Party Like It’s 1999

Run, Bull, Run, was the cover story of Barron’s magazine in January 2000. The story presented arguments for “another record-breaking year for stocks”. Today, we know that it didn’t happen. Instead, the bull was a bubble and burst a few months later.  Tech(no) There are striking similarities between investors’ behavior around the millennium change and today. …

The S&P 500 Caught The Flu

Capitalist market economies have the best track record for growth and prosperity. While the system is not perfect, no other market system performed better throughout history. Moreover, some of the shortcomings of capitalist systems can be mitigated by external intervention. A reliable set of rules and laws is, for example, indispensable. However, there is also …

Speculative Bubble

Equities puzzled investors lately. A market crash led to a v-shaped rally that carried the broad market near all-time highs. It was the sharpest recovery for U.S. equities throughout our entire dataset that spans over 150 years. Moreover, that happened during the most significant economic crisis since the Great Depression. This write-up discusses the reasons …

Dry Powder

Fundamentals Financial markets have been extraordinarily challenging lately. Most investors were equally surprised by the market crash as well as the subsequent rebound. Long-term valuations and the business cycle remain a strong headwind for equities. Not even a single stock market correction that accompanied contracting business cycles finished within four weeks during the past 150 …

Free Money

This article discusses evidence for the causes of hyperinflations and defaults. We put the current U.S. debt situation in a historical context and assesses the probability of a significant shock to the financial system. A default or hyperinflation is very unlikely short-term and 10-year Treasury rates probably drift lower during the next months. Subsequently, the …