A simple summary on recent Equity Valuations
The USA, as well as the world, equity markets are at very important crossroads. They are heavily dependent on volatile inflation, interest rate and on earnings prospects. Geopolitical factors and Economic data heavily contribute to the instability of markets. On the Geopolitical front the war in Ukraine and the ‘zero Covid policy’ of China affect the […]
Markets in view of Q4 2022 : Can investors endure more losses? Will they be rewarded?
Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? Can investors endure more losses ? Will they be rewarded ? ‘It gets very dark before dawn’ A number of issues at […]
How can this Bear market end ? A summary
The FED missed the inflationary situation calling it for a long time a transient phenomenon. It was a structural one. The war in Ukraine exacerbated the supply shocks in agricultural products and energy. With its very delayed reaction, the FED is attempting to use Demand policies to solve mainly supply shock problems . The continuous abrupt interest rate increases, after […]
The curse of the screen / Financial assets vs real estate / A simple example with rising interest rates
Financial assets have some great advantages like the ability to diversify and the possibility to engage in partial sales to finance desired expenses. No doubt, Liquidity is a great blessing. However, they also have a great disadvantage . They create nervousness as a result of their ability to provide continuous valuation. Investors sometimes panic by marking […]
FED resolution to fight inflation: The short and medium term
A)The expectation of FED chairman Powell speech at Jackson Hole was that it would provide a determination to fight Inflation at the expense of employment and growth. B) The reaction to the speech was obviously a short term disappointment. The market participants interpreted that the FED is more hawkish than anticipated. As the trading day […]
Perfect storm and patience
Perfect storm The FED made a major mistake underestimating inflation. Interest rates should have increased earlier. Now it is tightening aggressively. We experience the worst inflation in 40 years. Covid resurfaced in China. It is the worst pandemic in 100 years In addition, have a war in Europe after 75years. A painful coincidence! Have markets […]
Inflation and the Supply curve
Inflation and the Supply curve A few thoughts on the markets : Negatives : A) Waited to comment on the April inflation numbers. Higher at 8.3 pct for the CPI than the forecasts at 8.1 pct. Core inflation also 0.2 pct higher. Inflation appears persistent and markets are disappointed. B)Markets fear that persistent inflation will probably necessitate more interest rate […]
Inflation, interest rates & the Equity risk premium: A critical evaluation of the consesus views.
The first quarter of 2022 reinforced the view that a diversified portfolio should strategically include most asset classes and can prove beneficial during hard times. Cash and gold justified during this period their presence in portfolios despite not providing any yields ! Evidently, as always the portfolio asset allocation is instrumental.
Inflation, interest rates and the Equity risk premium : A critical evaluation of the consensus views.
A critical evaluation of the consensus views. The first quarter of 2022 reinforced the view that a diversified portfolio should strategically include most asset classes and can prove beneficial during hard times. Cash and gold justified during this period their presence in portfolios despite not providing any yields ! Evidently, as always the portfolio asset […]