Across 120 years of data, the most overvalued markets occurred in 1905, 1929, 1965, and 2000. This excludes today's stock bubble. (See the purple triangles below.) Interesting enough, when one adjusts for inflation, each of the occurrences led to periods of negative...

The federal government is reining in its direct payments to households. Similarly, the Federal Reserve intends to reduce its money printing (QE) policies – the same policies that have created the speculative belief that our central bank can permanently levitate stock...

Remember the trade war a few years back? The whole goal had been to shrink our trade deficit with China in an effort to enhance the U.S. economy's prospects. Perhaps unfortunately, the U.S. government responded to the coronavirus crisis with far too much stimulus. On...

Is the stock bubble about to pop? Maybe not. Then again, patching all of the pinhole pricks simultaneously could prove difficult. Here are five significant headwinds for stocks: 1. Inflation. Few investors pay attention to things like the Baltic Dry Index. That's a...

Consumers are already grappling with the highest inflation in 13 years. The Fed believes it is transitory, but when was the last time companies lowered employee wages after raising them? When is the last time service providers – restaurants, bike shops, accounting...

Do you ever wonder why bad economic news seems to send stocks higher? For example, industrial production is growing at a slower pace than anticipated. Ditto for manufacturing. Yet stocks seemed to rally on the news. Simply put, poor economic data helps share prices...

There are smart people on social media. Brilliant people. Yet, many of them have swallowed the bait whole. They believe that the stock market can only move one direction. Up, up, and away. Everyday folks too. Young, old, educated, uneducated... it does not matter. Buy...

Since the early 1970s, the S&P 500 has witnessed average year-to-date gains of 6.0% through August 31. Here in 2021? 20.5%. It is not unusual to see big run-ups in the  10 Minute Bitcoin market. Yet the parabolic rise off the pandemic lows of March 2020 has no...

Is the "stock market" really going up? Well, large company share prices are. If you drill down into the mid-sized and small-sized vehicles, however, cracks are beginning to show. Smaller companies are negative on a month-over-month basis. Micro-caps are down even...

The economy has largely recovered from the 2020 recession. And the Federal Reserve is finally thinking about slowing down its money printing stimulus. Perhaps ironically, the stock market is not too happy about it. The S&P 500 has dropped about 2% from recent...

Government leaders choose to ignore rising food and energy costs when discussing inflation data. Yet, consumer staples companies do not ignore rising costs. Nearly all of them -- Procter & Gamble, Coca Cola, Kimberly Clark, Tyson, General Mills -- are passing...

According to an index by Goldman Sachs -- an index that takes into account the value of the dollar as well as interest rates -- U.S. financial conditions are easier than they have ever been. Companies and consumers can "borrow-n-spend" like never before. Ultra-loose...

The central bank of the United States, the Federal Reserve, exists as an economic savior and as a financial persecutor. As a rescuer, it successfully bailed out the economy during the coronavirus shutdowns by creating trillions in digital dollar liquidity. (See the...

Jeremy Grantham is chairman of the board for the well-known asset management firm,  Grantham, Mayo, & van Otterloo (GMO). Yet he is much more than that. He is also an accomplished "bubble-ologist." In a recent interview, Grantham said: "Bubbles are unbelievably...

The Federal Reserve explains away rising costs across commodities, shipping, food, retail and rent as "transitory." They might be right. On the flip side, the stock bubble is ignoring inflation-adjusted data as it relates to valuation. Specifically, in the three...

The U.S. Federal Reserve has purchased oodles of assets with electronic currency credits. Funny money. Ditto for the Bank of Japan, People’s Bank of China, and the European Central Bank. Not surprisingly, the more that central bankers add assets to their collective...

Is the stock bubble making investors wealthy? Temporarily. Consider household equity exposure relative to disposable personal income. Investors have more skin in the equity game than they ever have before. What that means is that, with the S&P 500 sitting atop a...

Theoretically, the extent of corporate success (e.g., sales, profits, cash flow, financial health, etc.) propels stock prices. That is no longer the case. For example, one can examine the price-to-sales metric (P/S) by S&P 500 decile. Low valuation deciles might...

Christian Bale played hedge fund manager Michael Burry in The Big Short. The actor's portrayal of an eccentric loner with genius-like qualities was downright riveting. Of course, it was Burry, not Bale, who anticipated the implosion of the housing balloon. It was...

You hear the stories in everyday life. A neighbor receives $75,000 up and above an astronomical listing price for a home. A friend boasts about making a killing in a crypto like Dogecoin or a meme stock like AMC Entertainment Holdings (AMC). The primary reason for the...

Is the stock market overvalued, undervalued, or fairly valued? One of the most popular metrics for making that call is the cyclically-adjusted price-to-earnings (CAPE) ratio. The CAPE ratio, also known as P/E10, has averaged 17.0 since the 1880s. It reached an epic...

The central bank of the United States, the Federal Reserve, creates digital dollar credits to buy bonds. If you buy bonds to depress interest rates and to inject money into the financial system, you get higher asset prices. Stocks. Bonds. Real Estate. Of course, the...

The federal government continues to hand out borrowed money to stimulate the economy. It is running monstrous deficits to do so. One consequence of spending too much borrowed money? Inflation. Copper, lumber, oil, gas, livestock, agriculture -- you name it. Stuff...

Inflation is ubiquitous. You are seeing it at the gas pump. You are seeing at the grocery store. You are seeing it when you dine out. Interested in building a patio? An addition to your home? You might be shocked by the cost of lumber. And it is not just wood. Get a...

The U.S. economy surged throughout the 1920s. With World War I in the rear-view mirror, consumers spent feverishly on autos, electrical appliances and movies. With the threat of coronavirus fading in 2021, might we be witnessing yet another Roaring Twenties? After...

When you pump $12.3 trillion (and counting) into an economy, things are going to inflate. For example, commodities are going to be more expensive. Take a look at the vertical leap in prices for copper. And lumber. Home prices themselves become bubbly. Home prices have...

The United States government raised taxes to finance the debt that accrued in World War I and World War II. Today, we are not engaged in a military intervention of monumental magnitude. However, the public debt-to-GDP is greater now than at any other point in American...

Private money management firms often sell at a multiple of revenue. A frequently talked about metric? Price-to-revenue. For example, a wealth management company that generated $1,000,000 over the last year might be valued at 2.25x, or $2,250,000. At least in the...

On April 13, 2021, the S&P 500 SPDR Trust (SPY) closed above its opening price for the 13th consecutive session. That has never happened in the 28-year history of the exchange-traded fund. Without question, enthusiasm for stocks is feverish. But is it rational?...

When does extraordinary excess become visible? In hindsight. Consider the stock market at the start of 2000. Despite ridiculous valuations, scores of profitless IPOs, and an absence of common sense, few seemed to recognize the risks ahead of time. The S&P 500...

Homes, stocks, junk bonds, you name it. Assets are ridiculously frothy everywhere you turn. The craziness is hardly confined to traditional Wall Street assets, however. Day-trading teenagers with social media cache are getting "rich" on digital NFT Nike art and...

Somewhat surprisingly, 200 of the 1500 largest companies have proffered negative earnings over three consecutive years. Their stock prices must have suffered, right? Hardly. According to the Leuthold Group, investors have piled into unprofitable corporations more than...

Over the last 40 years, the U.S. government has chosen to spend significantly more money than it takes in. It is the reason that the country must issue trillions of dollars of debt. Spending became particularly obscene during the financial crisis of 2008. And since...

Investors may or may not be aware of their euphoric attitude toward risk taking. Yet Goldman Sachs data suggest that risk appetite is every bit as extreme today as it was before the dot-com bubble burst in 2000 and before the global financial collapse in 2008....

Institutions -- mutual funds, pensions, insurance companies, corporations, sovereign wealth funds -- often represent smarter money. Indeed, stock prices tend to rise when institutional buying is robust. However, history has been less kind to mom-n-pop investors...