The Lotka-Volterra Equations: Nature’s Ode to Boom and Bust
Oct 23, 2019 | Investing Strategies
Why should investors pay attention to cycles? For the same reason farmers pay attention to seasons. To maximize the harvest, a farmer has to know the given season — and the seasons are a four-part cycle that repeats year after year. It would make no sense for the farmer to try and harvest crops in the spring (or plant them…
Negative Interest Rates Could Be Coming to the USA
Oct 18, 2019 | Investing Strategies
Ever since the financial crisis of 2008, monetary policy has had an “Alice in Wonderland” feel. The whole thing has been a crazy experiment — and the experiment is still ongoing. The next bizarre chapter could be negative U.S. rates. Negative interest rates have already shown up in bond markets all around the world. If negative rates come to America…
What Investors and Farmers Have in Common: The Enduring Power of Cycles
Oct 16, 2019 | Investing Strategies
What do investors and farmers have in common? Their work is dominated by cycles. A farmer who does not understand cycles — the ebb and flow of the seasons, a time to plant, a time to harvest, and a time to let the ground lay fallow — will not remain a farmer for long. Investors, too, have much to gain…
The Unicorn Bubble Has Popped
Oct 11, 2019 | Investing Strategies
Over the past year, multiple Silicon Valley “unicorns” — companies privately valued in the billions, or even tens of billions — came to market via initial public offerings (IPOs). Investors seemed enthusiastic, scooping up the shares of these loss-making companies no matter how much cash they burned. WeWork appeared to be the worst of them all; we wrote about the…
The Zero-Commission Brokerage War Could Make or Break Your Retirement
Oct 09, 2019 | Investing Strategies
The zero-commission brokerage war is a wild development for investors. There is real danger here, but real opportunity, too — for those who know what to do. To put it another way, some investors will benefit greatly from the zero-commission brokerage war. Others will look back and wish it never happened. This “May Day Part II” event (you’ll read what…
Fossil Fuels Lost. Clean Energy Won.
Oct 04, 2019 | Investing Strategies
Clean energy stocks are having a fantastic year in 2019. The best-performing non-leveraged ETF in the United States is the Invesco Solar ETF (symbol TAN), up 54% on the year as of this writing. Other renewable plays, like the Invesco Clean Energy ETF (PBW), and the iShares Global Clean Energy ETF (ICLN), have also done quite well. But this is…
What Investors Can Learn From Rogue Traders
Oct 02, 2019 | Investing Strategies
There was another rogue trader in the news recently. This creates an opportunity to dissect the rogue trader’s mindset, and to extract a valuable lesson for investors. A rogue trader is someone who makes a bad trade, covers it up with deception, and winds up costing their employer a huge amount of money when they get caught. The typical rogue…
Did California Just Crush the Gig Economy?
Sep 27, 2019 | Investing Strategies
Did California just crush the “gig economy?” It’s a real possibility, and you should stay away from Uber (NYSE: UBER) and Lyft (Nasdaq: LYFT). It was already an easy call to avoid UBER and LYFT. Both names had an initial public offering (IPO) earlier this year. As of this writing, they are down about 30% and 25% respectively. If California’s…
“Repo Madness,” Lending Market Turmoil, and the Federal Reserve
Sep 25, 2019 | Investing Strategies
In recent weeks, short-term U.S. lending markets have been in turmoil, requiring emergency shore-up actions from the Federal Reserve. The nickname for it on Wall Street is “repo madness,” because the problems involve the “repo market” and the overnight repurchasing rate. On Sept. 17, a crucial lending rate briefly spiked above 10%, more than four times its expected level, due…
The Market’s Non-Reaction to the Saudi Oil Facility Attacks
Sep 20, 2019 | Investing Strategies
How crazy were the drone and missile attacks on Saudi Arabia last weekend? So crazy that the Saudis are becoming oil importers. Seriously. A Sept. 19 Wall Street Journal headline reads: “To Keep Exports Flowing, Saudi Arabia Looks to Import Oil.” Of all the wild scenarios a market strategist could dream up, if someone had said “the Saudis will be…
