Latest Posts

  • How To Earn A 10% Yield On Cost From PepsiCo Dividends

    Dividend yield is one of the most commonly utilized financial ratios for income investors. It is also one of the easiest to calculate. The current dividend yield is simply the annual dividend payment of a stock divided by the share price. It tells an investor the amount of dividend income they will receive from buying a stock, expressed as a percentage. For example, PepsiCo (PEP) has a current dividend yield of 3.4%. But income investors should also familiarize themselves with yield on cost, which is different than the current dividend yield. While the current dividend yield is simply the company’s dividend per share divided by the current ...
    On October 21, 2018 / By

  • Extreme Cold Weather Forecast Puts Natural Gas ETFs In Focus

    Natural gas futures for November rose by nearly 2.6% to $3.242 per million British thermal units (mBtu) on Oct 15 due to forecast of below-average temperatures in the coming 11-15 days. The south and Midwest regions are expected to be most affected. Per the U.S. Energy Information Administration (EIA) weekly inventory release, natural gas storage injections were in line with expectations but inventories remain significantly below their five-year moving average just before the onset of winter. Working natural gas inventories are expected to enter the winter heating season at 3,263 billion cubic feet per day (Bcf/d), the least since 2005. Fun...
    On October 21, 2018 / By

  • The Short-Term Trend Ahead

    I doubt we’ll get much of a short-term rally until after the midterms, and then I expect some market strength through to the end of the year. The only problem with this view? Everybody else thinks the same thing. Here is a terrific quote from today’s column by Mike Burk. Last week began with a sharp rally. Sudden sharp rallies in bear markets are the complement to the sudden sharp declines seen in bull markets. The Long-Term Outlook Are we near a bull market top? I don’t know, but I do think there is a good chance that we are near the end of this bull market. I think we all recognize that if the market is topping, it will ...
    On October 20, 2018 / By

  • The “World’s Most Bearish Hedge Fund” Reveals How It Will Trade The Next Crash

    After a painful stretch of five consecutive down months, September couldn’t come fast enough for Horseman Global, which we previously dubbed “the world’s most bearish hedge fund”, due to its exposure which, while fluctuating, has been net short for the past 6 years and most recently had a net short position of -47.33%, even more bearish than it -43.5% net last month.  In September, the fund finally rebounded, rising 1.8% – its first up month since March -bringing its YTD return to -8.79%, with “gains coming from the long book and the short book. The currency book lost money” according to CIO Russell ...
    On October 20, 2018 / By

  • Tracking Trump’s Tariffs: US Vs. Canadian Rail Loads

    Let me start out by saying that there is an excellent case for the US imposing a VAT (“value added tax”) similar to those enacted by Canada and European countries in order to recapture the losses due to far lower wages in China and other developing countries. Additionally there is an excellent national security rationale for not entering into”free trade” agreements with authoritarian governments who will use the benefits to build up their militaries. Not that this is what Trump is doing, of course. In any event, I’ve already noted that the weekly rail report by the AAR seems like an excellent way to track the impact of Trump’s tar...
    On October 20, 2018 / By

  • This Is The Worst Case Scenario If Investors Dump Saudi Arabia

    So many Wall Street CEOs and other titans of investing and industry have pulled out of next week’s “Davos in the Desert” conference that even the Ritz-Carlton, owner of the Riyadh venue hosting the conference (as it did last year), has been slammed by human rights groups over its continued support for Crown Prince Mohammad bin Salman and his brutal regime. In perhaps the biggest blow to the conference’s clout, Treasury Secretary Steven Mnuchin has opted not to attend, even as President Trump has insisted that Saudi Arabia’s story about the circumstances surrounding the (now confirmed) death of critical journalist...
    On October 20, 2018 / By

  • Is All That Glitters Gold?

    The correction we experienced last week – wherein $2.6 trillion was lost in the global stock market – was due to the velocity of the rate spike that triggered an emerging market and volatility panic (the volatility index VIX doubled from my call) resulting in our market drop. At first, Gold (GLD) didn’t act as if it would be a safety play but on day two it moved higher. Since then, I have been ‘collecting’ evidence to support Gold as an investment theme, not just a trade. The Lurch First, I had been waiting for “the lurch”… which is my technical term that happens to price after huge volume has entered long and price stops mov...
    On October 20, 2018 / By

  • Market Clings To Support

    Over the last couple of weeks, as interest rates surged above 3%, we explored the question of whether something had “just broken”  in the market.  Did Something Just Break? 10-05-18 Yes, Something Just Broke 10-12-18 This is an important question given the current stance by the Fed appears to be considerably hawkish as noted by the recent minutes:  A Number of Officials Saw Need to Hike Above Long-Run Level “A few participants expected that policy would need to become modestly restrictive for a time and a number judged that it would be necessary to temporarily raise the federal funds rate above their assessments of its longer-run l...
    On October 20, 2018 / By

  • USD/CAD Forecast October 22-26 – Will The Canadian Dollar Rise On The Rate Hike

    Dollar/CAD traded up and down around the 1.3000 level, looking for a new direction in a mixed week for both the US and Canadian dollars. What’s next? The rate decision by the BOC is the primary event of the week for the loonie. Here are the highlights and an updated technical analysis for USD/CAD. The BOC Business Outlook Survey was relatively upbeat, lifting expectations for the rate decision in the upcoming meeting. There is little doubt about a rate increase, but the publication served as a warm-up. On the other hand, Canadian inflation surprisingly dropped in September while retail sales badly disappointed with significant drops. Will...
    On October 20, 2018 / By

  • E Charts And History Reveal Why The Fed Must Break Stuff

    There really is nothing to worry about when it comes to the Fed, unless you think things are not any different this time around. History teaches that the Fed breaks stuff, that it must break stuff. That is discussed below. Despite all the discussion that occurs below, keep this in mind. The cost of raw materials is soaring. That can be an end of cycle warning. While not all commodities are soaring, some are, like wood pulp (chart below), and nitrogen.     In watching the Fed, Professor Tim Duy and Dr. Scott Sumner seem to be in agreement regarding monetary policy. No general inflation gives the Fed breathing room according to the two ec...
    On October 20, 2018 / By