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Bank Earnings Confirm What We Already Knew (About the U.S. Economy and Federal Reserve)

By: Justice Clark Litle

Jul 16, 2020 | Educational

Earnings season is underway, and we heard from some of the largest U.S. banks this week. The reporting confirms what we already knew: There is no V-shaped recovery whatsoever, and the Federal Reserve is doing a lot for Wall Street (though not Main Street). Among the four banks we heard from — Goldman Sachs, JPMorgan Chase, Citigroup, and Wells Fargo…

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Boom-Time Memories of a Bust Gone By

By: Justice Clark Litle

Jul 15, 2020 | Educational

Try to guess the visionary entrepreneur we are thinking of based on the following clues: He is especially fond of the letter “X,” including it in things he has named. His net worth — at valuation in the tens of billions — put him on among the top 10 richest people on the planet. He once vowed to take the…

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There is Plenty of Bullishness Here

By: Justice Clark Litle

Jul 14, 2020 | News

On Monday of this week, your TradeSmith Daily editor was accused of being a “permabear.” Normally we don’t mind insults. Sticks and stones and all that. But the “permabear” label feels odd when, in truth, we are aggressively bullish right now, and have commentary and portfolio positions to prove it. In terms of TradeSmith Daily commentary, we have pounded the…

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How Silicon Valley Engineered a Retail Trading Mania

By: Justice Clark Litle

Jul 13, 2020 | EducationalNews

2020 will be remembered for kicking off a global pandemic. But it will also be remembered for a market mania, driven to a surprising degree by bored sports gamblers, millennials taking a flyer with stimulus checks, and day-trading retail investors new to markets overall. We know the Federal Reserve provided psychological support (through an implied promise to support markets no…

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Lockdown-Related Market Risk is High and Rising

By: Justice Clark Litle

Jul 10, 2020 | News

The U.S. stock market has benefited, tremendously, from a belief that the Federal Reserve will support the market at all costs. It has also benefited from a belief that, whatever happens next with the pandemic, the worst is over from an economic perspective. Investors are eager to put COVID-19 behind them. What happens, then, if multiple U.S. states implement new…

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Warren Buffett is Back in the Game, Sort Of

By: Justice Clark Litle

Jul 09, 2020 | News

Warren Buffett is back in the game, sort of. He is only spending 7% of Berkshire’s $137 billion cash pile, but it’s a start. In the aftermath of the 2008 financial crisis, Buffett acted boldly. His distressed-asset deals helped support blue chip companies like General Electric, Goldman Sachs, and Bank of America. This time around, though, Buffett has not been…

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Jim Rogers is Dead Wrong about Bitcoin

By: Justice Clark Litle

Jul 08, 2020 | Educational

When it comes to Bitcoin, Jim Rogers is sorely misinformed. To be clear, Rogers deserves great respect as a macro investor. As a co-founder of the Quantum Fund along with George Soros, Rogers had one of the greatest performance runs of all time. In the 1990s, he wrote an incredible book called Investment Biker. The book chronicles a two-person trip…

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The U.S. Stock Market is Starting to Look Like China’s

By: Justice Clark Litle

Jul 07, 2020 | Investing Strategies

U.S. capital markets are no longer free. If they were quasi-free markets before, they are more or less state-directed markets now. This assessment comes from Ray Dalio, one of the most connected hedge fund managers in the world. Dalio founded Bridgewater Associates, one of the largest hedge funds in the world, in 1975. His personal net worth is in the…

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When a Bounce is Not a “V” (2020 versus 2009 and 1982)

By: Justice Clark Litle

Jul 06, 2020 | Educational

On July 2, the June 2020 U.S. jobs report was released. Nonfarm payrolls jumped by 4.8 million, the largest monthly gain in U.S. history, when a gain of only 2.9 million jobs was expected. The outsized beat of economists’ expectations was seen as bullish for stocks, at least initially. A larger than expected decline in the unemployment rate, to 11.1%,…

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Opting Out of State-Directed Capitalism

By: Justice Clark Litle

Jul 02, 2020 | Educational

“Turn on, tune in, drop out” was a counterculture phrase from the 1960s. Perhaps it is time to revive it. The thing to “turn on” in 2020 is awareness of Bitcoin… So that one can “tune in” to a digital store of value… And then “drop out,” or rather opt out, of state-directed capitalism.   Make no mistake, state-directed capitalism is…

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