Preparing for a Double Barreled Bear Market
The pandemic will end, the economy will recover, and interest rates will rise. The bond market’s 40-year bull run is over. Interest rates are rising, and bonds should be sold. The stock market bubble is poised to burst. The economic recovery will drive commodities and cyclical stocks higher. The pandemic will end, the economy will […]
COVID-19 Vaccines Jettison Stocks to New High Prices and Valuations
Political Uncertainty Continues Caution! Historically high valuations and exuberant sentiment Rising interest rates drive growth to value rotation Rising Covid-19 lockdowns could trigger a Q1 correction Antero Resources (AR) and Antero Midstream (AM) are compelling natural gas stocks The great vaccine results, led by Pfizer, AstraZeneca Oxford, and Moderna, have transformed global economic prospects and […]
The Election is Not Over as We Predicted
• Election results will be challenged in court and uncertainty could persist through January 5th. • The Senate appears to stay Republican, leaving a divided government, but that is not assured. • Both a $4 trillion tax hike and a massive spending program now appear unlikely. • Equity markets remain historically expensive, but Pfizer’s vaccine […]
Extreme Election Scenarios
Technology stocks peaked on September 2nd. Our recent cautionary advice sets up election investment opportunities. We examine a blue wave and a potential Amy Coney Barret decided Trump Victory. Invest in value and sell growth. Commodities could boom. Cyclical turnarounds in natural gas and cannabis. 9/2/2020 Technology Peak: Our September letter argued that a generational peak […]
Better Safe Than Sorry
The technology sector peaked on September 2nd and declined in September. Buffett and Shiller indicators show today’s market valuations are extreme. Trump’s COVID-19 diagnosis and the election are adding to market risk. The ratio of growth equities to value equities is at a cyclical turning point. Sell FAANG stocks, QQQ, and the S&P 500 (SPY). Last […]
Two Generational Trends Reverse: Fed Inflation Policy and the Bursting Technology Bubble
39 years ago, the 10-year US Treasury yield peaked at 15.312% and interest rates began declining. On August 27th, Federal Reserve Chairman Jerome Powell presented the Fed’s new policy that “will likely aim to achieve inflation moderately above 2 percent for some time.” This marks a profound shift in a four-decade policy – the inflation fighting posture […]
COVID-19 Vaccine Prospects and Curve Flattening Compel Cyclical Rotation
Sell gold and precious metals like GLD, GDX and SLV. Sell Big Tech like AMZN, AAPL, FB, GOOGL and MSFT. Pivot investments for an economic rebound and pandemic ending. COVID-19 case rate is flattening. 6 COVID-19 vaccines could be ready by year end. Massive Fed balance sheet expansion has created bubble price actions. The COVID-19 […]
COVID-19’s Final Act and Epilogue
The COVID-19 tragedy is entering its final stages. The rate of coronavirus spread and death have slowed. Social distancing policies and stay-at-home orders have mitigated worst case death projections like the estimate of 2,200,000 and 510,000 deaths in the United States and United Kingdom, respectively, by Imperial College of London’s renowned Neil Ferguson. Death projections […]
The Coronavirus OPEC+ Double Black Swan
In response to the COVID-19 epidemic and the March 9th OPEC+ oil collapse–two Black Swans–the S&P 500 declined 35% between February 20th and March 23rd. With effective behavioral and medical mitigation COVID-19 case rates began to slow, weakening the first Black Swan and decelerating the stock market plunge. The second Black Swan began to mend […]
A Rare Opportunity for Income and Growth
MLPs have historically compelling valuations with unusually high yields. MLPs experienced multiple black swan events creating extreme bargains. Relative to Treasuries, MLP prices are three standard deviations below average. Kayne Anderson closed-end funds MLP (KNY) and Midstream Energy (KMF) are bargains. KYN yields 31% with a 17% discount to NAV KMF yields 22% with a […]