Investment/Trends

20 Investment Insights from Peter Lynch

"5. Stocks are most likely to be accepted as prudent at the moment they’re not. For two decades after the Crash, stocks were regarded as gambling by a majority of the population, and this impression wasn’t fully revised until the late 1960s when stocks once again were embraced as investments, but in an overvalued market that made most stocks very risky. Historically, stocks are embraced as investments or dismissed as gambles in routine and circular fashion, and usually at the wrong times." Continue reading →

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WATCH OUT BELOW: S&P 1987 Compared with S&P 2013

"It's a terrible mistake to just look at the data from two time periods and forecast the trends to continue. However, as I have been pointing out at the EPJ Daily Alert, there are many reasons to suspect another crash may be on the way: 1. Money supply growth has declined dramatically since the start of the year. 2. There is a natural tendency for the consumption-savings ratio to move towards consumption, starting in September. BTW: In the summer of 1987, money supply, in the manner I track it in the EPJ Daily Alert, collapsed, just like it has this summer." Continue reading →

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The Joke Shack of the Housing Sector

"REITs, or real estate investment trusts, are companies that own and manage real estate. Before December of last year, there was no such thing. Now there are three, with more on the way. Do these vehicles deserve a spot in your portfolio? I’m going to make the case that they do not. I say this as someone who has been a housing bull. I still think housing is OK, but not as attractive as it was. The investment case for rental homes was plain and I made the case a number of times in these pages in 2011 and 2012. I even bought a rental property for myself. And it’s worked out very well so far. I was far from the only one who saw such an opportunity." Continue reading →

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Gold Declines Trigger Brief Trading Halt

"Exchange operator CME Group Inc. said it briefly halted gold trading on Thursday morning to prevent excessive price volatility. Stop Logic, a type of circuit breaker that pauses trading for between five and 20 seconds, was triggered in the December-delivery gold futures contract at 2:54 a.m. EDT and lasted for 20 seconds, the spokesman said. A set of automatic sell orders were triggered as futures neared $1,350 an ounce early in European trading hours, said George Gero, a vice president and precious metals strategist with RBC Capital Markets, in a note. The sales sent gold prices as much as $10 an ounce lower in the space of a minute, triggering the trading pause." Continue reading →

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The Treasury Secretary on How Unstable U.S. Government Finances Are

"Treasury Secretary Jack Lew made the following statement during remarks today before the Economic Club of Washington D.C.: '[W]e are relying on investors from all over the world to continue to hold U.S. bonds. Every Thursday, we roll-over approximately $100 billion in U.S. bills. If U.S. bond holders decided that they wanted to be repaid rather than continuing to roll-over their investments, we could unexpectedly dissipate our entire cash balance.'" Continue reading →

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Krugman: “The Employment Story is Highly Unimpressive”

"Even Paul Krugman gets it. He writes: 'The measured unemployment rate is down a lot — in fact, at 7.3 percent it’s almost exactly the same as it was in November 1982 1984, when Ronald Reagan won big on claims of restored prosperity. But most of the fall in unemployment reflects lower labor force participation rather than job growth. Even if we focus on prime-age workers, so as to net out demographic effects, the employment story is highly unimpressive.'" Continue reading →

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Swiss Fund Centralway Invests $250k In Bitcoin Exchange Buttercoin

"Swiss company builder Centralway is opening a new seed and early stage investment arm that will invest $50 million per year into 20 to 30 startups — including both small seed-stage investment and larger Series A rounds. It said its 'preferred case' will be to do a smaller investment at the seed stage, followed by larger investment into the same company at a later round. Buttercoin‘s model is to open a local Bitcoin exchange in each country where it operates — starting with Europe (where it’s due to launch in around two months’ time) — and then partner with local money transfer businesses to gain legal compliance in the country." Continue reading →

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Canadian billionaire predicts end of US Dollar as world’s reserve currency

"Canadian billionaire businessman Ned Goodman predicts the end of the U.S. Dollar as the world's reserve currency. He predicts the transition out of the U.S. Dollar will become, '...quite ugly.' He delivered the lecture at Cambridge House's Toronto Resource Investment Conference 2013 on Thursday, September 12, 2013." Continue reading →

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Everything’s Fixed, Everything’s Great

"Much to the amazement of doom-and-gloomers, everything's been fixed and as a result, everything's great. The list is impressive: China: fixed. Japan: fixed. Europe: fixed. U.S. healthcare: fixed. Africa: fixed. Mideast: well, not fixed, but no worse than a month ago, and that qualifies as fixed. Everything's fixed, because everybody that can create their own money can do so without limit or consequence. It's a perpetual money machine, and that fuels a perpetual growth machine. No limits on credit and debt means no limit on spending. Free money for everyone and everything--it's unbelievably easy. The solution to every problem is at hand: create more money and credit, in ever larger sums." Continue reading →

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