Posts by Andrew Stotz
High PE Means That without Earnings Surge Market Rally Is at Risk
Chart of the Day: Rally was partially fueled by near-zero interest rates. Without a sustainable rise in profit margins US stock market rally could be finished.
Read MoreThird Stock Market Boom since 1994, Already Longest, about to Be Strongest
Chart of the Day: The US stock market is now up 215%. Of the last three stock market rallies, this is the longest at 97 months and it is about to be the highest.
Read MoreIf Trump Sparks US Profit Recovery Then Market Run Could Continue
Chart of the Day: Relatively low US profit margin means there is a chance for profit recovery. But for now, stock prices don’t seem to be supported by earnings.
Read MoreFed Has Hit Its Dual Targets, Time to Get Back to Normal Rates
Chart of the Day: Fed has an inflation target of 2% and an unemployment target of 5%. With both targets now hit the pressure on the Fed is to start to raise rates.
Read MoreTiny Interest Rate Hikes Are Painful for US Gov’t
Chart of the Day: Low rates allowed US Government debt to double with no rise in interest spending. But, if rates slowly double interest as a percentage of total spending would double to 10%.
Read MoreInterest Rates Down, Stocks Up and Vice Versa
Chart of the Day: Since 1987 short-term rate fell 91% to 0.5%. Long-term rate fell 62% to 3.0%. Falling interest rates, stocks up 745%.
Read MoreUltra-low US Rates and Very High Gov’t Debt
Chart of the Day: Normal rate of 2.7% would mean massive 5x increase in interest burden. The interest cost burden of a normal interest rate is now massive.
Read MoreNormalizing after 7 Years of Extreme Stimulus?
Chart of the Day: Short-term rate of zero for seven years following the global financial crisis in 2008. Normal rate of 2.7% would mean massive 5x increase in short-term rates.
Read MoreIndia Is Not the New China, at Least Not Yet
Opportunities for India lie in increasing movement of labor away from the agricultural sector, increasing overall labor force participation and increasing female labor force participation. These opportunities are also challenges.
Read MoreNo-Nonsense Advice for Your Financial Future
The Investor’s Manifesto does a great job of explaining basic finance fundamentals. Bernstein writes no-nonsense advice for his reader’s financial future and drives his points home with precision and directness. For example his argument in favor of saving: “Save as much as you can, and do not stop saving until you die.”
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