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Small-Cap Value Outperforms Large-Cap Value Over the Past 20 years

Young investors are taking on personal debt to invest in stocks. I have not personally witnessed such a thing since late 1999. At that time, “day traders” tapped credit cards and home equity loans to leverage their investment portfolios.

Did the Fed’s “monetary policy experiment” fail? The recent dislocation between consumer confidence and the financial markets may indicate just that.

The question I get most often is, “when is the next bear market?” Three specific items tend to predict bear markets and recessions with some accuracy.

The question I get most often is, “when is the next bear market?” Three specific items tend to predict bear markets and recessions with some accuracy.

In this past weekend’s newsletter, I discussed the issue of the markets next “Minsky Moment.” Today, I want to expand on that analysis to discuss how the Fed’s drive to create “stability” eventually creates “instability.”

In this past weekend’s newsletter, I discussed the issue of the markets next “Minsky Moment.” Today, I want to expand on that analysis to discuss how the Fed’s drive to create “stability” eventually creates “instability.”

According to the National Bureau of Economic Research, the contraction lasted just two months, from February 2020 to April 2020. However, during those two months, the economy fell by 31.4% (GDP), and the financial markets plunged by 33%. Both of those declines, as shown in the table below, are within historical norms.