The average annual equity return for individual investors has been 60-65% less ( 6-7 percentage points less), over a twenty year period, than the performance of the indices that everyone assumes reflect investor returns! In spite of such a dramatic under-performance that fact is being ignored because it is not useful to academics or investment companies - but I would think it is of interest to YOU! Words: 729
Read More »Monthly Archives: October 2011
There Are 2 Ways Out of Global Economic Mess – Hope for One of Them & Prepare for the Other
It all comes down to this: We have to match growth to debt. If we can't create miracles from growth, we have to consider inflation to reduce the value of our debt. [Those are the] only two ways out of our current global economic mess - innovation and inflation. As the saying goes, we should hope for the best (more innovation) and prepare for the worst (higher inflation). [Let me explain why that is the case.] Words: 1195
Read More »"Gold is Useless!" and 6 Other Reasons To Hate Gold As An Investment (+3K Views)
Over the past few years, pretty much every investor has become familiar with gold. The shiny precious metal has surged in price and has managed to hold strong while broad indexes have slipped, highlighting its appeal as a diversification agent and safe haven investment. This has prompted many investors to ramp up their allocations to the space in order to take advantage of these favorable trends and lead their portfolios to broad gains...[but] there are a number of other issues that investors need to be aware of when considering allocating capital to the space, as there are several reasons to avoid the precious metal from an investment perspective. Below, we highlight seven reasons for why investors may want to temper their expectations for the metal and consider a more diversified approach that doesn’t include such a large allocation to the ‘barbaric relic’. Words: 2030
Read More »Wise Words of Advice for Today’s Economists from a Veteran Observer (+2K Views)
[Below is] a list of my favorite 25 rules for analyzing the economy. There are probably many more than this and many that have yet to be discovered, but this list has served me well over the past quarter century and hopefully will be of use to others. Words: 1849
Read More »Never Have SO Few Owned SO Much – Where Do You Place in the Wealth Hierarchy? (+2K Views)
[The fact that] the top 1% has prospered incredibly while the bottom 99% have been screwed royally is supported by countless data. New data show this is a global phenomenon and that even in the worst of economic times the wealthiest make out like the bandits they are, and there are a lot more of them than 1%. [Let's take a look at what the data actually says.] Words: 781
Read More »The Big Mac Index: Is Your Country's Currency Over or Under-Valued Compared to USD?
The Economist’s Big Mac index is a fun guide to whether currencies are at their “correct” level. It is based on the theory of pWords:urchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of a basket of goods and services around the world. [As such, take a look at the chart below to see just how expensive a Big Mac is in your country (raw and adjusted for GDP per person) and therefore, by inference, the extent to which your country's currency is over- or under-valued compared to the U.S. dollar.] Words: 421
Read More »Commodities, Including Gold & Silver, Historically Perform Well (on Average) in November (+2K Views)
Have you been wondering how commodities will fare in November? [Below is a chart of] how select commodities performed in the past 25 Novembers (since 1986). Words: 489
Read More »WSJ Economist Survey Estimates Regarding Future GDP and Probability of Recession Inconsistent! Here's Why
50 economists forecast their estimates for real GDP over the next 6 quarters in a recent Wall Street Journal survey [and their projections, on average, show a modest increase through to the end of 2012 as the table below shows. In addition, they were asked] to forecast... the probability of a recession in the U.S. in the next 12 months] and the results were quite surprising - quite. Let me show you.] Words: 600
Read More »Gold: Are You "The 99%" or "The 1%"? (+2K Views)
34% of Americans say gold is the best long-term investment, but how many of that 34% actually own it in the form of coins and bullion? No one has that figure, but my guess would be less than 1% of the total population, and when global investment demand doubles or triples (or more) from current levels -- a distinct possibility -- and you paint a whole new picture for gold. You begin to understand why gold is not in a bubble at all but, in fact, is in a long-term secular bull market that is still amassing considerable potential energy. Words: 1092
Read More »Gold Price Keeps Going Higher As U.S. Debt Keeps Increasing – Got Gold?
Will our National Debt be trillions higher than today in a few years? If you think the answer is yes, than buying physical gold today is a good idea. It’s that simple. Just look at the chart. Words: 140
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