The 2022 bear market will be remembered as a year when collapsing growth stock valuations and rising interest rates doomed almost every asset class to return purgatory. Hopes for avoiding a second down year rest with a potential top in interest rates and solid earnings underpinning the stock market. Wall Street strategists have a year-end…...
What does “back to the new future” mean? The era of quantitative easing and a quick trigger Fed easing policy stance are effectively over. Inflation comes back down to earth exhibiting characteristics more from the 1990s than the 1970s. Corporate fundamentals and valuation matter again with investors looking for earnings stability at a reasonable price.…...
By Dr. James M. Dahle, WCI Founder It’s a funny quirk of human nature that we learn more from bad experiences and examples than we do from good ones. Today, let’s talk about 35 signs that you are not a very good investor. How to Know You Are Terrible at Investing If you recognize yourself in…
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Approaching the end of the year, it is natural to wonder: What lies ahead? Where does this road lead? Often, navigating markets is a test for how much ambiguity we can handle. How many conflicting pieces of data can we hold in our minds without giving in to confusion or worse nihilism. There is little…...
This week’s focus is likely to be centered on CPI and the Fed. To us, that is yesterday’s news; while it’s important for the next week / year-end trading ranges, the final chapter to this bear market is all about the path of earnings estimates, which are far too high, in our view. Inflation data…...
Key takeaways • Consumers have proven resilient in 2022. While they are likely to have a tougher time next year, especially if the labor market deteriorates, they are starting 2023 in decent financial shape. Deposit balances are coming down, but slowly, and credit card usage does not currently look out of line with pre-pandemic levels. …
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The Federal Reserve has not yet begun easing, but “Easing” is a multi-dimensional event, and increasingly, the outlines of a new cycle (often associated with the beginning of a bull market) are coming into focus. It’s only in its infancy, still far from firing on all cylinders, and it could yet be aborted. Nonetheless, while…...
In The Illusion of Knowledge (September 2022), I railed against macro forecasting, which in our profession mostly concerns the next year or two. And in I Beg to Differ (July 2022), I discussed the questions I was asked most frequently at Oaktree’s June 21 conference in London: How bad will inflation get? How much will the Fed raise interest…...
