As seen in the latest issue of Master Investor Magazine Between a Rock and a Hard Place Eight years after the nadir of the financial crisis, interest rates are still near zero in the US and negative in many European countries and Japan. Fiscal policy has quietly assumed a secondary role while central bankers have…
The inability of the FED to hike rates is turning into a chronic disease. Each time the central bank becomes more hawkish in anticipation of a hike, something happens to erode the prospects for even the smallest hike. Since the time of Ben Bernanke, the FED has been putting too much stock in the market’s…
At first it was about the return on capital and now it is about the return on labour. One at a time, the main incentives that keep a market-based economy oiled are being wrecked. Central banks have already eliminated interest rates, discouraging saving; now governments want to introduce a universal basic income, which will discourage…
The financial crisis of 2007-2009 should be renamed the financial crisis of 2007-(?) when it comes to the Eurozone. Eight years after the peak of the crisis, the region is still drowning in debt, plagued by deflation, hobbled by a weak banking sector (headed by a big, fat central bank), and submerged in weak economic…
The last year has been tough for Valeant Pharmaceuticals, as the Canadian specialty drug maker has been involved in scandals, accounting misstatements and fraud, all of which battered down its share price from a 2015 high at $236.81 to the current price near $29. On April 7, I recommended a long position in this “troublemaker”,…
Global gyrations During the last decade we have played witness to massive capital movements around the world. Money has flowed from developed countries towards emerging markets, just to flow back in the opposite direction at a later date. While lifting barriers to capital movement has helped intensify global trade and accelerate the development process of…
Over the last week much ink has been spent in trying to pinpoint the Fed’s next policy moves from a meticulous analysis of April’s FOMC Minutes. But such a precision exercise seems redundant now because, only one week after the Minutes were released, the FED has already cast doubt over everything. Policymakers have been tweaking…
The Australian economy has been hit hard by a global decline in the demand for commodities, a fierce currency war between major central banks, and the false prospects of interest rate hikes in the US. Reflecting these deteriorating conditions, the Aussie declined from 1.10 against the US dollar in 2011 to 0.70 in 2015. But,…
The last edition of Master Investor Magazine was dedicated to Warren Buffet, who is “perhaps the greatest investor who ever lived”. If anything is to be learnt from the “Sage of Omaha”, it is that investors should buy value and use the short-term market fluctuations in their favour to purchase great stocks at low prices.…
Over the last few months we have witnessed a series of presidential primary elections and caucuses to determine which candidates will represent the Democratic and Republican parties (among others) in the final stages of the US presidential race. The last few months have been not only a time for reflection about economic, political and social…
