The Population Problem

According to recently reported data for the year ended June 30, 2022, the US population is continuing a recent trend of slow growth, with an increase of just 0.4%, or 1.3 million, only marginally better than 2021’s 0.1% gain.  Key factors include 245,000 more births than deaths and approximately 1.0 million net immigrants. Economic growth … Continued

Sigma Signals

Week of January 23, 2023 Treasury yields across the maturity spectrum spiked to levels not seen in a decade or more. Interest rates appear poised to plateau, and therefore we are moving our US Treasury signal from green to yellow. With commodity prices softening, we believe inflationary pressures might moderate. Certain Federal Reserve Board governors … Continued

It’s Going to Take a Lot of Green to go Green

It is becoming increasingly clear that there is a major effort to accelerate the development of renewable energy.  Unfortunately, what was already likely to be expensive, is now facing unexpected cost increases.  For example, there have been recent reports that offshore wind developers are facing financial challenges that may impede several East Coast projects.  Supply … Continued

Sigma Signals

Week of January 16, 2023 Notwithstanding positive developments on inflation from CPI data released last week, comments from varying Federal Reserve Board Governors suggests an unwavering stance towards subduing the inflation beast. In the short term, this can be construed as a negative (although equity prices have largely advanced in 2023 as intermediate term interest … Continued

A Focus on Management

We have always believed that management was important, as noted in our blogs of July 18, 2013, “Does Management Matter?” and October 12, 2015, “Management Matters.”  Recently, management seems to have become, more than ever, headline news.  Consider Bob Iger’s return to Disney and the antics of Elon Musk and his unfathomable purchase of Twitter.  … Continued

Sigma Signals

Week of January 9, 2023 “Stair-Climbing Wheelchairs, Closed-Caption Glasses: Assistive Tech Gains at CES in Las Vegas” reads the headline in the Wall Street Journal article of January 6, 2023. With the Fed fighting inflation, and the Russians attacking the Ukrainians, it is easy to lose sight of developments that cumulate to advance the cause … Continued

Due Diligence

Wikipedia defines due diligence as the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party. While much is still unknown regarding the debacle associated with FTX, one thing is abundantly clear, there was an almost universal and appalling … Continued

Sigma Signals

Week of January 2, 2023 The new year equates, for many, to a fresh start. Still, we are reminded of time tested principles that have resulted in long term success and wealth accumulation in investing. In large part, this is a function of productivity growth, which leads to enhanced enterprise profitability. Innovative companies are the … Continued

Sigma Signals

Week of December 26, 2022 According to Forbes, in a publication dated October 2, 2022: “Since 1950, there have been 18 midterm election cycles, and in the 12 months following each of those cycles, the stock market has had positive returns… with an average return of 18.6%”. Our Signals remain unchanged. Bob Bilkie, CFA

There Are Surveys and Then There Are Surveys

Last year, a survey conducted by Bitcoin IRA showed that “a third of Americans say that bitcoin will hit $100,000 by the end of 2022” and about half of Americans say the cryptocurrency’s price will rise. Isn’t that interesting?  Even more interesting is that the pool of people surveyed consisted of a “randomized group of … Continued

Sigma Signals

Week of December 19, 2022 Fed Chair Jerome Powell raised the Federal Funds Rate another 50 basis points. Volatility in the equity markets ensued. Is a recession in 2023 all but guaranteed? Or will the Fed deliver a soft landing? No changes to our Signals this week. Happy Holidays to everyone. Michael Mullenax & Bob … Continued

Sigma Signals

Week of December 12, 2022 Equity prices largely fell last week while bond yields similarly declined. Oil traded at a near one-year low, whereas gold prices strengthened. The conclusion – near term economic growth may weaken but the inflation beast is not dead. No changes to our signals. Bob Bilkie, CFA