US stocks are in one of the longest bull markets in history. Many are warning of extended market valuations. Two of the most highly regarded valuation measures seem to agree. The chart below shows Dr. Robert Shiller's CAPE ratio has reached levels surpassed only by the dot-com bubble peak in 2000. CAPE Ratio Source: Multpl … Continue reading No Market for Old Men
In April I wrote about the Nigerian stock market. Since May the Nigerian market is up 30%. Over the same period, the global stock market has basically been flat (shown below). Nigerian Stock Market and Global Stock Market represented by NGE and VT, respectively Timing-wise this was lucky-- I didn't predict a two-week turnaround. … Continue reading From Nigeria with Love
Back in September, I wrote about the Greek stock market. I pointed out that widespread pessimism, low expectations, and attractive valuation created an easy hurdle for an upside surprise. Since then Greece has been on fire, up over 35%! But despite an increase in price, the Greek market P/E has actually fallen from 4.7x down … Continue reading Greece on Fire
Judging by the news coming out of West Africa, one might think the region has nothing but pirates and warlords. But a closer look reveals a diamond in the rough, you may know as Nigeria. Maybe you cringe at the thought of investing there, but that's more reason to consider it. Here are some noteworthy … Continue reading Diamond in the Rough
Back in October of last year I wrote nuclear power was a promising source of alternative energy. I also promised to write more on the topic. Last month I shared my thoughts in BCM's latest Investor Letter (A Bright Future), I'll reiterate my thoughts here. The simple fact is we need more energy than we have … Continue reading Going Nuclear
Much ink has been spilled over Greece's financial woes. And if you've followed the headlines, you might think Greek lightning was burning Athens to the ground. While it's true that Greece's finances have been woefully mismanaged (it has the second highest Debt/GDP ratio in the world), in absolute terms things may not be as … Continue reading Greek Lightning Strikes
Seems like everybody hates solar stocks. They're down big, but with reason. Earnings have been dismal and financials have been deteriorating. Prominent names like Solar City and Sun Power are simultaneously burning through cash and piling up debt. Adding insult to injury, two years of capitulating oil prices have softened demand for alternative energy. … Continue reading Looking for Bright Spots
In the previous post, I made the point that US stock market valuation isn't as high as a cursory glance at traditional P/E measures might imply. Adjusted for inflation, valuations actually look more "median" than anything. But I also don't think US market valuations are currently attractive. And some of the arguments I've seen about … Continue reading Picking Cherries
US equity market valuation is puzzling. With the S&P 500 priced at 24x trailing earnings, stocks look expensive and long in the tooth -- the market has persistently traded above average valuation levels since 2013. Meanwhile, economic conditions have been, at best, lackluster over the same period. As earnings and the business cycle inch towards … Continue reading Valuation Conundrum
The first quarter started with a bang but ended with a thud. The US stock market was basically flat and the bond market was modestly up. The widespread global recession rhetoric seems to be quieting. This is particularly true in the US where we have been pointing out economic conditions are not as bad as … Continue reading Fitting the Earnings Shoe
2016 has started off with a bang. The S&P 500 is off more than 7% in January, one of the worst calendar-year starts in history. That has everyone wondering if 2016 will be the year of the next big market crash. Though Reinhart and Rogoff might argue otherwise -- I think this time may actually … Continue reading This Time is Different
Following a choppy third quarter, global markets have made a comeback. Since October 1, the S&P 500 and EAFE have both rebounded over 5%, and emerging markets have bounced by more than 8%. Strangely enough, the same fears that stoked the sell-off also seem to be fueling the rally. Investors who disliked the uncertainty … Continue reading Full Swing Voting
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