Economic Analysis

Economic Reforms Sacrificed For Political Gains

Outside the Box

April 18, 2005

This week we will turn once again to a group headquartered in Hong Kong with offices in Stockholm and New York called GaveKal Research Limited. Louis- Vincent Gave's GaveKal Ad Hoc Comments for Friday, April 8, 2005 looks at the political and economic climate in Europe and what that might mean for the Euro and European government bonds.

The European Union, now with a few years behind it, is looking to make some changes and as we have seen throughout history, what is good politically is not...

Forecast: The Next Ten Years

Thoughts from the Frontline

April 16, 2005

This week we look at how politics and geopolitical events can affect our investments. We look at a decade-long forecast from one of my favorite information services: I change my view on the euro, talk about a possible Chinese recession and look at uncomfortable analogies between 1900 and today. There's a lot of ground to cover so we will jump right in.

I have had the relative value of currencies on my mind every day for the past two weeks. I have been in London, where the...

Don’t Discount Discounted Dividends

Outside the Box

April 11, 2005

This week's letter is from John P. Hussman, Ph.D., President of Hussman Investment Trust. His firm is one of the few that has employed hedging techniques, similar to the hedge fund world, in a mutual fund structure. John is also one of the really, really, really smart guys in the running money business. John manages the Hussman Strategic Total Return Fund - HSTRX and the Hussman Strategic Growth Fund - HSGFX.

Hussman's Weekly Market Commentary on March 21, 2004 takes a look at the importance of...

Unexpected Returns

Thoughts from the Frontline

April 8, 2005

Writing on the train to Yorkshire from London, I am surrounded by a gorgeous English countryside on a beautiful spring day. Life has its moments. I like the trains in Europe. Quite a civilized way to travel. Yet every time I pull out my wallet, I am reminded of reality. The ebb and flow of the dollar has made this a most expensive country for someone from the states. Nearly everything is the same price, just in pounds instead of dollars. And a pound that is worth more than two of my...

An Asset Allocation Strategy For The Intelligent Investor

Outside the Box

April 4, 2005

This week's report is about some research finding from a group in Bellevue, Washington called Evergreen Capital Management, LLC. They have built a proprietary model that is used to predict when mutual fund styles (large-mid-small capitalization, value-growth) are being overbought or oversold. They believe that their model is quite good at predicting returns relative to the overall market over the subsequent two years.

This report does an excellent job of weaving together many of the themes from...

$100 Oil is the Solution

Thoughts from the Frontline

April 1, 2005

How can we go from oil priced in the low teens only a few years ago to oil now holding steady in the mid-50s? This week we have seen a projected price spike of $105 from Goldman Sachs. Can you say $4 a gallon gasoline, boys and girls? $100 to fill up the tank of your SUV? This week we look at the price of oil and why $100 oil is the solution and not the problem.

Since I'm writing this on April 1, I was tempted to start out the letter as an April Fools joke. My topic would have been why...

Bargain Hunter

Outside the Box

March 28, 2005

Once again we look at one of my favorite analysts and behavioral finance thinker, James Montier of Dresdner Kleinwort Wasserstein in London. James wrote a fascinating book two years ago called "Behavioural Finance: A User's Guide" and puts out ongoing research like the one we will enjoy today. Long time readers will recognize the name because I have discussed many of his ideas in my weekly letter "Thoughts From the Frontline," my book "Bull's Eye Investing" and in "Outside the Box."

This report...

Of Bonds & Zombies

Outside the Box

March 21, 2005

This week's research comes once again from the GaveKal Ad Hoc Comment publication, however this piece was done by Anatole Kaletsky, a different analyst than the previous reports we have highlighted. This group is located in Hong Kong and I always find their comments on Asia very insightful.

The report takes a look at some of the structural players in the U.S. bond market and why their actions may be causing the longer term bond rates to stay low. The largest catalyst surprisingly is Japanese...

The New Retirement Model

Thoughts from the Frontline

March 18, 2005

It seems like every week I get a letter from a reader asking questions along the following line: "How can I make a lot of money so I can retire early and/or live the lifestyle I want to live when I do retire?" Most of them are phrased far more eloquently and with accompanying questions and comments, but the bottom line is, "How can I get rich?"

I'm especially touched by the very sincere letters from young people who ask this most basic of questions about accumulating wealth. They are...

Making the Bull’s Case and the Bear’s Case

Outside the Box

March 14, 2005

This week's analysis comes to us from Steve Leuthold of The Leuthold Group. They are located in Minneapolis and put out lots of financial analysis including the monthly Perception for the Professional.

In the publication is Steve's monthly commentary called "View from the North Country" and this month's topic takes a look at the bull and bear arguments for the markets. Bullet points of some of the top arguments for a bull and a bear market are presented followed by Steve's viewpoint on the...