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Tag: Stock Market Crash

Are Stocks, Bonds And Real Estate Really At ‘Peak Valuation’?

Are Stocks, Bonds And Real Estate Really At ‘Peak Valuation’?

Benjamin Graham was known for his love of using historic data to analyze companies and historic market trends. Graham like to use long-term data series’, stretching across several decades, to come up with the most reliable figures. Both Deutsche Bank and Credit Suisse have taken a similar approach to data analysis and the two banks put together research documents every year that look at the long-term asset returns. Deutsche Bank released its annual Long-Term Asset Return Study a few days ago. The bank used 200…

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Market Sentiment

Market Sentiment

“…The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to…

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Chinese Debt; The Looming Crisis

Chinese Debt; The Looming Crisis

2.6 trillion yuan, or around $0.5 trillion of Chinese non-financial corporate debt is expected to come due during 2014. This figure includes principal repayments and interest and is the largest figure on record for Chinese companies. Last year gear ratios among non-financial Chinese companies reached 93%, while the average across Asia remained below 70% and has done for the past decade. But with so much debt coming up for repayment, Chinese companies are facing an increasingly hostile lending environment. Back…

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Actively Managed Funds Consistently Outperform Trackers

Actively Managed Funds Consistently Outperform Trackers

According to research conducted by FE Trustnet, the average active UK growth fund has beaten an average, standard tracer fund over a period of one, three five and ten years. To say that this is astonishing is an understatement. Many market commenters have been reiterating the benefits of passive of active for some time now, and even market oracle, Warren Buffett has bet against actively managed hedge funds, making a $1 million bet with hedge-fund manager Protégé Partners that a…

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Derivatives Market Reaches New High

Derivatives Market Reaches New High

A combination of fractional reserve banking, bank leverage, money printing, derivative manufacturing and government borrowing has been the reason behind much of the global GDP growth over the past 40 years. This market is now worth a staggering $1 + quadrillion,  that’s $1,000,000,000,000,000 of essentially worthless derivatives where buyers only need to put up a fraction of the purchase price. Add in $250 trillion of government debt around the world and things start to look pretty shaky. During 2012, the…

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COMEX Deliverable Gold Bullion Reaches a 10-year Low

COMEX Deliverable Gold Bullion Reaches a 10-year Low

Back in August, the number of claims per physical ounce of gold stored in COMEX warehouses reached 50. That’s 50 owners for every ounce of gold available for delivery. The physical gold rout has continued and the number of owners per physical ounce, now stands at 54.6, a level not seen since 2003. This comes at a time when the global demand for physical gold is rising, led by Asia where Chinese gold consumption is expected to grow 29% this year….

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Gold Will Never be a Safe Haven Again

Gold Will Never be a Safe Haven Again

Gold futures  Tuesday morning, demonstrating that the fast-moving computerized marketplace is not isolated to the traditional equity securities world. Gold futures, the indicative price at which gold can be brought for at a certain time in the future, dropped $5 in one second on the 2nd of July as fast-moving computerized trading hit the traditional safe haven. Nanex, a provider of real-time data to traders, noted that 700 trades in 1,000 gold future contracts of gold for August delivery drove the price…

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Margin Debt Hits an All-time High

Margin Debt Hits an All-time High

Margin debt, or the amount that has been borrowed by investors from banks or brokers in order to pay for US securities, reached a grand total of $379.5 billion in March – the second highest in history. The highest level was $381.4 billion back in July 2007 . The problem is that large amounts of borrowing, on average about 50% of the equity position can exacerbate losses as the market starts to fall as investors rapidly sell down positions. In…

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