Donald Trump

  • 06 Feb
    Sven Sees Recession On The Horizon

    Sven Sees Recession On The Horizon

    • An analysis of employment, interest rates, currency, and inflation suggests a recession is inevitable in the next few years.
    • The FED can’t change economic laws nor protect us from ourselves. On the contrary, the FED will lead us into a recession in order to prevent a future depression.

    Introduction

    The FED didn’t raise rates last Wednesday but they are still on track to raise rates two to three times in 2017. The FED’s goal is to “foster maximum employment and price stability” through economic activity expanding at a moderate pace and inflation rising to, and stabilizing at 2%.

    What we know is that inflation has been slowly rising and will reach 2% relatively soon. The labor market is strong and yields have been increasing in the expectation of higher interest rates.

    A concept that always eludes economists, consequently also members of the FED, is stability. By looking at a model, an economist is trained to think that the economy can be controlled. But history shows that a stable scenario is never the case. In today’s article, I’ll forecast what lies ahead of us by looking at how the last two economic cycles developed. More →

  • 24 Jan
    Will Your Portfolio Explode Or Implode? A Look At Uranium

    Will Your Portfolio Explode Or Implode? A Look At Uranium

    • The short and medium term don’t look that great for uranium as military inventories, idled reactors, and negative sentiment push prices down.
    • In the long term, increased demand from new nuclear reactors should eventually push prices higher and may create tremendous returns given the current low investment environment – think 3 to 10 years.
    • In the long-long term, there is plenty of uranium for the next thousand years.

    Introduction

    Uranium has been in a five-year long price slump with several factors having impacted the decline.

    The 2011 Fukushima disaster forced Japan to idle its reactors. According to the Nuclear Energy Institute, only three reactors of the 42 commercially operable are currently in use in Japan. As Japan represents one third of global nuclear capacity, this blow was tremendous for uranium. More →

  • 15 Dec
    This Could Push The S&P Even Higher

    This Could Push The S&P Even Higher

    • The market looks overvalued but there are three main factors that could push it even higher.
    • A repatriation tax holiday could make $2.1 trillion available for dividends, buybacks, and M&As.
    • Economic growth and inflation could push earnings higher, further inflating stock prices.

    Introduction

    It seems that everyone agrees on the fact that this market is overvalued and borderline irrational. However, there is no correction in sight and the only question to be asked is “how high can this market go?”

    The S&P 500 has jumped 5.4% since Trump won the elections, and is 12.1% higher year-to-date. By adding in the 2% dividend yield, we arrive at an excellent 14% return for 2016. This year’s positive return will make it number eight in a row for the S&P 500 as it has been rewarding investors since 2009. More →

  • 29 Nov
    Consider This Before Jumping Into Education Stocks

    Consider This Before Jumping Into Education Stocks

    • Investing in education stocks falls under the umbrella of political investing which is more like betting.
    • However, the trends in for-profit education aren’t great as a result of a bad, and long-lasting, reputation.
    • Don’t invest in the sector as a whole. Instead, find the healthiest individual companies with positive brands.

    Introduction

    If you’d have run a value screen of the stock market this June, education stocks would have sprung up like mushrooms after a rain. Since then, much has changed with many education names up more than 50%. More →

  • 16 Nov
    The Metal Conundrum After Trump’s Victory

    The Metal Conundrum After Trump’s Victory

    • The current copper spike may not last, but it shows copper’s long-term potential, especially if part of the announced infrastructure program materializes.
    • Unlike copper, other metals aren’t in a sweet spot due to unlimited supply, and recent and large price increases.
    • Gold is the riskiest of all metals, especially now with no more election uncertainty, a stronger dollar, and the expected FED action in December that will have us seeing higher interest rates.

    Introduction

    In the last couple of weeks, metal prices have moved.

    Copper has made an historic surge of 21.5% in the last two weeks, while gold fell 7.5% from its peak.

    As Trump won the election, the expectation of intensified construction and increased investments in infrastructure have pushed copper prices higher while gold suffered as the world didn’t come to an end. The short term moves in metal prices aren’t that significant as they are influenced mostly by speculators, but an analysis can show us where the long-term risks and opportunities lie. More →