Market Forecast

  • 18 Oct
    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    • The data indicates that the likelihood of a crash similar to October 1987 is the same today as it was then.
    • This doesn’t mean the stock market will crash tomorrow.
    • It only means that you should know yourself extremely well and relate your investments to your risk reward appetite. Only this can prevent you from the biggest mistake investors usually make, i.e. sell at the bottom of a bear market in total panic and capitulation.



    Introduction

    On Monday October 19, 1987, the stock market crashed a whopping 22.6% in one day. Is it possible that the same could happen tomorrow? Well, let’s compare the current market and to the one back then. More →

  • 09 Oct
    Put A Ring On It – Why It Might Be Time To Invest In The Diamond Industry

    Put A Ring On It – Why It Might Be Time To Invest In The Diamond Industry

    • Diamond producers expect a supply gap to form from 2019 onwards, which is a great fundamental indicator.
    • However, the current environment isn’t the best, and has made miners cheap. Many of them are down more than 30% this year.
    • I’ll discuss mining costs, risks and rewards, how to invest, and analyze I’ll two miners.




    Introduction

    A recent Bloomberg article described how diamond stocks have performed extremely badly in the last year. More →

  • 26 Sep
    The Best Strategies For Investing Late In The Economic Cycle

    The Best Strategies For Investing Late In The Economic Cycle

    • What has to be done in the late part of the economic cycle isn’t a secret. I’ll describe the how and what.
    • However, as always in investing, the question is why we aren’t doing the rational thing.
    • I’ll ask you a question that will help you answer how much and whether you should rebalance.

    Introduction

    Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.

    No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →

  • 25 Sep
    These 5 Charts Say A Recession Is Near

    These 5 Charts Say A Recession Is Near

    • A recession usually takes everyone by surprise.
    • The current environment is ripe for a recession, we just need a trigger.
    • The stock market will react as investors react, which is usually completely irrationally. Be prepared.

    Introduction

    The latest FED meeting didn’t give us much news.

    The monetary policy remains accommodative with the interest rate between 1% and 1.25%, while the balance sheet normalization program is purely cosmetic with minimum monthly asset sales.

    We shouldn’t expect anything else from the FED as their objective is to maintain full employment and stability. As long as there isn’t significant inflation, the low interest rates help lower the unemployment rate. More →

  • 16 Aug
    Why You Need To Prepare For All Hell To Break Loose

    Why You Need To Prepare For All Hell To Break Loose

    • The last stock bull market was influenced by central bank activity, that’s clear. What’s next is the question.
    • I’ll describe three potential scenarios that could impact our financial system.
    • One is good, the second is interesting, while the third is ugly.

    Introduction

    The general expectation is that the FED will start selling securities in order to tighten monetary policy, that the ECB will slowly stop buying, and that nothing will change in Japan. Nevertheless, such a situation would lead to an environment where the additional liquidity created by central banks finally dries up. As the liquidity provided by central banks is the main reason behind this bull market, should investors begin to cut their positions?

    In order to elaborate on this question, we’ll first analyze the situation, the expected situation, and then possible scenarios in order to give you the best answer on how to prepare yourself for what might happen. It’s extremely important to do so and, as you will see, it isn’t that difficult. More →

  • 24 Jul
    It’s Feeling A Lot Like 2007 – Are You Prepared For The Next Crash?

    It’s Feeling A Lot Like 2007 – Are You Prepared For The Next Crash?

    • There’s nothing to worry about. Everything looks exactly the same as it did in July 2007 when no one was worried because the S&P 500 was breaking new highs.
    • Even the statements from the FED’s 2007 chair and the chair of it today look alike.
    • This doesn’t mean there will be a crisis in 2018, but it sure means you have to be prepared for anything.

    Introduction

    Last week I published an article describing how strong the trend is that is pushing the S&P 500 higher. There is plenty of liquidity, corporations are doing big buybacks, and most investors are putting their money into passively managed investment vehicles. More →

  • 17 Jul
    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    • Productivity growth is the long-term key, make sure your portfolio follows it.
    • The global distribution of wealth is shifting very quickly.
    • Preparing your portfolio for what’s going to happen doesn’t even cost that much. On the contrary, it is even more profitable.

    Introduction

    Ray Dalio is famous for many things. One of them is his explanation of how the economic machine works where he describes how productivity growth, the long-term debt cycle, and the short-term debt cycle affect an economy.

    Today, I’ll briefly summarize his findings as they are reported in a 300-page document and, most importantly, see how Dalio’s economic philosophy can affect our investing strategies. More →

  • 16 Jun
    Back From The Future – An Article From June 16, 2020

    Back From The Future – An Article From June 16, 2020

    • Central banks didn’t manage to tighten at all up to 2020 and this led to high inflation and economic stagnation.
    • Developed countries’ currencies significantly depreciated while emerging markets gained in strength due to their high productivity levels.
    • In 2020, financial markets became rational again as eventually, fundamentals have to come first.

    Introduction

    I somehow managed to go to the future to the 16th of June 2020. However, I was only there for a few seconds and only managed to check on Investiv Daily.

    I found an article that explains with perfect 20/20 hindsight what has happened in this decade and how everybody was blind to what was going on. I’ve copied the article here in order to give you a look at how the next few years will play out. More →

  • 15 Jun
    Is Zinc Still A Good Investment?

    Is Zinc Still A Good Investment?

    • Zinc is up 20% in the last 12 months.
    • Global zinc inventories and supply deficits might make zinc not just a good investment, but a great investment.
    • The problem is that it’s very difficult to find pure zinc plays.

    Introduction

    Exactly a year ago, I wrote about how between mine closures with limited mine openings and increasing demand, a supply gap in the zinc market was about to be created (article available here). Since then, zinc prices are up about 20% and were up 46% for a moment in November 2016. More →

  • 15 Mar
    There’s Only One Reason The Markets Are Rising & Nothing Can Be Done About It

    There’s Only One Reason The Markets Are Rising & Nothing Can Be Done About It

    • Everybody knows the market is extremely overvalued and risky, but nobody cares as long as it goes up.
    • Funds keep flowing into U.S. equities despite the fundamentals. This will be very painful when the trend reverses.

    Introduction

    We all know that in the long run, our investment returns are perfectly correlated to the underlying performance of the businesses we own in relation to the price we pay for ownership. If the price is high, our returns will be weak. If what we buy is cheap in relation to underlying earnings, our returns will be great or even amazing. This is a universal truth. However, there are some issues with it.

    The first is that even if most agree on the strong correlation between earnings and stock returns, very few like to think about the long term and instead prefer to only think about the short term. In the short term, stock returns are driven by equity flows and there is nothing that we can do about it even if it has been statistically proven that long term returns are perfectly correlated to underlying earnings and the greatest investors, like Ray Dalio and Warren Buffett, keep reminding us of this fact. More →

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