The Zombies Among Us: How COVID Has Affected Some Companies
Data shows that companies borrowed around $11 trillion to stay afloat during the time that revenues declined or disappeared. The repayment of this sum, along with the interest it generates, will impact profits and cash flows for years.
Inflation is Coming: Are You Ready? Are You Sure?
For a generation of investors, inflation is something read about in history books but never experienced. This is about to change. The combination of relaxed COVID restrictions, forced savings to be spent, fiscal stimulus, and an inability to match labor with demand are all resulting in higher prices. In this case, “higher prices” means higher […]
How Indexes Mislead: Performance of the S&P 500 Relative to Other Benchmarks
As of last Friday, the Standard & Poors Index, the basis for index funds under the same banner, had recorded a year-to-date appreciation of 11.29 percent. While this is a commendable number, it was attained entirely (and then some) on Price/Earnings multiple expansion. A year ago, the index had an average P/E ratio of 20.34. […]
How Avoiding Risk Can Create Risk: A Primer on False Risk Avoidance
Students of finance become acquainted with what is taught to be the “risk-free rate.” This is the return that can be obtained by investing in securities of the United States Treasury. Usually, the five-or ten-year treasury yield is counted as the benchmark rate, with potential returns taken as some increment of this rate.
GameStopped: Revenge of the Internet on the Hedge Funds
Today, we are witnessing another transition. Through the internet, hundreds of thousands of unversed speculators are being harnessed to focus on a few stocks.
On the Eve of Inauguration: Does the Stock Market Care Who Is President?
The financial press is awash in predictions as to how the stock market will perform under a Biden presidency. Implied in these predictions is a belief that who occupies the Oval Office will impact the stock market. The record of this is more one of coincidence than causality.
After 2020: Ready for 2021? Insights for the New Year
This year will be best recalled as one where the economy went down, and the stock market went up. After suffering a 30 percent contraction in March and April, the GDP came back forcefully in the summer, only to fade out in the closing months of the year.
Waiting for the Calvary to Arrive: What a Vaccine Will and Won’t Do for the Economy
As the Coronavirus continues to stalk the land, killing at last count over 260,000 Americans, word of at least three vaccines have been delivered for FDA approval.
Can the Election Winner Influence the Stock Market? Not in the Way You Think.
Many investors have decided to wait until the election is decided before investing in the stock market. Based on history, there is a two-to-one chance; this is a bad idea.
Party Like It’s 1999: The Return of Day Trading and Its Impact on the Markets
With so many people impaneled at home due to the coronavirus pandemic, and with the introduction of apps on smartphones like Robinhood that permits people to trade their accounts anywhere, a new generation of day trading has come back to the stock market at full force.
