201501.25
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The Deflation Threat

There’s been a lot of talk recently about deflation – no I’m not talking about the New England Patriots – so maybe it’s a good time to talk about what it really is and why so many economists seem to be in a tizzy about the possibility. For most of the folks who spend their…

201501.25
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Investment Themes and Research Highlights

The cyclical rebound in global return on equity has further to run in an economic recovery scenario, despite having softened modestly in the past year. Earnings will be a tailwind for stock prices. Global equities are fairly valued relative to corporate profitability. Valuations are not an impediment to further stock price gains, and indeed have…

201501.19
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The Dangers Of Leverage

Leverage: the use of credit to enhance one’s speculative capacity Merriam-Webster Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. Archimedes The Swiss National Bank – the Swiss equivalent of our Federal Reserve – didn’t exactly move the world last week but the fallout…

201501.19
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Currencies

The dollar is very stretched in momentum and sentiment terms and, thus, due for a consolidation or brief correction. This is true for all the major and commodity currencies. However, the key cyclical drivers for exchange rates – relative growth trends and interest rate differentials – should remain dollar-supportive this year. Most likely, after a…

201501.11
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Signs Of Stress

2015 has started with a bang with the Dow trading in a roughly 700 point range through the first six trading days. The increase in volatility started in the 4th quarter and appears to have entered the new year with a new – higher – range. The source of the volatility appears to be angst…

201501.04
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Checking In With Mr. Market

Mr. Market is the fictional business partner Benjamin Graham invented in his classic value investing book, The Intelligent Investor. As Mr. Graham describes him, Mr. Market is the business partner of the investor, offering on a daily basis to buy your share in the business or alternatively to sell you his share. There are times…

201412.21
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Questions For 2015

Well, it’s that time of year again, when all the pundits offer their crystal ball views of the coming new year. I don’t usually participate in the prediction game and this year won’t be any different. Like everyone else I wonder what the future holds but I know I have no special ability to predict…

201412.14
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A Considerable Period

con·sid·er·able 1. Worth consideration; significant 2. Large in extent or degree Merriam-Webster It was six years ago this month that the Federal Reserve cut the Fed Funds rate to its current target range of 0 – 0.25%, essentially cutting the interbank lending rate to zero. The upper end of that range hasn’t been a problem,…

201412.07
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A Closer Look: Commodities

The GSCI Commodity Index ((GSG)) consists primarily of Energy, but also includes Agriculture, Industrial Metals, Livestock, and Precious Metals as part of its holdings. The index broke down during the month of July on the back of a stronger US Dollar. It failed a critical test once it broke through the 200-day moving average, and…