US stocks echoing the 2000 bubble high

by Chris Becker Predictions are hard to make, especially about the future and while trying to overlay charts from different periods can lead to the gambler’s fallacy, it’s when fundamentals collide with technicals that you should pay attention. For US stocks their are some alarming parallels with the end of the 2000 bubble today, according


Golden Rules for Tax Efficient Investing

Fairfax has been running a series of articles (see here and here) on the collapse of Great Southern and the hardships it has caused, a timely reminder of the perils of mixing debt, investment and tax breaks. Almost every case consists of investors borrowing to invest on the advice of a “trusted professional”, large amounts


Bitcoin cracks under regulatory pressure

More crypto shenanigans, from Bloomberg: Bitcoin mining, the computing process that makes transactions with the cryptocurrency possible, is about to become more expensive for some after China ordered mining facilities to close. ViaBTC Technology Ltd., which runs the fourth-biggest bitcoin mining collective, is raising maintenance fees for some of its clients Friday to 50 percent


Bitcoin volatility is normal – for Bitcoin

As the Aussie dollar makes new highs, going through 79 cents against USD, Bitcoin and other cryptocurrencies have sold off once again. It doesn’t take much for the volatility to spike with news – rumors actually – that the South Korean Government is flagging a potential a ban on cryptocurrency trading, sending bitcoin prices down over 20%


Bill Gross doubles down on bond bear market

  Here’s the latest from bond guru Bill Gross the Janus Henderson:Bonds, like men, are in a bear market. For both, it’s hard to say when it all began. There was no Helen Reddy “I Am Woman” moment back in June 2012, and then again in July 2016 when the 10 year Treasury double-bottomed at 1.45%, but


Will Bitcoin follow the silver 1980 bust?

Bitcoin mania has similar parallels with the epic silver bubble of the 1970s: Silver went through a huge bubble, moving from $6 to nearly $50USD per ounce in just over a year due to the Hunt brother’s cornering of the market. At the peak they owned one third of the world’s supply. Sound familiar? The


WSJ drinks MB’s kool-aid on China

Wall Street Journal on a theme dear to our hearts – Chinese growth slowing: The Business Cycle Is Different This Time—Thank China Diverging Chinese and U.S. growth are behind the confusion in global markets right now Commodities and stocks have started 2018 with a bang. U.S. oil is trading over $60 a barrel for the


Is the big bond boom over?

Bill Gross says so: The 10-year U.S. Treasury yield climbed to the highest level in more than nine months, leading Bill Gross at Janus Henderson Group to declare a bond bear market just ahead of a deluge of sovereign debt sales. The benchmark U.S. yield rose as much as six basis points to 2.54 percent, a


Bracing for a near term melt-up

I wanted to follow up on Jeremy Grantham’s comments from yesterday and run through some of GMO’s asset allocation views from the perspective of an Australian investor. Jeremy Grantham & Co. at GMO have put out two thoughtful (as always) pieces in the last 3 weeks. I rate the team there highly and so when


A closer look at the latest RBA Chart Pack

The RBA has released its latest monthly Chart Pack. Here are some interesting visuals to consider going into next month’s meeting: First up, looking abroad where the G-3 economies continue to have flat wage growth but modest unemployment figures since the GFC: Headline inflation is also still flat below 2%, but rising from the 2015


Grantham: the great meltup is here

Everything is at record or multi year highs it seems; US stocks, Japanese stocks and even the ASX200. Usually at these peaks, the howls from the bears would start to be heard in equal measure with the ebullient crowd of bulls, as the latter group look around nervously for more buyers. But not this time, with


Stocks to short for your grandkids

Richard Bookstaber recently put out an interesting post on sectors that he thought had problems on a 30-40 year view.  Richard is the author of a number of good finance books – I liked A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation and I have his new one The End


Earnings down on Trump tax cuts?

A few companies have come out recently talking about the effect of Trump tax cuts and flagging large losses/write-downs. From the FT:   in the short term, the cut in corporation tax to 21 per cent will lead to a revaluation of all BP’s US deferred tax assets and liabilities. On current estimates, the impact


New Years resolution: Sell Bitcoin

Not having a good start to 2018 (I prefer 12018, let’s get the Holocene going!) for Bitcoin, with prices down more than 6% on the first day of trading. Having nearly reached $20,000 in mid-December, its now at $13,814 after almost cracking $13,000… Chart from Here’s Bloombergs take on first day of year trading,


Tax cuts are wrapped, waiting on Trump to sign the card

Both branches have now approved the Trump tax cut bill, which is now just waiting on Trump’s signature. His signature didn’t come immediately, with the suggestion that Trump may be holding off to delay some of the spending cuts until 2019. My view continues to be that the tax cuts are a short-term sugar hit for the


Sell the fact?

Buy the rumour, sell the fact is a well-worn truism.  The question is whether the Trump tax cuts will fall into this pattern (i.e. the stock market increases while the potential of tax cuts exist, only to fall once the legislation is actually passed) is a good one and there are many arguments for and


Santa rally continues

With Trump looking increasingly likely to leave tax cuts under the Christmas tree for all the good boys and girls (i.e. anyone who is rich), and lumps of coal for anyone concerned about climate change, the US market powered on again overnight: The US dollar took a breather:   Oil was largely flat overnight, but two


Has Bitcoin jumped the shark?

by Chris Becker The new gold? The future of currencies? The proto-not printable money? However you describe Bitcoin, it seems there’s only one way to describe its trajectory: up! Last night saw Bitcoin move over 6% in a single session to settle above a new record high above $4600USD: Chart via ZH:   With volumes


QE driving stocks to most expensive level ever

by Chris Becker As market watchers fret over every word and detail uttered by the central bank oligarchs in Jackson Hole, Wyoming tonight, it bears (sic) remembering where stock valuations have been driven to due to the largesse of QE. While the bond market bubble pushes to greater heights – so high that we’re running


Draghi drags QE into normalcy

by Chris Becker The central banker elite meet in Jackson Hole, Wyoming for their annual symposium later this week, but ECB President Mario Draghi made traders sit up and notice a day or two early last night with a speech in Germany. What was surprising, particularly in the midst of the anti-QE brigade, was his


Tesla’s enigmatic stock price

by Chris Becker Tesla is impossible to value, so says Matt Debord at Business Insider: The company is fuelled financially by a “story” about the future. It could be a decade before it’s possible to properly value the company. Tesla is easy to value, so says Tim Worstall at Forbes: People might even be misguided


Euro splintering, Italian style

by Chris Becker The union currency experiment – where over 20 sovereign states gave up their ability to enact independent monetary policy in exchange for a single currency is, at face value (sic), a successful attempt at bringing together disparate economies to maximise efficiency. Sound Germanic? Well it should, because its basically a devalued Mark, allowing


Where Trump goes, the USD follows

by Chris Becker Reporting and analysing the demise of the Trump Presidency is not hard work, but it bears well in protecting your portfolio. While a handful of US stocks have benefited since the election, leaving most other markets in limbo, currency-land has been upended as the realisation of a stalemated Congress that cannot enact