Search Results for: cape

Suppose that you had the magical ability to foresee turns in the business cycle before they happened.  As an investor, what would you do with that ability?  Presumably, you would use it to time the stock market.  You would sell equities … Continue reading →

“My metric for everything I look at is the 200-day moving average of closing prices.  I’ve seen too many things go to zero, stocks and commodities.  The whole trick in investing is: ‘How do I keep from losing everything?’  If … Continue reading →

Markets and economies are agglomerations of interconnected human behaviors.  It’s a surprise, then, that in the fields of finance and economics, the work of history’s most famous behavioral psychologist, B.F. Skinner, is rarely mentioned. In this piece, I’m going to present … Continue reading →

Suppose that you’ve been given $1,000,000 of cash in an IRA to manage.  Your task is to invest it so as to generate the best possible risk-adjusted return over the next 12 months. You don’t have to invest it immediately–you can … Continue reading →

“You know, Paul, Reagan proved that deficits don’t matter.  We won the mid-term elections, this is our due.” — Vice President Dick Cheney defending a second round of tax cuts against the objection of Treasury Secretary Paul O’Neill, shortly after … Continue reading →

Those who expect U.S. equities to deliver poor returns going forward can cite two compelling reasons in defense of their expectation: (1) Equity prices are significantly elevated relative to underlying earnings fundamentals.  The S&P 500’s trailing price-to-earnings ratio, for example, … Continue reading →

In this piece, I’m going to do five things: First, I’m going to clarify the purpose of Total Return EPS, what it’s trying to accomplish.  In a single sentence, the purpose of Total Return EPS is to convert dividends into … Continue reading →

In late December of 2010, with the S&P 500 pushing through the mid 1200s on the heels of QE2 exuberance, my favorite financial economist–the great Robert Shiller–made what will likely turn out to be a very inaccurate prediction.  To be … Continue reading →

James Osborne of Bason Asset Management recently published an excellent critique of the investment concept of “Intrinsic Value.”  I urge readers to take a minute and go check it out.  In this piece, I’m going to try to tackle a question … Continue reading →

In a previous piece, we examined the inner workings of a gold-based fractional-reserve free banking system–the monetary system that was roughly used in the United States for much of the 19th century and before.  The system works as follows.  Customers … Continue reading →