Financial Sense Blog

Are Stocks Currently Cheap?

Perma-shills have been claiming of late that the stock market is now trading at an enticing valuation. Their main evidence for this, as they are fond to claim, is that the forward Price to earnings multiple is 12 times next year’s earnings for the S&P 500. And, of course, a 12 PE multiple makes stocks cheap and the overall market a buy.

Understanding Robert Prechter's 'Slope of Hope'

Almost everybody who follows financial markets has heard about climbing the "wall of worry": the time when prices head up bullishly, but no one quite believes in the rally, so there's more worry about a fall than a rise.

Shanghai Ready for its Bear Market

China is 2-3 weeks away from being ONE FULL YEAR into it's most recent bear market leg. Amazingly, despite the old retrospectoscope pointing out that the Shanghai Stock Exchange Composite Index ($SSEC) peaked on August 4th of 2009, people are still looking to the "miracle growth story" of China to lead the world out of its slump. This goes to show how long the average investor can be deceived into thinking a burst bubble can re-inflate. It is the same scenario as people wanting to believe the housing market was coming back last year. Or this year. Or next year. Ain't gonna happen, folks, so move along.

Part III - Interviewing Past Presidents

Some very good tax advice from a past President

Having completed an interview with a past President, Dwight D Eisenhower, I had asked about taxes and paying down the debt of WW II. He guided me to President Kennedy and his advice about taxes. Regardless of your feelings about any of the Presidents I chose to interview, some that I disagreed with on several issues, also demonstrated wisdom in some things and tax advice from President Kennedy is something I can see wisdom in.

Gold & Fiat Money

By Sarel Oberholster

The economic relationships between gold, fiat money, inflations, interest rates and central bank activity are evaluated with a generous supply of charts. The visual feast starts in 1971 binding gold and fiat money together in a battle for dominance where Official Gold Reserves are not off limits in achieving the objectives of the managers of fiat money.

Gold: Rushing the Line!

I termed July 1st 2010 “Black Thursday”. Tuesday, July 6th was another black day. Those two days were marked by massive selling across the board, in both the gold and fund communities. I wa

Has the Gulf Spill Opened Pandora’s Box for Obama?

The White House might be gaping in shock that the U.S. federal court overturned the six-month drilling moratorium, but it really isn’t all that surprising. Amid the finger pointing and political posturing, the Obama administration seems to have missed a vital detail – the U.S. oil industry is in a spot of bother.

Secular Cycles in the U.S. Stock Market

The following chart shows the inflation adjusted S&P Composite from 1871 through June, 2010. We highlight three secular bear markets and a fourth that may be forming. The rose colored arrows and months listed are the amount of time it took for the market to get back to its former high.

Weak Loan Demand and the Economy

You have heard that loan growth is one of the critical elements of economic growth. The last recession saw total outstanding loans plummet as banks tightened up their credit standards and credit demand fell. So far, business loans remain weak indicating business of all sizes are not looking for more credit.

Inflation: The Runaway Train

Inflationary risks have seemingly fallen out of the mindset of many investors recently, with the European debt crisis causing many to reevaluate their outlook for global economic growth in concert with record low headline CPI numbers being released.

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