CASSANDRA'S HYPOTHESIS

In Greek mythology, Cassandra was the daughter of King Priam and Queen Hecuba of Troy. Her beauty caused Apollo to grant her the gift of prophecy. However, when she did not return his love, Apollo placed a curse on her so that no one would ever believe her predictions. In any case, Cassandra sees a lot of controversial things happening during the next few years. As Cassandra so aptly says...."Forewarned is Forearmed."

This Day in History

Monday, August 31, 2015

Massive Deflation Is Happening Now??? | Seeking Alpha

Investors are witnessing significant deflation. Abundant supplies of commodities have led to trickle down of prices in nearly all commodities from silver to corn this year. Natural gas is trading at $2.81 per mcf, which is extraordinarily cheap, utilities are burning natural gas while reducing the usage of coal. A barrel of oil will remain low for a long time due to abundant supplies. Corn and soybean prices will remain low because of a near-record crop this fall. World stock markets are showing signs of a correction. Stock markets tend to correct in September and October and, if oversold, present a possible buying opportunity. It's difficult to predict but there is ample evidence a correction is in the works. Following U.S. stocks' -2.1% rout on Thursday, the broad market S&P 500 (NYSEARCA:SPY) was negative for the year, posting a -1.1% decline through Aug. 20.

Saturday, August 29, 2015

5 Lessons From The S&P 500 Market Crash For ETF Portfolios? | Seeking Alpha

We review the past few trading days and try to draw some lessons from the rapid expansion in volatility. Naturally, it is still very early, and this edition of the crash is yet to run its course, and more lessons surely wait in the wings. However, we can draw a few lessons about portfolio construction that this market stumble has revealed.

Friday, August 28, 2015

Are These Oil Dividends Safe? | Seeking Alpha

The price of oil has declined a lot since the summer of 2014. The West Texas Intermediate [WTI] in Cushing, Oklahoma has declined from a high of $107.52/barrel in June 2014 to a low of $41/barrel in August 2015. This severe decline in prices has reduced the earnings power of many energy dividend growth stocks, which are engaged in exploration and production.

Wednesday, August 26, 2015

How China Fits Into The Global Puzzle??? | Seeking Alpha

China is dominating the headlines lately because of the alarming 30% plunge in the local A-share equity market (i.e. shares in mainland China-based companies that are generally only available to Chinese citizens) and the government's panicked response. However, it's difficult for investors to gauge the impact of these recent developments on the global macro and market picture. For this reason, I think it's important to recall some basics about China's economic goals and the impact of its local markets on the rest of the world.

Monday, August 24, 2015

The Best Companies Of The Machinery Industry - August 2015 | Seeking Alpha

While ModernGraham supports the bottom-up approach to investing, many investors do utilize the top-down method, whereby an industry is selected before the company itself. With that in mind, this article will take a brief look at the best companies of the machinery industry, selecting the most promising investment opportunities within the industry, and giving a broad look into the industry as a whole.

Friday, August 21, 2015

The Bond King's Dire Warning? | Seeking Alpha

Myles Udland of Business Insider reports, Gundlach: If oil goes to $40 a barrel, something is 'very, very wrong with the world'

Wednesday, August 19, 2015

The Pareto Principle In Dividend Investing | Seeking Alpha

The Pareto Principle is an economic term invented by an Italian economist Vilfredo Pareto in the 20th century. It is also called the 80-20 principle, meaning that 80% of effects come from 20% of the causes. Vilfredo observed that 80% of the land in Italy is owned by 20% of the people. The ideas behind this principle are wide ranging in multiple fields, including investing. I am a firm believer that a small minority of the investments I make today will end up becoming so successful that they will produce 80% of my investment gains over the next 40-50 years. This is why I am really careful about selling, even if a stock I own is up by 1,000%.

Tuesday, August 18, 2015

Video: What Puerto Rico Means For Muni Bond Investors | Seeking Alpha

While owners of Puerto-Rico-related municipal bonds have a bleak prospect, investors in other muni bonds can expect virtually no impact. Apart from Puerto Rico and a few other volatile outliers, we believe the municipal bond market remains fundamentally healthy.

Monday, August 17, 2015

Our Bipolar Economy | Seeking Alpha

Janet Yellen and her colleagues at the U.S. Federal Reserve (Fed) will spend the coming weeks and months contemplating the timing of an increase in short-term interest rates. While a cynic might describe the Fed's behavior as "reactionary," the Fed itself prefers the term "data-dependent."
As the Fed monitors incoming data, it will be searching for signs of the overall strength of the economy and any associated inflationary pressures. In so doing, the Fed is likely to find a two-speed economy, with the general health of the U.S. consumer improving rapidly, while the industrial side of the economy continues to struggle.

Friday, August 14, 2015

The Fed's Deflation Problem? | Seeking Alpha

  • U.S. employment rose at a solid clip in July and wages rebounded after a surprise stall in the prior month, increasing the likelihood the Fed will raise rates in September.
  • While traditionally the Fed has solely focused on the domestic economy to set interest rate policy, the specter of global deflation will weigh heavily in its decision.
  • If the Fed ignores global weakness and raises rates, it will create a huge deflation problem. How should you position your portfolio in this environment?

Wednesday, August 12, 2015

Canadian Dividend Telecom Comparison: BCE Vs. Rogers Vs. Shaw Vs. Telus | Seeking Alpha

At the end of June, I produced a complete analysis of the five biggest Banks in Canada. While this post was featured on Seeking Alpha, I thought of publishing this second Canadian sector analysis on my blog. I think you will like seeing which telecom is the best one to hold for a dividend growth investor.  I will highlight the differences in their business models, dividend profiles and other important fundamentals along with their current stock valuations.

Tuesday, August 11, 2015

For Many in Spain, a Heralded Economic Recovery Feels Like a Bust - The New York Times

He used to be an interior designer, outfitting shops for one of Spain’s biggest clothing store chains.
But that was years ago. Recently, Angel Puyalón, 50, was just hoping to get a call back for a job sorting recyclables. Mr. Puyalón said he would be glad for any work now. His unemployment benefits are finished. He and his wife can no longer pay their mortgage, and they are relying on a food bank to eat.

Monday, August 10, 2015

Retired Investors Don't Buy Bonds Until? | Seeking Alpha

However, risk is a multifaceted concept. The risk of losing all your money is one of the investor's greatest fears. Virtually all high-quality bonds eliminate this loss of principal risk. But there are additional risks that bonds do not always protect investors from. Fixed income investments provide little or no inflation protection, especially when interest rates are as low as they are today.

Friday, August 7, 2015

Crisis Watch - Where Lightning Could Strike Next | Seeking Alpha

It is a subject that has fixated investors since the calming of the financial crisis more than six years ago. Coming out of an experience where U.S. stocks lost more than half of their value and the global financial system nearly imploded, many were left in shock and have been bracing in the years since for the eruption of the next major market contagion. Perhaps such worries will end up being nothing more than the perpetual wall of worry that will continue to propel markets higher in the coming years. But the financial system still has major systemic risks nearly a decade removed from the last major crisis outbreak. As a result, it is reasonable to consider exactly how any such future market contagion might play itself out.

Wednesday, August 5, 2015

How The Economic Machine Works by Ray Dalio - YouTube

Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.

Monday, August 3, 2015

The All Weather Portfolio - How Ray Dalio's Strategy Works

The All Weather Portfolio is an investment philosophy developed by Ray Dalio and the name of fund offered by his hedge fund Bridgewater, one of the largest hedge funds in the world. However, you will also see detailed “all weather” portfolios on many investing sites. These portfolios don’t mimic the “all weather” fund offered by Bridgewater, whose exact investments remain secret, but invest based on the “all weather” philosophy.

Friday, July 31, 2015

Ray Dalio Discussing the Economic Machine at the New York Times DealBook Conference - YouTube

Ray Dalio Discussing the Economic Machine at the New York Times DealBook Conference.

Wednesday, July 29, 2015

China’s Global Ambitions, With Loans and Strings Attached - The New York Times

Where the Andean foothills dip into the Amazon jungle, nearly 1,000 Chinese engineers and workers have been pouring concrete for a dam and a 15-mile underground tunnel. The $2.2 billion project will feed river water to eight giant Chinese turbines designed to produce enough electricity to light more than a third of Ecuador.
Near the port of Manta on the Pacific Ocean, Chinese banks are in talks to lend $7 billion for the construction of an oil refinery, which could make Ecuador a global player in gasoline, diesel and other petroleum products.

Bridgewater Turns Bearish On China? | Seeking Alpha

Summary

  • The world’s biggest hedge fund has turned on the world’s fastest-growing economy.
  • Bridgewater Associates LP, one of Wall Street’s more outspoken bulls on China, told investors this week that the country’s recent stock-market rout will likely have broad, far-reaching repercussions.
  • Is it time to throw in the towel on China, emerging markets, commodity and energy shares?

Tuesday, July 28, 2015

As China's Economic Power Increases, Questions Arise - The New York Times

 I was waiting for a train in a remote town in southwest China last year when a young man marched up to me and barked out a question: Did I understand and accept that China is a great power?  It was a telling moment.

Monday, July 27, 2015

Why Pensions Are A (Big) Black Swan | Seeking Alpha

When talk turns to what might derail today’s debt-driven “recovery,” the big names and easy stories get most of the attention: China with its soaring debt, volatile equities and heavy-handed intervention; Japan with its stratospheric debt and science fictiony demographics; Greece, which needs no explanation; the developing countries with their weak currencies and mountain of dollar-denominated debt. And of course America’s triple bubble of stocks, bonds and derivatives.

Saturday, July 25, 2015

Why Greece Should Leave the Eurozone - The New York Times

THERE are not many issues on which I agree with my colleagues Paul Krugman and Joseph E. Stiglitz and the former Greek finance minister Yanis Varoufakis. But one of them is the view that an exit from the eurozone would be advisable for Greece.

Friday, July 24, 2015

Credit Deflation And Gold | Seeking Alpha

There is a common view in the financial markets that credit deflation is bad for gold prices, because gold nowadays is regarded as an asset to be sold in the scramble for cash when people are forced to pay down their debts. When asked by Congressman Ron Paul his opinion on gold four years ago, Ben Bernanke replied it was not money, just another asset - appearing to confirm this view.

Wednesday, July 22, 2015

How Socialism Destroyed Puerto Rico, and How Capitalism Can Save It | Euro Pacific Capital

While Greece is now dominating the debt default stage, the real tragedy is playing out much closer to home, with the downward spiral of Puerto Rico. As in Greece, the Puerto Rican economy has been destroyed by its participation in an unrealistic monetary system that it does not control and the failure of domestic politicians to confront their own insolvency. But the damage done to the Puerto Rican economy by the United States has been far more debilitating than whatever damage the European Union has inflicted on Greece. In fact, the lessons we should be learning in Puerto Rico, most notably how socialistic labor and tax policies can devastate an economy, should serve as a wake up call to those advocating prescribing the same for the mainland.  

Monday, July 20, 2015

Are Municipal Bond Funds Still Safe? | Seeking Alpha

Greece and its creditors have come up with a bailout plan that puts the debt crisis tensions at bay at least for some time. However, the Puerto Rico crisis has emerged and should also cause investors to worry. A crumbling economy, massive public debt and increasing government deficit have pushed Puerto Rico to the brink of default, and it wants the right to declare bankruptcy. Puerto Rico owes $73 billion, which it is unable to repay.

Saturday, July 18, 2015

The 9 Best Stocks For Value Investors This Week...Modern Graham

We evaluated 29 different companies this week to determine whether they are suitable for Defensive Investors, those unwilling to do substantial research, or Enterprising Investors, those who are willing to do such research. We also put each company through the Modern Graham valuation model based on Benjamin Graham’s value investing formulas in order to determine an intrinsic value for each. Out of those 29 companies, only 9 were found to be undervalued or fairly valued and suitable for either Defensive or Enterprising Investors. 

Friday, July 17, 2015

The Permanent Portfolio Is Dead??? | Seeking Alpha

The permanent portfolio was first designed by investment analyst and libertarian politician Harry Browne, who called it a "fail-safe" investment. The idea was simple enough to appear elegant: a portfolio of equal weightings of four asset classes.

Thursday, July 16, 2015

Wednesday, July 15, 2015

10 Companies Benjamin Graham Would Invest In Today – July 2015

Out of the multitude of companies, which ones would legendary value investor Benjamin Graham buy today?  I’ve compiled ten great companies that fit the ModernGraham criteria, based on Benjamin Graham’s methods. The companies in this list pass the rigorous requirements of either the Defensive Investor or the Enterprising Investor and are undervalued by the market. 

Monday, July 13, 2015

The Greek Deal Is a Disaster for Greece, and Maybe for Europe - The New York Times

On Monday, there was yet another deal. But this time it is one that pushes Greece into the abyss, even if financial markets don’t acknowledge it just yet and even if what happens next is deeply uncertainty.

Friday, July 10, 2015

Signs of a Growing Hush in China’s Economy - The New York Times

 As China’s stock market tumbled over the last month, some wealthy apartment owners began trying to sell. Shopping malls became quieter. And customers at automobile dealerships across the country asked to defer delivery and payment for previously ordered cars.
While share prices have rebounded modestly in recent days, many business owners in China remain nervous, as they start to notice a perceptible economic chill.

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