“You Better Brace Yourself”

These were the words spoken by JPMorgan CEO Jamie Dimon at a recent financial conference. Mr. Dimon warned of an economic “hurricane” on the horizon, largely due to the Federal Reserve (the “Fed”) shrinking its balance sheet in response to high inflation (i.e., “quantitative tightening”), and the impact of the Russia-Ukraine War on commodities, including … Continued

Sigma Signals

Equity prices staged a sharp recovery last week while the signals we monitor were largely unchanged. It is likely that the equity markets will continue to show outsized, trendless volatility. The mid‐term elections in November will increasingly absorb the attention of investors and the recent Supreme Court decision reversing Roe versus Wade may change the … Continued

Who’s your coach?

Many of my clients along with all of my family, friends and co-workers know that I’m a self-admitted long-distance running enthusiast.  As much as I try to limit droning on and on about distance running, it happens a lot.  Running is one of my greatest passions.    I started training for the marathon after college … Continued

Sigma Signals

With a likely profitability recession looming, the valuation on the S&P 500 is now less favorable (green to yellow). China and India are building new coal fired electric plants while Germany recently announced it is restarting its plants. This could influence energy policy in the US and the rest of the globe as energy security … Continued

Friend-Shoring

This is the new buzzword for the business strategy of running supply chains only through countries that are close political partners.  Businesses, mindful of the complications relating to the maintenance of supply chains in the face of unexpected challenges, such as Covid-19 and the war in Ukraine, are becoming increasingly cognizant of the increase in … Continued

Sigma Signals

No signal changes this week. Inflation and the Russian invasion of Ukraine continue to dominate the headlines. The US economy is strong (rest of world, less so) but rising interest will prove a drag. Unlike past periods of heady economic growth, at present there is no sign of excess inventory on durable goods (housing and … Continued

Honey, I Shrunk the Economy

Let’s hope that the Fed’s efforts to moderate inflation turn out to have the same happy ending as Disney’s movie, “Honey, I Shrunk the Kids.” As we all know, the Fed is currently in the process of bringing its financial arsenal into play in an effort to lower inflation levels and move back toward historical … Continued

Smoot-Hawley Tariff

The Tariff Act of 1930, commonly known as Smoot-Hawley, was a law that implemented protectionist trade policies in the US.  Protectionism is the economic policy of restricting imports from other countries.  Proponents argued that protectionist policies would shield US producers, businesses and workers, while opponents believed that implementing protectionist policies would adversely affect consumers, and … Continued

Replacement Cost

Investors should routinely make sure they understand how the companies they are considering account for their inventories.  Recent, politically driven allegations of oil industry profiteering, suggest that a better understanding of inventories, accounting and replacement costs, may be appropriate. Generally, most companies use either the Last-In, First-Out (LIFO) method or, First-In, First-Out (FIFO) method in … Continued

Electric Utility Overload?

It is becoming increasingly apparent that the U.S. is in danger of not having enough electricity.  A number of electric-grid operators have warned that power generating capacity is struggling to keep up with demand.  This could lead to rolling blackouts during peak periods. There are a number of reasons for the increasing gap between generating … Continued

Out of the Frying Pan into the Fire?

According to Wikipedia, this phrase is used to describe the process of moving or getting from a bad situation into a worse one.                                     Maybe Europe should take note.  Recently, the European Union (EU) announced that solar power was destined to be the kingpin of their effort to become independent of Russian energy imports by 2027. … Continued

ESG?  Who Decides?

Investopedia defines environmental, social and governance (ESG) criteria as a set of standards for a company’s behavior to be used by socially conscious investors to screen potential investments.  S&P has developed an index that purports to align investment objectives with ESG values.  This is all well and good, but investors should be sure that the … Continued