The Mechanics of Negative Interest Rates
May 13, 2020 | Educational
Earlier this week we discussed the bond market’s ominous message, while emphasizing a forecast for negative U.S. interest rates. Scott Minerd is talking about negative interest rates, too. This is notable because Minerd, the chief investment officer for Guggenheim Investments, oversees $270 billion worth of assets. In a note published on May 10, Minerd said the following: I see the…
The Bond Market Does Not See Quick Recovery — In Fact It Sees the Opposite
May 12, 2020 | Educational
There is no V-shaped economic recovery. We won’t see a U-shape, either. Instead, there is greater likelihood America’s recovery will have an L-shape — a flat crawl after a hard drop. And that’s only if we’re fortunate, and do a better job in the virus fight. If we get the next part wrong, America could wind up looking like Europe…
The Federal Reserve Does Not Have Magic Powers
May 11, 2020 | Educational
Jerome “Jay” Powell, the Chairman of the Federal Reserve, is not a wizard, and the Federal Reserve does not have magic powers. We point this out because — based on arguments we are hearing as to why everything will be “back to normal” soon — a fair chunk of analysts and investors appear to think otherwise. Of course, they don’t…
What’s Going on With Sweden?
May 08, 2020 | Educational
While the Western world zigged, Sweden zagged. The United States, Canada, the United Kingdom, and most of Europe — including Sweden’s Nordic neighbors, Norway and Finland — issued shelter-in-place orders to deal with COVID-19. Sweden did not. Meanwhile, in country after country, the virus is wreaking havoc. And yet Sweden appears to be floating above it all. No shelter in…
In a Real Apocalypse, Bitcoin Beats Gold
May 07, 2020 | Educational
A few weeks ago, your mild-mannered TradeSmith Daily editor did something out of character. At a private outdoor shooting range, we received tactical training instruction — from a professional firearms instructor, who is also a family friend — on the proper handling and use of a 12-gauge pump-action shotgun. The outing was fun, but the purpose was serious. We were…
Warren Buffett is Worried About the Future
May 06, 2020 | Educational
If you had invested broadly in the U.S. stock market on Aug. 30, 1930 — the day Warren Buffett was born — it would have taken 20 years to get your money back. That gloomy anecdote was shared by Warren Buffett, the Oracle of Omaha himself, at the annual Berkshire Hathaway shareholder’s meeting on May 2. Normally the annual Berkshire…
Bitcoin is the Purest Form of “Hard Money” Ever Created
May 05, 2020 | Educational
Bitcoin could be one of the greatest public investment opportunities in all of recorded history. That’s not hyperbole. We are serious about this — and we come to that view having studied Bitcoin intently for more than two years, and global markets overall for more than 20. There are venture-capital opportunities and private-investment opportunities that can deliver multi-thousand percent returns….
How Silicon Valley is Helping in the Virus Fight
May 04, 2020 | Educational
As we have explained in these pages, America — and the world — is at war with a virus. The novel coronavirus is an invisible foe that has penetrated all national defenses. It has established beachheads in every major city and every state, and it has resulted in more American casualties than the 19-year Vietnam War. As Balaji Srinivasan has…
How “Never Waste a Good Crisis” Applies to Public Company CEOs
May 01, 2020 | Educational
Winston Churchill has been credited with saying, “Never waste a good crisis.” The idea is that, in times of turmoil, you can make big changes that otherwise would have been blocked. When the status quo dominates, it’s hard to get buy-in for radical proposals. But when chaos abounds and everything is in flux, what was once considered radical might now…
“Black Swan” Funds Demonstrate Why Shorts Go Best with Longs
Apr 30, 2020 | Educational
For so-called “Black Swan” funds, March 2020 was the best month in years. And yet, after a multi-year stretch of poor performance, a lone burst of gains underscores why bearish wagers should pair with bullish ones — that is to say, why shorts work best in a supporting role for longs. The term “Black Swan” was popularized by a best-selling…
