facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck

The Best of What They Said and I Read Week Ending 9/15/2019

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

Barron’s – September 13, 2019 – The Dow’s 1.6% Gain Hid Turmoil Beneath the Market’s Surface -  Ben Levisohn

  •  “… The Dow Jones Industrial Average gained 422.06 points, or 1.6%, to 27,219.52; the S&P 500 index rose 1%, to 3007.39; and the Nasdaq Composite advanced 0.9%, to 8176.71. But those numbers entirely miss the point. It was a week when everything that had been working stopped working, when losers were suddenly winners. Value stocks, the market’s cheapest, had under performed growth stocks by 14 percentage points since the start of 2018. Pity those betting that recent trends would continue. This past week, value gained 2.4%, while growth dropped 0.5%. The battered small-cap Russell 2000, meanwhile, gained 4.9%. It was as if the meek had inherited the market.”

  •  “…In this cycle, stock market resilience is the main factor dissuading us from predicting imminent recession,” Ramsey writes. “But the 2000-01 experience reminds us that stock market trouble can sometimes precede a recession with an extended lead time.”  Of course, there are big differences between the dot-com era and today. One is the massive amount of pessimism today versus the optimism of nearly 20 years ago. Then there’s the fact that the cost of capital, as signaled by the level of real rates, is far lower today than it was in 2000, says Michael Arone, chief investment strategist at State Street Global Advisors. That fact makes companies with fast growth but no profits attractive to investors today, he says, and is the reason that value stocks will continue to lag behind as long as real interest rates remain near zero.”

The Kiplinger Letter – September 13, 2019  

  • “…India’s economy used to be the envy of the world. Now it’s cooling off. A series of problems…decelerating industrial output, dry weather hurting crops, tensions with neighbor Pakistan…have combined to slow India’s GDP growth rate from more than 7% in recent years to less than 6% now. The Indian central bank will do what it can to help by further cutting interest rates, but that won’t do much. Any greater escalation of the dispute with Pakistan would be a major blow to India’s economic prospects. The two nations have long vied for control of Kashmir, but the standoff is tenser than usual…a worrisome situation that bears watching.” 

  • “…A start-up has a new idea to bring drone delivery to local businesses: Put a large launch pad in the parking lot of the restaurant, dry cleaner, convenience store or other retail outlet that could benefit by flying lightweight goods to nearby homes in less than 10 minutes. The firm Flirtey unveiled a logistical hub that fits in a parking space. Drones take off from the roof of the van-size structure. Flirtey and others want shipping to cost customers as little as traditional methods. It will take a while for drone delivery to be cost-effective across the board. One major study shows the market, as a whole, won’t hit profitability until 2030. Tech giants will gladly weather losses for years to reach profitability. The payoff? Potentially billions of dollars in profits. But it will cost billions to get there. When it comes to drone delivery, expect to hear more noise about, well, noise, as delivery test flights ramp up in 2020. The propeller sound can “drive people nuts,” say industry insiders. Researchers are working on quieter designs, but the buzzing won’t go away. Drone firms say nearby drones sound like a dishwasher or passing car. The nuisance of drone noise will roil more than a few communities.” 

U.S. Global Investors - Investor Alert – August 23, 2019 – Frank Holmes 

  •  “…There are two headline items that transpired this week that I want to make sure all of my readers are aware of.  Passive indexing has surpassed active investing.  There has been a massive rotation from growth stocks to value stocks, with big moves in financials, energy and materials.”

  • “…Way back in January, I showed you that the price of gold had beaten the S&P 500 Index over a number of different time periods, including the month, quarter, year… and even the century (so far!).  It was brought to my attention recently…that the yellow metal has also outperformed arguably the greatest living investor, Warren Buffett.  For the 20-year period, gold has returned more than 485 percent, beating Warren’s Berkshire Hathaway, which was up 426 percent.”

  • “We’re seeing greater appetite for gold and gold-backed investments right now as concerns of a global economic slowdown gain momentum. Not only has the price of gold been up for five of the past six months—it’s down so far in September—but August fund flows into bullion-backed ETFs were the highest in more than a year.”

Get Acquainted meeting

We offer a complimentary 45 minute “Get Acquainted” meeting. 

Contact Us