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Barron’s this weekend had an article with the headline “How to Prepare for a ‘Lost Decade’ in stocks.” Some of the key arguments are that the market’s cyclically adjusted price-to-earnings ratio has reached 38—putting it in the 97th percentile going back to 1930. Market concentration is in the 99th percentile. Goldman Sachs predicts annualized equity...Read More
In the last newsletter article, we showed the pricey valuation of Apple. Instead of just picking on Tech, I thought it might be helpful to look at a few old-fashioned retailers, as the bubble is pretty widespread. Walmart trades at 38x earnings. Costco trades at 56x earnings. To put some context into this, if Costco...Read More
Stock market bubbles can be intoxicating as the psychological battle between the fear of missing out, versus the logic that stocks are clearly overvalued transpires. Apple (AAPL) is arguably the best-known stock in the United States, so it makes a great example to discuss just how wild current valuations are. Now Apple’s market capitalization is...Read More
“In the short-term, the market is a voting machine. In the long-term, it is a weighing machine.” Benjamin Graham Warren Buffett’s mentor, Benjamin Graham’s quote is particularly applicable in describing today’s market environment. Euphoric optimism has propelled most asset classes to extreme valuations. As a case in point, the inflation adjusted CAPE Price to Earnings...Read More
At TT Capital Management, we employ dynamic investing strategies and financial management to maximize risk-adjusted returns for our clients. To highlight some of these innovative approaches, clients have told me that they find trade examples helpful. Here is a trade we executed recently. EPR is a real estate investment trust that focuses on experiential properties...Read More
The WSJ had an intriguing article about Warren Buffett’s Berkshire Hathaway, and its accumulation of $325B in cash and equivalents (mostly Treasury bills), as a result of selling large portions of several of its biggest stock positions such as Apple and Bank of America. Buffett also failed to repurchase any of Berkshire’s own stock in the...Read More
From all of us at TT Capital Management, we would like to thank the veterans that served our great country so honorably. We appreciate you; we salute you, and we honor you on this day! Sometimes veterans have specific financial advisory needs, so if you know anyone needing help, please don’t hesitate to let them...Read More
Barron’s magazine has a good article this weekend regarding long-term care insurance. As we’ve discussed before, an estimated 70% of people turning 65 will need long-term care insurance. This could be basic help with daily tasks, or it could be full-service nursing care. Most of that 70% will rely on unpaid family members, or Medicaid,...Read More
First of all, for anyone that was impacted by Hurricane Helen, or that is in the path of Milton, we are praying for you. If there is anything we can do to help, please let us know. A radio listener recently asked, “if stocks are in a bubble” why would I want to be in...Read More
It’s only October 3rd, but the month is already off to an ugly start. The hurricane and flooding which ravaged the Southeast has caused immense suffering and damage. Our prayers and thoughts go to anyone that was impacted by those horrendous conditions. In truly terrible timing, a major Port strike impacting much of the East...Read More
Today the Federal Reserve lowered the federal funds rate by 50 basis points. This was more aggressive than many economists prognosticated. Under the hood, the economy seems to be weakening quite a bit, and the Federal Reserve felt that they were behind the curve on cutting rates. The last two times that the Fed’s first-rate...Read More
I’ve gotten a lot of questions about how Nvidia’s stock price could have dropped after reporting earnings that beat estimates. Over the short-term, stock prices move based on market psychology and emotions, and few stocks generate the emotional response Nvidia. The company has reported some of the most dramatic earnings beats that I’ve ever see...Read More
Due to the rapid ascension of interest rates over the past two years, commercial real estate has seen a considerable decline in prices. Different sectors of the commercial real estate market such as Office, are clearly more troubled. However, areas such as multifamily, industrial, and retail are performing much better at an underlying business level. ...Read More
Inflationary data continues to run much hotter than the Federal Reserve has expected. This inflationary pressure is delaying, if not outright halting the Fed’s plans to reduce interest rates this year. This is a very negative development given financial markets, had been rallying since October in the hopes of a rate -cutting cycle. We always...Read More
Last Saturday was the Berkshire Hathaway annual shareholder meeting and there was an interesting quote from Warren Buffett, after selling a chunk of his Apple stock. “I don’t mind at all, given current conditions, building our cash position. When I look at the equity markets and the composition of what’s going on in the world,...Read More
