A readily available metric to differentiate between profit-generating and profit-burning companies is the return on equity (“ROE”). ROE denotes the amount of income generated before non-recurring items as a percentage of shareholders’ equity. In other words, ROE measures the amount of profit a company produces with its shareholders’ money. Quite naturally, a company with a…
Normally we look at macroeconomic news to provide the incremental additional information that shapes the expected returns on investments. However, in the week ahead, the macroeconomic data is of less importance than the reaction function of policymakers. What we mean by this is how policymakers will respond to the recent data may be a bigger driver of financial…
Markets started the week with more of the negative sentiment we’ve grown accustomed to in recent weeks. In Japan and Europe, notably, this later took a turn on market participants attributing a larger likelihood for more QE(s) taking place soon. On Tuesday, the JPY weakened substantially amid comments made by Etsuro Honda, one of…
Russia began bombing CIA trained rebels in Syria precisely on the day of the turn in the Economic Confidence Model. This bombing has continued as CNN pointed out. Now, hundreds of Iranian troops have arrived in Syria to also join a major ground offensive in support of President Bashar al-Assad’s government. Clearly, the civil war in Syria is now…
Like a good ghost story, fear of deflation is used as a bogey-man to scare the unwary that the hoof beats of four riders of the economic apocalypse can be heard in the distance and that great calamity will shortly be upon us. As fears go, deflation in the Eurozone is greatly overdone, in my…
The start of every month is exciting for all dividend income investors as we look back at the previous month and see how much passive dividend income our portfolios generated. September was exciting as ever as my year over year numbers continue to highlight the trifecta magic of dividend investing which includes, adding fresh capital,…
Thanks to a variety of idiosyncratic political crises and country-specific stumbling blocks, Brazil, Turkey, Malaysia, and to a lesser extent Russia, have received the lion’s share of coverage when it comes to assessing the EM damage wrought by the comically bad combination of slumping commodities prices, depressed Chinese demand, slowing global trade, and a “surprise”…
The drop in oil prices is now a continuing story. After roiling the equity market for over a year, the series of drops in multi-year low crude price is now forcing major energy players to think and rethink their production plan just to survive an unfavorable business scenario. Even defensive measures haven’t helped, as these…
It might sound somewhat defeatist, but in a year like 2015, I’m just happy that my entry in the Best Stocks contest is almost in the black. It’s not that I don’t expect Prospect Capital (PSEC) to deliver solid returns. In fact, I expect it to deliver returns of 50% or more over the next 12 months. It’s just that 2015 has…
“The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.” John Kenneth Galbraith, The Great Crash of 1929 Here are a few charts that show the rather striking decline in ‘registered’ gold, that is gold available for those standing for delivery, in the Comex…
