2020 is the “Anti-1980” or as Seinfeld might say, the “Bizarro-1980.”
Baby Boomers and the Silent Generation enjoyed a wonderful investing era as they were hitting their career stride, and investing the bulk of their retirement savings, throughout the 1980s and 1990s. Contrast that to Millennials who may be hitting their stride now and starting to put decent money away. It’s really a stark contrast in the market environment between the two eras.
Below is a quick graphic comparing stock market valuations and total debt load within the U.S. economy between 1980 and 2020. The differences are obvious and significant. I’ll summarize below the graphic.
Continue reading “2020 is the “Anti-1980””
If I would have told you a year ago that for the next 12 months long-term Treasuries would be up over 34%, gold would be up almost 27% and the global stock market would be up about 4.5% would you have believed me?
Yet, here we are…
This morning at about 9 AM central, in response to the Coronavirus, the Federal Reserve announced an emergency 0.50% rate cut.
The initial response by the market was to send stocks and gold soaring. As the day wore on U.S. stocks crumbled losing about 3.5% at one point and ending the day down 2.8% while gold hung on for a 3%+ gain.
The 10-year Treasury yield continued to slide throughout the day (sending bond prices up) and even got below 1% for the first time ever! Think about that…in the almost-250 years of this great Republic we’ve just set a record low on bond yields. Continue reading “Fed Enacts Emergency Rate Cut. New Record Lows on Treasuries”
Executive Summary: Warren Buffett is holding records amount of cash. Meanwhile, households are holding near record LOW levels of cash and near record high levels of stocks.
Last week we learned Warren Buffett’s Berkshire Hathaway set another new record for the amount of cash and short-term investments (e.g. U.S. Treasurys) its holding. Specifically, Berkshire is holding over $128 BILLION of cash and short-term instruments. That’s a lot of dry powder!
The reason he’s holding so much cash is because he hasn’t been able to find attractively-valued investment opportunities. So, like any disciplined investor, he’s not chasing obscene valuations. Successful investors don’t get caught up in the emotions of manias and bubbles. Successful investors also don’t let fear prevent them from buying good assets when they’re priced right much like Mr. Buffett was doing in early-2009 when everyone else thought the world was ending.
Last week, I also happened to come across some charts from @SentimentTrader (Twitter) showing how households are currently invested. There is some really interesting data here that presents a stark contrast to Mr. Buffett’s approach right now. Before we continue, remember Mr. Buffett’s wise words, “Be fearful when others are greedy and greedy only when others are fearful.”
Continue reading “Warren Buffett versus U.S. Households… In Charts”
A couple weeks ago that I was interviewed for a local podcast, which focuses on local business owners and professional leaders. The podcast is now live!
Please forgive the first three minutes’ audio quality and informality. Quality improves at about 3:20. In the first few minutes we were just casually shooting the breeze as audio was getting set up, but then my gracious hosts decided to keep it in the podcast because it was interesting background.
Topics covered include risks facing nearly-/recently-retired folks and how those risks can be addressed, independent advisors vs. commissioned brokers, fees, active vs. passive, types of bonds to consider, stocks vs. bonds, potential returns over next 10 years, bitcoin, Tesla, Apple, steps you can take right now, when should someone hire a professional advisor, how to determine your investment strategy, etc…
There is some great stuff in here. I hope you find it interesting and helpful and share!
Thanks again to Variant Productions for the time and opportunity!