TECH FIRMS ACCOUNT FOR 60% OF PROFIT MARGIN GROWTH IN THE PAST 20 YEARS — SOURCE: 08-19-18 – “Tech Firms Account For 60% Of Profit Margin Growth In The Past 20 Years” — It’s official: with the best earnings season since 2010 now essentially over, the numbers are in and S&P500 profit margins are at […]
MM Fundamentals
CORPORATE PROFITS WILL SOON COME UNDER DOWNWARD PRESSURE
CORPORATE PROFITS WILL SOON COME UNDER DOWNWARD PRESSURE — SOURCE: 09-11-18 CME Group, Bluford Putnam & Erik Norland – “The Next Recession: 3 Critical Warning Signs” — Corporate profits are soon likely to come under downward pressure. Falling corporate profits do not necessarily doom the equity bull market, at least in the short run. The […]
TOBIN’S Q-RATIO AT THE SECOND HIGHEST IN HISTORY
TOBIN’S Q-RATIO AT THE SECOND HIGHEST IN HISTORY There’s an important market metric that’s signaling huge downside ahead. I’m talking about the Tobin Ratio – otherwise known as the ‘Q-Ratio’. . . Created by Nobel Laureate James Tobin, the Q-Ratio is a method for investors to gauge the fair value of all firms relative to their combined […]
IT IS TOUGH TO MANIPULATE PRICE-to-SALES & IT IS WORSE THAN PRIOR TO THE DOTCOM BUBBLE IMPLOSION
IT IS TOUGH TO MANIPULATE PRICE-to-SALES & IT IS WORSE THAN PRIOR TO THE DOTCOM BUBBLE IMPLOSION By one measure, the stock market’s valuation is twice as high as 2000 — SOURCE: 08-09-18 MarketWatch.com, Sue Chang – “If This Chart Doesn’t Scare You Out Of Stocks, Nothing Will” — A lot has changed since the […]
INVESTORS’ NEGATIVE FREE CASH BALANCES AT HIGHEST IN MARKET HISTORY
INVESTORS’ NEGATIVE FREE CASH BALANCES AT HIGHEST IN MARKET HISTORY Leverage “There are two other problems currently being dismissed to support the ‘bullish bias.’ The first, is that while investors have been chasing returns in the ‘can’t lose’ market, they have also been piling on leverage in order to increase their return. Negative free cash balances are now […]
INVESTORS SINCE 2014 HAVE BEEN PAYING TWICE THE RATE OF EARNINGS GROWTH
INVESTORS SINCE 2014 HAVE BEEN PAYING TWICE THE RATE OF EARNINGS GROWTH Always Optimistic “Since the end of 2014, investors are paying twice the rate of earnings growth.” “No matter how you look at the data, the point remains the same. Investors are currently overpaying today for a stream of future sales and/or earnings which […]
BoAML: 40% OF THE LAST 20 YEARS OF MARGIN EXPANSION WAS FROM GLOBALIZATION
BoAML: 40% OF THE LAST 20 YEARS OF MARGIN EXPANSION WAS FROM GLOBALIZATION — SOURCE: 06-21-18 ZeroHedge – “BofA: 40% Of Margin Expansion In The Last 20 Years Is From Globalization” — Roughly around the time David Rosenberg “calculated” the contribution of the Fed’s unprecedented monetary policy on the S&P (which he estimated at roughly […]
EARNINGS ESTIMATES – THE FADE BEGINS
EARNINGS ESTIMATES – THE FADE BEGINS — SOURCE: 06-21-18 RealInvestmentAdvice.com, Lance Roberts – “Earnings Estimates – The Fade Begins (And ‘X’ Marks The Accounting Magic Spot)” — With roughly 98% of the S&P 500 having reported earnings, as of mid-June, we can take a closer look at the results through the 1st quarter of the year. During […]
MYSTERIOUSLY FINANCIALIZED (OR NOT?)
MYSTERIOUSLY FINANCIALIZED (OR NOT?) — SOURCE: 06-08-18 Alhambra, Jeff Snider – “Mysteriously Financialized (Or Not)”– The Federal Reserve published its latest update for Z1, the Financial Accounts of the United States (formerly Flow of Funds). That means we can update our valuation metrics for a good piece of the US stock market. Tobin’s Q starts with the premise […]
FAANG BUBBLE STATISTICS
FAANG BUBBLE STATISTICS — SOURCE: 06-08-18 EconMatters – “FAANG Bubble Statistics” — Everyone has piled into the same trade for long enough that we have an acronym for this herd mentality in FANG, then expanded to FAANG, and other derivatives to include hot stocks like Microsoft and Nvidia. The lack of imagination on behalf of […]