Interest Rates

  • 05 Mar
    Stocks Are Crazy Risky Now – We’ll Reveal The Perfect Hedge

    Stocks Are Crazy Risky Now – We’ll Reveal The Perfect Hedge

    There’s some volatility in the markets that we haven’t seen for a long time.

    The increased volatility is a sign of nervousness and the market is looking for direction.

    No one knows where things will go in the short term as that’s impossible to know. Even Warren Buffett never fails to mention how he has absolutely no idea about where markets will go in the short to medium term.

    If we look at things from a macro perspective, the economy is at its limits and we’ve seen the actual GDP finally reach the potential GDP. More →

  • 26 Feb
    Let’s Talk Inflation & Interest Rates

    Let’s Talk Inflation & Interest Rates

    • The fight between interest rates and stock valuations has started.
    • The only smart thing to do now is to take a long-term perspective and estimate what financial markets will look like in two years. Few think that way.
    • Corporate profits in relation to GDP tell you what will happen in the long term.



    Introduction

    Last Wednesday, the FED released the minutes from its latest meeting. Soon after the minutes were published, the market went into reversal mode. More →

  • 16 Feb
    This Debt-Driven Economy Is Fragile – Here’s How Fragile

    This Debt-Driven Economy Is Fragile – Here’s How Fragile

    • We’ll discuss how fragile this debt driven economy is from a bottom up perspective.
    • You may be surprised by the impact of minor interest rate changes.
    • You should reconsider owning cyclical stocks that depend on consumer debt at this point in the economic cycle.



    Introduction

    Things have been good for 9 years now. This is a fact.

    Today we’ll discuss how and why things could change because when things are good, people and things become weak and fragile. I’ll connect the dots with student debt, mortgages, and consumption to show how it’s all a mere illusion, or at least a big part of it is. More →

  • 29 Jan
    At Davos, Dalio’s Message Tells You Everything You Need To Know

    At Davos, Dalio’s Message Tells You Everything You Need To Know

    • Dalio didn’t say that cash is trash or that it is stupid to hold cash.
    • I’ll explain in more detail what Dalio said.
    • Is the biggest risk nobody is seeing—with the exception of Dalio—political in nature?



    Introduction

    I love Davos because there is always a Bloomberg interview with beautiful mountain scenery and a freezing Ray Dalio.

    Perhaps because of the cold, Dalio always wants to keep the interview as short as possible and spits out all his thoughts on the economy, markets, etc. Some of it will be misinterpreted by the market, but the key message is always extremely important to hear. More →

  • 16 Jan
    Higher Inflation Could Be A Game Changer

    Higher Inflation Could Be A Game Changer

    • Inflation has finally reached the FED’s target of 2%.
    • Employment and GDP levels indicate we are in the late part of the economic cycle.
    • Will the FED lose control over its monetary policy?



    Introduction

    Global economies are all finally doing very well, or at least just well. You can’t expect economic skeletons like Europe to do very well. Nevertheless, monetary policies across developed markets are still supportive.

    Supportive policies, from the ECB still buying bonds on the open market, to the BOJ buying ETFs, and the U.S. lowering taxes, indicate that all these economies would be very different without supportive policies. More →

  • 15 Jan
    The “Sleep Well At Night” Investing Strategy

    The “Sleep Well At Night” Investing Strategy

    • Investing is personal and should be more about sleeping well at night than returns.
    • I hope you sleep well at night because you are well prepared for what might happen and not because you don’t know the risks.
    • Unfortunately, sleeping well will always come at a short term cost but I think it’s well worth it.



    Introduction

    Two and a half years ago, I took out a mortgage with a fixed interest rate (3.55%) even though my friend from the Dutch National Bank was telling me to take the lower variable interest rate (2.5%) because the probability that interest rates would rise was very small and I could always change the variable rate to a fixed rate if necessary. More →

  • 10 Jan
    Why The Current Financial Environment Is Crazy

    Why The Current Financial Environment Is Crazy

    • It has never before been so easy to get money. The consequence is bubbles.
    • Some bubbles are innocuous and even funny, other bubbles are extremely dangerous.
    • The most important thing is to know how to behave in this environment, and we’ll discuss that today.



    Introduction

    Financial bubbles are always repeating. Sometimes they are small, just like the meal delivery businesses (like Blue Apron) craze of the last two years. Sometimes they are a bit bigger, like cryptocurrencies have been lately. Sometimes they are huge, just like the current stock or debt markets. More →

  • 28 Dec
    Swimming Naked?

    Swimming Naked?

    • The rising tide has really lifted all boats, but it’s extremely important to dive deeper and see who is swimming naked.
    • This will allow you to protect yourself from extreme downside and to potentially also earn something with some cheap hedges.
    • There are companies with no organic growth that have price to earnings ratios of 500…



    Introduction

    It will soon be nine years that we have been enjoying a rising economic tide. Economic policies around the world are still accommodative, and corporations really don’t have difficulties in finding financing.

    However, if you have been through economic kindergarten, you know that the only thing sure in economics is cyclicality. Therefore, it’s important to see who will be swimming naked when the tide shifts, how to be protected from such a possibility, and perhaps even how to take advantage of it. More →

  • 21 Dec
    Here’s How To Hedge For 2018

    Here’s How To Hedge For 2018

    • Everything looks good with the FED raising rates, but a look under the hood says otherwise.
    • There is a possibility that we won’t see three interest rate hikes in 2018.
    • When things look so good that they can’t get any better, it’s time to leave the party.



    Introduction

    On Monday, we discussed what the main global risks are. Today I want to dig deeper into how to start thinking about portfolio positioning around these risks.

    The FED has started with its tightening policy which creates two investing opportunities. One depends on if the FED manages to increase rates three times in 2018 as planned, inflation rises to 2%, and the economy keeps growing at current rates while unemployment remains low. In such a scenario, everything that has worked well in the last 8 years will work well in 2018. More →

  • 19 Dec
    Will The FED Protect Your Wealth?

    Will The FED Protect Your Wealth?

    • The wealth gap is growing. Invest like the rich.
    • The FED will be forced to protect stocks and real estate prices as they are the key to current economic growth.



    Introduction

    The Boston Consulting Group interviews 250 investors annually who have a combined wealth of $500 billion. The results usually aren’t shocking except for this year. 65% of those investors think the market is overvalued. More →

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