October 28, 2016 By Steve Blumenthal “You diversify.  You have a whole bunch of uncorrelated investment bets. And then you understand it (the situation) as best you can.” — Ray Dalio I had a long talk with an advisor client this week about portfolio construction, the economy, the debt cycle and [...]Read More >

October 21, 2016 By Steve Blumenthal "So the real question that I think people should think of is: Are we at the end of a long-term debt cycle?" — Ray Dalio I’ve written a great deal about debt.  In last week’s piece, I showed the enormity of the problem.  Growth is slow and I believe will [...]Read More >

October 14, 2016 By Steve Blumenthal “The most rewarding things you do in life are often the ones that look like they cannot be done." "I've always made a total effort, even when the odds seemed entirely against me. I never quit trying; I never felt that I didn't have a chance to win.” — Arnold [...]Read More >

October 7, 2016 By Steve Blumenthal “Value investing is simple to understand but difficult to implement.” — Seth Klarman, The Baupost Group Today, let’s take a look at the most recent market valuations.  Hint and not a surprise: both stocks and bonds remain expensively priced.  Value?  Not [...]Read More >

September 30, 2016 By Steve Blumenthal “It’s like déjà vu all over again.” -- Yogi Berra Something just doesn’t feel right to me.  In March 2008, Bear Stearns executives made a shocking discovery: They were nearly out of cash.  They faced a barrage of withdrawals from worried clients.  In a [...]Read More >

September 23, 2016 By Steve Blumenthal “Being fully invested is a myth.  You shouldn’t always be fully invested.” Mark W. Yusko, Founder, CEO and CIO Morgan Creek Capital Management, at the 2016 Morningstar ETF Conference Last week, I shared some of my notes from the recent Morningstar ETF [...]Read More >

September 16, 2016 By Steve Blumenthal Human beings do something really well.  They buy what they wish they would have bought and they are spectacular at it. The last time we had a record amount of money move to passive was in March 2000.  Back then only 10% of the market was passive and today it [...]Read More >

September 9, 2016 By Steve Blumenthal I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an "easing cushion" should recession come knocking at the door, but they [...]Read More >

September 2, 2016 By Steve Blumenthal Woody Allen closes “Annie Hall” with a joke: This guy goes to a psychiatrist and says, ‘Doc, my brother's crazy; he thinks he's a chicken.’  And the doctor says, ‘Well, why don't you turn him in?’  The guy says, ‘I would, but I need the eggs.’ That pretty [...]Read More >

August 26, 2016 By Steve Blumenthal “We live at a time where the unthinkable has become common.” — B. Scott Minerd, Managing Partner, Guggenheim Partners Do you remember the story book The Little Engine That Could?  The best known version of the story was written by "Watty Piper," the pen name [...]Read More >

August 19, 2016 By Steve Blumenthal “In the realm of economics, no government can play god.” -- José Niño, Analyst, Acton Circle of Chile I came across today’s intro quote this week while sitting in my beach chair facing the Atlantic Ocean.  The title seems apropos to the world we find ourselves [...]Read More >

August 12, 2016 By Steve Blumenthal “We’ve been bulls on 30-year Treasury bonds since 1981 when we stated, “We’re entering the bond rally of a lifetime.” “Their yields back then were 15.2%, but our forecast called for huge declines in inflation and, with it, a gigantic fall in bond yields to our [...]Read More >

On My Radar: Taking the “E” Train South August 5, 2016 By Steve Blumenthal “There is no panacea for the low returns implied by asset valuations today. Anyone suggesting differently is either fooling themselves or trying to fool you.  But piling into the assets that have been the biggest help to [...]Read More >

July 29, 2016 By Steve Blumenthal “Last week, market conditions joined the same tiny handful of extremes that defined the 1929, 1972, 1987, 2000 and 2007 market peaks.” - John P. Hussman, Ph.D. (Source) At a recent investment conference, one of the panelists was an investment officer for the [...]Read More >

July 22, 2016 By Steve Blumenthal “We’ve had a lot of QE and we are not sure if it works.” - Former Dallas Fed President, Richard Fisher (Source) One of the best reads for me this week came from the creative pen of Danielle DiMartino Booth.  She was an analyst at the Dallas Federal Reserve for [...]Read More >