A quote to think about

"Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic." and "The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists." -Benjamin … Continue reading A quote to think about

There should be no concern about inflation

Longterm inflation expectations should not be sensitive to a sudden move in either oil prices or equity prices as timely monetary policy adjustments from policymakers are supposed to offset those shocks. The main short-term leading indicator of inflation is labor unit costs, which is used as an indicator of inflationary pressure on producers. Interestingly, after … Continue reading There should be no concern about inflation

Gazing at the Future

The starting valuation matters! When P/E starts at relatively lower levels, higher returns follow—paying less yields more. When the market P/E starts at higher levels, subsequent returns are lower. This graphical analysis presets the compounded returns that follow over the subsequent ten years based upon the starting P/E ratio.

How realistic are these … great expectations?

"Great Expectations" may be a fitting description of the mindset of many stock market investors as they raise their glass to what is being called the up coming Roaring Twenties. And novice speculators are on board. This chart from SentimenTrader shows among the smallest of traders, 54% of volume flowed into buying call options over … Continue reading How realistic are these … great expectations?