street’s rosier prognostications, we think that a challenging mix of alarming economic inequality, monetary policy he...
Summary Debt has been growing at about a 9% annual rate for the past 50+ years. The true "burden" of debt is the cost of servicing the debt, which is a direct function of the level of interest rates. As a percent of GDP, tax revenues today are somewhat higher than their post-war ave...
Summary Stock and bond market returns were strongly negative in 2022. The S&P 500 Index fell 18%, its worst calendar year decline since 2008 and the 4th worst since 1945. Bond markets recorded some of the worst declines in history. Major benchmarks for both stocks and bonds decl...
Summary The debate about globalization will be interesting as companies increasingly seek alternatives to China and return to more domestic suppliers to solve their global supply chain glitches. The EV earthquake from Tesla’s price cuts is still reverberating, and it will be inte...
Summary Driven by the China reopening, a strong services sector and consumer, a tight labour market, falling inflation and an economy more resilient than expected, the case for a continued rally for stocks is there. These dynamics will likely keep a floor under economic growth for the n...
Summary U.S. equity indexes, having declined sharply in 2022, are fighting the Fed as 2023 begins. The inverted yield curve argues for recession, and equities appear to have discounted a significant probability of at least a mild recession. The bottom line is that, unlike the last f...