Tag Archives: confidence

Consumer Sentiment – down but still not down enough.

Over many years I’ve marveled at how reliable consumer sentiment has been as a contrarian indicator.  When it reaches rock bottom then the markets, followed by the economy begin to recover from a crisis – whether a recession or financial.  … Continue reading

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When Consumer is Happy, Markets are High Risk

Consumer sentiment is usually considered an economic leading indicator.  When confidence is at rock bottom levels, it’s a sign that the economy and stocks markets are heading lower.  This isn’t true.  I’ve published for years that consumer confidence is one … Continue reading

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Since when is the weather an economic barometer? Absurd!

Most of the economic data we’ve been seeing (don’t forget it’s historical data) belies the common thinking that the weather has been dampening economic growth.  The just reported U.S. GDP revision for the 4th quarter (up from 2.4% to 2.6%) … Continue reading

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China? No need for worry in the year of the snake!

It’s the year of the snake, which seems appropriate since everyone is worried about the slowing of the Chinese economy. In previous posts, I’ve described why the economic course of action China has adopted is brilliant – the country’s only … Continue reading

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High Consumer Confidence is bad news for stock market!

The latest consumer confidence release shows a significant improvement. “Rising home prices and a rising stock market are two key factors that are boosting consumer confidence. And a third factor is rising strength in the jobs market. The consumer confidence … Continue reading

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Bonds at risk, inflation threat and stocks fully valued!

In mid-October the S&P 500 Index was at 1428.50 and I suggested (despite all the pessimism at that time) that if rates and inflation remained steady we could see the index move 20% higher. To be precise I reasoned: For … Continue reading

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Beware a Confident Consumer – bound to be disappointed!

I’ve written before (many times) about the fact that strong consumer confidence is not at all good for the markets.  You must have heard the news: “The Consumer Confidence Index increased in November and is now at its highest level in more … Continue reading

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Olympic Rally or the Real McCoy?

Back in early June, I posted Yogi Berra – as good an investment strategist as any! in which I suggested : “If financial turmoil continues unabated and rates remain extremely low, things could go very well for the stock markets, especially … Continue reading

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Facebook and yes; looks matter more than reputation

Our love of good stories often biases our decisions, which is evidenced by the scrambling to buy the Facebook IPO despite the fact that there’s virtually no concrete financial data to justify the price of the business (if it is even … Continue reading

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The FOLLY of Risk Management

Every closet economist knows that risk is the most difficult concept to put a number to.  Most modelling relies on various (historic or predicted) estimates of volatility, but volatility is a very funny thing.  We often forget, especially during economic … Continue reading

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