The Freedom Watch

Europe Puts on Its Rally Cap

"Positive surprises and improving economic growth aren’t the only indications that the region’s economy is becoming healthier. Manufacturing appears to be on the mend. Europe has low valuations compared with the rest of the world. Take a look at the normalized price-earnings (P/E) ratio, which is trading at 'close to a record valuation low,' according to Morgan Stanley Research. Compared with U.S. stocks and world equities, European stocks are trading at a significant discount. So as countries including Germany, France and Italy recover, we have solid reasons to believe their eastern counterparts will enjoy a boost as well." Continue reading →

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Where is This Legendary Investor Putting His Money?

"Although Jeremy Grantham is not as celebrated as Warren Buffett or Jim Rogers, his status as a legend in the investment world is undisputed. Grantham is the co-founder and chief investment strategist at Grantham Mayo van Otterloo (GMO), where he oversees $100 billion in assets under management. He has built much of his investing reputation over his long career by successfully steering his clients away from bubbles and crashes. Grantham recently published his outlook for the next seven years. In it, he predicts that most asset classes will return little in the next few years. But there are a few exceptions." Continue reading →

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Warren Buffett’s bubble cash-out strategy revealed in 38-year-old letter

"A recently released 1975 letter offers new insight into how early Buffett was to grasp both the difficulties of pension fund management and the inability of Wall Street to provide adequate solutions. Perhaps even more valuable is the way the letter throws light on Buffett's approach to value investing. Buffett tries to act not like a typical fund manager but like a company owner thinking about buying another company. The crucial ingredients: patience, to get a good purchase price; courage, to stick with your investment if the business is doing well but the market doesn't agree; and a willingness to sell into a bubble when, as so often happens, one comes along." Continue reading →

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Bill Bonner: Sooner or later, markets change

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"What's a share in a company really worth? What's a bond worth? Heck, what's the dollar itself worth? All of these questions will draw the same reply: it depends. Among the things it depends on is the 'trust' in the society...in its leaders...in its capital structure...and in its future. When the sun is shining, it's easy to have trust in a society. It's when the chilly winds blow that the question marks begin to fly. You see them picked up by the gusts of wind like plastic bags...floating around until they are snagged on some barren tree. That's when it gets interesting...when the hopes and hallucinations that undergirded the boom give way. Our guess is that investors are about to go back to school." Continue reading →

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Why Conservatives Accept High Taxes, the Federal Reserve System, and Fiat Money

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"The alliance between the modern welfare state and the modern warfare state is based on the legitimacy of an ever-growing federal government: an ever-growing federal deficit, ever-increasing tax rates, and the permanence of the Federal Reserve. The liberals do not want to change the prevailing political system, and neither do the conservatives. The liberals want their welfare checks to go out, and so to the conservatives. The liberals want to push foreign nations around, and so to the conservatives. This is why taxes will not go down, the Federal Reserve will not be abolished, and the gold coin standard will not be re-established until such time as the Great Default bankrupts the federal government." Continue reading →

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Jim Rogers: Financial Calamity – It’s Coming, Be Worried, Be Careful

Jim Rogers: Financial Calamity – It’s Coming, Be Worried, Be Careful

"Multi-millionaire investor Jim Rogers predicts, 'They're going to take money wherever they can. . . . They're going to take our bank accounts and retirement accounts.' Rogers concludes by saying, 'We've had perilous times, and it's going to get worse. . . It's coming, be worried, be careful.' Join Greg Hunter as he goes One-on-One with Jim Rogers, author of 'Street Smarts, Adventures on the Road and in the Markets.'" Continue reading →

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Fed’s Janet Yellen: Debt Free Multi-Millionaire

"Federal Reserve vice-chair, Janet Yellen, who is widely believed to be under consideration to be nominated by President Obama to succeed Ben Bernanke as Fed chair, is a debt free, multi-millionaire. The total does not include the pensions the couple earned at the University of California, Berkeley, where both worked as professors, nor Ms. Yellen’s pension from the Federal Reserve Bank of San Francisco, where she was president from 2004 to 2010, nor the home they own near campus. The disclosure forms do not include the salary earned by Mr. Akerlof as a senior resident scholar at the International Monetary Fund." Continue reading →

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Was Keynes a Brilliant Investor?

"Keynes' initial foray into investing led to a smash up. He lost everything he had unwisely borrowed and had to be bailed out by his parents. He did not do well in the 1920′s. He was taken unawares by the the 1929 Crash and also by the 1937 rout. In both instances, he came perilously close to being wiped out again because of very concentrated holdings and continuing use of leverage. In short, Keynes was a speculator, at the same time that he criticized speculators and the 'casino' atmosphere of the market. The article does disclose Keynes’s very large gold mining stock position in the 1930′s but fails to note the irony of this holding or his private praise of gold as a portfolio diversifier." Continue reading →

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US Interest Rates Will Continue to Rise

"The recent rise in long-term interest rates is just the beginning of an increase that will punish investors who are seeking extra yield by betting on long-term bonds. The relatively low interest rates on both short-term and long-term bonds are now causing both individual investors and institutional fund managers to assume duration risk and credit-quality risk in the hope of achieving higher returns. That was the same risk strategy that preceded the financial crisis in 2008. Investors need to recognize that reaching for yield could end very badly yet again." Continue reading →

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Housing Recovery Mirage Over; Bernanke Hoping to Retire Before It’s Noticed

"At the end of 2010, the interest rate on a 30-year mortgage was just under 5 percent… 4.97% to be more precise. Over the next 28 months actions taken by the Fed pushed that rate down as low as 3.42%. So… wonders of wonders… miracles of miracles… soon we were witnessing the inexplicable recovery of our previously decimated and hopelessly underwater housing markets from coast-to-coast. Stories of streets being paved with the gold of home equity and sprawling rental empires were being passed along from Realtor to mortgage broker throughout our apparent Land of Opportunity… the worst was finally over… everyone said so… even on T.V. so it simply had to be true." Continue reading →

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