We've previously written an article describing how to identify an overvalued stock market, which covered the yield curve, S&P 500 P/E ratio, S&P 500 dividend yield, CAPE Ratio, Buffett Indicator, and other indicators. But none of these indicators proved more powerful at predicting long-term equity returns than the...
Many investors today are drawing parallels between the current AI investment cycle and the Dot-Com bubble of the late 1990s/early 2000s. Technology stocks now comprise over 50% of the S&P 500. Major tech companies are also committing hundreds of billions to AI infrastructure despite evidence suggesting AI initiatives...
In The General Theory of Portfolio Construction (2024), Charles Gave presents an investment framework he developed in 1978 after watching Nixon break the gold standard and financial markets descend into chaos. Now 81, Gave has refined his four quadrants model through five decades of market cycles, offering an...
When you see an investor beat the market for 15 consecutive years, or maintain outperformance over several decades, what's your first thought? Lucky? Skilled? Just a random outcome? Many investors, even professional fund managers, view beating the S&P 500 over the long term like coin flipping. They assume...
$5 trillion was wiped out in the U.S. markets in the two days following Trump's "Liberation Day" tariffs. Howard Marks, co-founder and co-chairman of Oaktree Capital Management (the world’s largest distressed debt investor), recently described the situation as “the biggest change in the environment that I’ve probably seen...
This article will explain how investors can use various ratios, yields, indicators, and an understanding of the current state of the market to recognize if the stock market is overvalued, fairly-valued, or undervalued. In short, this process involves looking at the S&P 500 P/E Ratio, the Shiller P/E...
Interest rates represent the cost of borrowing money, expressed as a percentage. While many investors focus on analyzing company financials, they often overlook how interest rate changes affect company performance through key factors like borrowing costs (debt expenses), consumer/business spending, and stock valuations. As an investor, you need...
This article will discuss the importance of the yield curve for investors, what it really means when it flattens and inverts, and what steps investors can take when the yield curve changes shape. The yield curve is a curve that many analysts reference when discussing the economy. In...