Connecting the Dots - Older Archives

Live by the Consumer, Die by the Consumer

August 30, 2016

This week’s article is a follow-up to last week’s article (which generated a lot of attention) about stressed-out, tapped-out American consumers.

The Stressed-Out, Tapped-Out American Consumer

August 23, 2016

Retail sales are a pretty good proxy for consumer spending, so to me, any nationwide drop in retail sales is a warning flag about our consumption-based economy.

Bargain Hunter Paradise: Natural Resources and Commodities

August 16, 2016

What kind of investor are you? Are you the buy-high-sell-higher (trend continuation) type? Or are you a bargain hunter who is attracted to beaten-down (trend reversal) opportunities?

Dividends and Prosperity

August 9, 2016

“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”
—John D. Rockefeller

All Fun and Games Until Someone Loses an Eye

August 2, 2016

All Fun and Games Until Somebody Loses an Eye is a 2005 novel by Scottish author Christopher Brookmyre. It perfectly describes some of the dangerous toys I played with as a young boy in western Washington.

Putting Lipstick on a Pig, IBM Style

July 26, 2016

Judging from the large amount of positive feedback on my June 21, 2016 column, An Anatomy of a Successful Short Sale, many of you find it as useful to spot failing companies as to uncover hidden gems.

A Thrifty Opportunity for Investors

July 19, 2016

We are entering the heart of earnings season, and it may be a wild one because Wall Street’s own outlook is quite poor.

Déjà Vu All Over Again: Real Estate Bubble 2.0

July 12, 2016

Like many farmers, my father was land rich but cash poor, so he never saved any money for his retirement.

Turning Lemons into Lemonade as 30-Year T-Bond Yield Falls to All-Time Low

July 5, 2016

“I certainly see low bond yields, and I see an environment [where] that’s likely to continue into the future.”
—James Bullard, President, St. Louis Federal Reserve

The Great Income Shortage… and How to Survive It

June 28, 2016

At the Strategic Investment Conference in May, I was part of the Mauldin Economics Editors’ Panel, and a lot of people were very bullish on bonds. Moderator Mark Yusko asked me why I suggest substituting high-dividend-paying stocks for bonds.

Anatomy of a Successful Short Sale

June 21, 2016

I get a lot of questions about short selling, probably because most investors have never done it.

The Trillion-Dollar Investment Opportunity

June 14, 2016

“A trillion here, a trillion there, and pretty soon you’re talking about real money.”
—Daniel Hannan, British politician, journalist, and EU Parliament member

The Best Money-Making Idea from the Mauldin Strategic Investment Conference: Hide!

June 7, 2016

I don’t attend a lot of conferences. I’m too busy, and I find most of them to be a little on the boring side. The exception is John Mauldin’s Strategic Investment Conference (SIC), the most interesting, educational, and money-making conference in the world.

Yohei Sagami and the Price of Freedom

May 31, 2016

Memorial Day is a very nostalgic, solemn day for me.

The Curse of Debt and the Blessing of Being a Lender

May 24, 2016

“Large fortunes are all founded either on the occupation of land, or lending, or the taxation of labor.”
—John Ruskin

Welcome to Walmart and the BS 5% Unemployment Rate

May 17, 2016

“The United States of America right now has the strongest, most durable economy in the world.”
—President Obama, 2016 State of the Union

Saving Is Dumb… Say the Central Bankers

May 10, 2016

Get a load of this headline from a German newspaper, which translates into “Extreme Low Interest: Who Saves Is the Fool.”

Economic Switcheroo: from Unbridled Optimism to Deep Pessimism

May 3, 2016

“In the global economy, there are not many bright spots around the world.”
Jim Yong Kim, President, World Bank

The Millstone of Debt and the Dangers of Junk Bonds

April 26, 2016

I have three sons, but only one precious daughter, so I’ve always been very protective of her—especially when she reached the age where boys started to take notice of her—and growled at every boy that came around.

The Bern of Financial Stress

April 19, 2016

My college-aged kids love him. I’m not talking about Stephen Curry or Justin Bieber (although they love them too); I’m talking about Bernie Sanders.

Singapore: Dynamic Growth, Cheap Stocks, and Fat Dividends

April 12, 2016

I have traveled to just about every major country in Asia, and one of the questions I am frequently asked is which one I like the best. That’s a tough question, because every country is wonderful in its own way.

The Uncomfortable Increase in Inflationary Warning Signs

April 5, 2016

“We may well at present be seeing the first stirrings of an increase in the inflation rate.”
—Stanley Fischer, Vice-Chairman, Federal Reserve

Old-Fashioned Investment Values Never Go Out of Style

March 29, 2016

According to my children, I’m old enough to have gone to school with George Washington. More than my gray hair or my AARP membership card, their perception comes from my stubborn attachment to old-fashioned values.

Monetary Madness: The Upside-Down World of Hallucinating Central Bankers

March 15, 2016

How does this sound?

Fatso Tony and the Abuse of Accounting Razzle-Dazzle to Overstate Profits

March 8, 2016

“You’d be handsome if you lost 50 pounds.”

Low Yields, Snake Oil Salesmen, and Dividends

March 1, 2016

Some investors never learn that when it sounds too good to be true… it usually is.

Choppy Seas, Train Wrecks, and Bear Markets

February 23, 2016

“It is worse than in 2008.”
—Nils Andersen, CEO Maersk

“This crisis is worse than a divorce. I’ve lost 50% of my net worth, but I’ve still got my wife.”

Don’t Fall for the Government Fake-Out

February 16, 2016

Washington, DC is pretty proud of the employment numbers it has been pumping out. Most recently, the Labor Department reported that the US unemployment rate dropped to 4.9% in January.

An Undiscovered Cambodian Gold Mine

February 9, 2016

Are you a gold bug? If yes, do I have a gold mine for you.

The Dollar Dog Ate Corporate America’s Homework: 6 Casualties of the Strong US Dollar

February 2, 2016

“At current spot rates, we would expect a significant impact to revenue and profit again in 2016.”
—Martin Schroeter, CFO of IBM

Choppy Seas for Transportation Stocks

January 26, 2016

“Red sky at night, sailor’s delight. Red sky in morning, sailor’s warning.”
—Old sailor’s adage

I’m Not Peddling Fiction—I’m Peddling Safety

January 19, 2016

“Anyone claiming that America’s economy is in decline is peddling fiction.”
—President Obama, 2016 State of the Union address

Investing Lessons from the Farm

January 12, 2016

Top 10 Signs You Were Raised on a Farm

10. Anyone who lives within five miles of your house is a “neighbor.”
9. You have a family picture with a tractor in it.
8. You could drive a tractor before you could drive a car.
7. You worked until the job was done or until dark… whichever came first.
6. You buried a dog and cried like a baby.
5. You know it is impossible to tip a cow.
4. You know that Rocky Mountain oysters DO NOT come from the ocean.
3. You loved...

Cubicle Hell Warning Signs Scream “Recession”

January 5, 2016

Have you ever worked in a mind-numbing cubicle? I did when I was younger, and I hated it.

A Half Dozen 2016 Stock Market Poisons

December 29, 2015

Most of the “adults” on Wall Street are on vacation this week, and trading volume shrivels up to a trickle. That low volume is exactly the environment that the momentum crowd uses to paint the tape green. I call it the financial version of Reindeer Games.

Live Every Day As If It Were a Holiday

December 22, 2015

If you’re a longtime reader, you know that I spend most of the year in Asia. I have lived in Japan, Singapore, Hong Kong, Thailand, and the Philippines.

Getting Rich Instead of Sick in the Stomach from Obamacare

December 15, 2015

$949 a month? Are you serious?

Janet Yellen: The Best Pick Pocket in the USA

December 8, 2015

“Some of the experiences [in Europe] suggest maybe we can use negative interest rates.”
—William Dudley, President of the New York Federal Reserve Bank

Cracks in Earnings Foundation and Bear Market Strategies

December 1, 2015

“Scoreboard, baby.”
—Rick Neuheisel, college football coach

Kiss Christmas and Retail Stocks Goodbye

November 24, 2015

In my article from November 17, I touched on the growing number of retailers that report shrinking traffic and disappointing sales:

The Poisonous Cocktail of Main Street Woes and Federal Reserve Liftoff

November 17, 2015

Wall Street was impressed with the October jobs report that showed the creation of 271,000 new jobs and a decrease in the unemployment rate to 5.0%.

The Peril and Opportunity of China

November 10, 2015

Last week, I wrote about the massive pollution problems in China and the gigantic investment opportunity in the cleanup. However, China is a volatile, dangerous place to invest, and there is a wrong way and a right way to do so.

Dirty Money: The Big Profits of Pollution

November 3, 2015

It started about two hours after I landed. “It” being a persistent, ugly cough that I developed a couple of hours after I landed in Shanghai.

The Government’s Fun with (Inflation) Numbers

October 20, 2015

My normally super-sweet baby sister barked at me like an angry dog when I told her that there simply isn’t any inflation in the US.

How an Earnings Recession Will Kill Your Portfolio

October 13, 2015

“Earnings are the mother’s milk of stocks.”
—Old Wall Street adage

Mrs. Magoo, Deflation, and Commodity Woes

October 6, 2015

Did you read my September 22 issue?

Or my July 14 column?

If you did, you could have avoided the downdraft that has pulled down stocks all across the transportation sector…

Wall Street Carnival Barkers, Cheerleaders, and Fools

September 29, 2015

“I’ve got a message for your friend Jim Cramer. The Fed cannot permanently raise stock prices. And to have him cheerleading for lower rates 24 hours a day is, I think, unsavory.”
—James Bullard, St. Louis Federal Reserve President

Don’t Ignore the Big, Fat Transportation Warning Sign

September 22, 2015

The more the stock market falls, the more hate mail I get… almost like I’m the source of the stock market’s problems. Maybe there is some type of market-timing signal buried in the volume of the hate mail I receive.

The Minimum-Wage Fight, Chinese Factories, and the Rise of Robots

September 15, 2015

I was raised on a small vegetable farm near Tacoma, Washington. My father hired lots of high school kids to work the fields in the summer.

Hate Mail, Crumbling Factories, and Sinking Stocks

September 8, 2015

The bulls are mad at me!

Buy the Dip? Hell No! Sell the Rip Instead

September 1, 2015

Are you worried about the stock market? You should be; at least according to your local Starbucks barista.

The Declining Health of American Factories and the Wall Street Proctologist

August 25, 2015

There are thousands of economic and business statistics that you can look at to gauge the health of the US economy, but at the economic roots of any developed country is the prosperity of its “makers” and “takers.”

Distressed American Workers Expose the Fallacy of Improving Unemployment Numbers

August 18, 2015

“Over the past five years, our businesses have created more than 11 million new jobs. Our economy is growing and creating jobs at the fastest pace since 1999.”
—President Obama

Xiaomi: the Apple iPhone Killer?

August 11, 2015

If you own Apple stock, you better pay attention.

6 Warning Signs That the Economy Is in Trouble

August 4, 2015

On July 14, I wrote about the danger developing in the transportation sector, and things are looking even worse today. Here’s what I mean:

The Wall Street Titanic and You

July 28, 2015

“I would highlight that equity market valuations at this point generally are quite high.”

—Janet Yellen

You Need to Get Your Head Examined If You Own HP or Intel Shares

July 21, 2015

Do any of these names ring a bell? Amiga, Commodore, Wang, Kaypro, Tandy, Gateway, DEC, Packard Bell, and Sperry.

Sinking Ships, Train Wrecks, and Empty Trucks: My Case Against Transportation Stocks

July 14, 2015

You can gnash your teeth over the Greek debt crisis or the Chinese stock meltdown, but one economic sure-thing you should be watching is the collapsing fundamentals of the transportation industry.

The Wall Street Raid on Your Piggy Bank

July 7, 2015

Question: How do you get a $1 million portfolio?
Answer: Give $2 million to a stockbroker.

The Wizard of Oz and the Case for a Later Liftoff

June 30, 2015


It’s a Small, Small Handheld World

June 23, 2015

How many hours a day do your children or grandchildren spend on their smartphones? If they’re anything like mine, the answer is “too many.”

Radishes, Onions, and the Stupidity of Debt

June 16, 2015

My father was fiercely religious, but he only went to church twice a year: Christmas and Easter. It wasn’t that he lacked faith; there was just too much farm work to feed his family of five.

Weak Consumer Spending: The Canary in the Bear Market Coal Mine

June 9, 2015

“Money isn’t everything, but it sure keeps you in touch with your children.”
—J. Paul Getty

Get Your Ass out of the Basement and Find a Job!

June 2, 2015

It made me laugh.

Memorial Day, Yohei Sagami, and the Price of Freedom

May 26, 2015

Memorial Day is a very nostalgic, solemn day for me.

Deciding Between Farah Fawcett and Timber

May 19, 2015

Someone I used to be married to tried to tell me that diamond jewelry and Rolex watches were good investments. Yeah… and I look like Brad Pitt.

Investing in the American Dream

May 12, 2015

Education Is a Way of Life

My mother and I journeyed to the United States from Japan in 1957.

How to Profit from the False Promise of Internet Advertising

May 5, 2015

My first exposure to the advertising business was McMann & Tate, the agency where Darrin Stephens of Bewitched worked. Sure, I tuned in mainly to see the lovely Samantha Stephens, but I do remember that there was a lot of money to be made as an ad man.

The Underwhelming Demand for the Apple Watch

April 28, 2015

My father was a vegetable farmer, and he truly believed that hard, hard work was an entrance requirement to get into heaven. And he expected his sons to work (almost) as hard as he did.

Corporate America’s Millstone of Too Much Cash

April 21, 2015

Corporate America is flush with cash. Amazing amounts of cash.

Finding Yield in a Subzero World

April 14, 2015

“It’s basically a fee for fear.”

—Nicholas Colas, chief market strategist at ConvergEx

“It’s a glaring warning sign of deflation. We’ve never really had deflationary fears throughout such a widespread part of the world before.”

—Phil Camporeale, JPMorgan Asset Management

Washington D.C. Accounting Magic and Wall Street Greed

April 9, 2015

“I’m from the government, and I’m here to help you.”

Macau: Six Times Bigger than Vegas, with Six Times the Opportunity

March 31, 2015

58 years old. Yes, I’m the right age, but I’ve never considered myself to be a yuppie.

The Stock Market Hot Potato: Volatility, the VIX, and You!

March 24, 2015

“When did Noah build the Ark, Gladys? Before the rain, before the rain.”
—Nathan Muir (Robert Redford), in Spygame

Chinese Car Buyers Swarm Shanghai Auto Show

March 17, 2015

Five Stocks to Profit from the Luxury-Auto Boom

When I was a teenager, I dreamed about owning a Corvette, but that was when I had no money and even less brains.

Oil, Divorce, and Bear Markets

March 10, 2015

Everybody loves a parade. I sure did when I was a child, but I’m paying attention to a very different type of parade today.

Oil, Jobs, Consumer Confidence, and Humpty Dumpty

March 3, 2015

Politicians, Wall Street, and the Federal Reserve Bank want you to think the economy is doing great thanks to the big improvements in the labor market.

Airlines: The Biggest Winner from Cheap Oil

February 24, 2015

I’ve devoted several recent issues to the brick wall of trouble oil producers and oil services stocks are headed for. No question that falling oil prices are going to crush the profits for the entire food chain of oil.

Keystone Pipeline Is DOA: Is the Trans-Alaska Pipeline Next?

February 17, 2015

Both houses of Congress passed legislation approving the Keystone Pipeline last week, but it’s headed for a certain Obama veto. “As we have made clear, the president will veto this bill,” said the White House.

Wall Street Double-Talk and Double Opportunity of Falling Oil Price

February 10, 2015

The stock market has developed a new type of love-hate relationship with the price of oil. In the past, falling oil prices were treated as an economic positive because they freed up more money for Americans to spend on other things, such as dining out or clothing. However, the steep plunge in oil prices has triggered a reverse-psychology reaction on Wall Street: falling oil prices are bad because they signal a slowing global economy.

Procter & Gamble, the Strong Dollar, and Pepto Bismol

February 3, 2015

Applied Materials. Boeing. Coach. Ford. Intel. McDonald’s. Nike. Pfizer.

Income Inequality? American Savers Treated Like Dogs

January 27, 2015

One of the hot political topics these days is income inequality, but one of the groups of Americans that’s the most mistreated by Washington DC is the millions of Americans who have responsibly saved for their retirement.

The Single Most Important Economic Statistic that the White House Never Talks About

January 20, 2015

For the first time in 35 years, American business deaths now outnumber business births. —Jim Clifton, CEO, Gallup Polls

Danger, Will Robinson! Danger!

January 13, 2015

— Robot, Lost in Space

Oh, the pain, the pain.

— Dr. Zachary Smith, Lost in Space

Beyond Tesla: The Huge Profit Potential of Lithium

January 6, 2015

One of the stocks that I get the most questions about is Tesla. I’m not sure whether investor interest is due to the gorgeous lines of the Tesla Model S, its amazing high-performance engine, the high-flying stock, or the energy-saving nature of all-electric vehicles… but Tesla is a very popular subject.

Q3 GDP Jumps 5%; Ha! The Crap Behind the Numbers

December 30, 2014

I was raised on a farm and I’ve shoveled more than my share of manure. I didn’t like manure back then, and I like the brand of manure that comes out of Washington, DC, and Wall Street even less.

Live Every Day Like It Is a Holiday

December 23, 2014

If you’re a longtime reader, you know that I spend most of the year in Asia. I have lived in Japan, Singapore, Hong Kong, Thailand, and the Philippines.

Dumb & Dumber: Relax Mortgage Rules, Financial Crisis 2.0

December 16, 2014

Mortgage credit is too tight. They should have changed that a long time ago. —Jamie Dimon, CEO JPMorgan

Today’s rule is an important step forward in creating an environment where good lenders and good borrowers can work together without reservation. —Julian Castro, HUD Secretary

The Perils and Opportunities of the 2014 Holiday Shopping Seasons

December 9, 2014

For two college summers and Christmas vacations, I worked the docks at the Port of Tacoma.

The Healthy Bull Market: Bah, Humbug!

December 2, 2014

Are you a long-term investor? Convinced that all you have to do is wait long enough to be guaranteed huge stock market profits?

Stock Manipulation 101: Using Stock Buybacks to Mask Deep Business Problems

November 25, 2014

Stock buybacks are always a good thing… right? That’s what the mass media has trained investors to believe, but there are times when stock buybacks are a horrible strategy.

Correction? What Correction?

November 18, 2014

The textbook definition of a correction is a drop of 10% or more. The stock market came close to hitting that correction benchmark and has mounted a furious rally since mid-October. The S&P 500 has staged a remarkable rally, jumping by 12% from its October lows in just four weeks.

Not Yet Time to Celebrate a Market Turnaround

November 11, 2014

The Wall Street crowd liked what they heard last week and pushed the Dow Jones to a new high. In particular, the trio of the Republican landslide victory, an overall positive Q3 earning season, and a good jobs report that showed unemployment dropping to 5.8% was behind the rally.

Watch Out: Facebook’s Skyrocketing Expenses Signal Trouble

November 4, 2014

I used to think that nobody could spend money faster than my ex-wife, but I was wrong. Mark Zuckerberg is putting her to shame.

The Ticking Time Bomb of the Strong US Dollar

October 28, 2014

Get used to the headlines like the one below. You’re going to hear hundreds of US multinational companies blame their profit shortfalls on the strong dollar.

5 Warning Signs Point to Real Estate Market Downturn

October 21, 2014

Investing is about piecing together different bits of information into an illustrative picture—sort of a Wall Street version of the connect-the-dots game we played in kindergarten.