In the continuing series of reports from the 10th annual Strategic Investment Conference, presented Altegris Investments and John Mauldin, the question of why you should own bonds was answered by Jeff Gundlach who is the CEO and CIO of Double Line.
Articles written by: Lance Roberts
By Lance Roberts, StreetTalk Advisors I recently posted two pieces discussing that the peak of economic growth was likely behind us. (See here and here) In particular both pieces addressed personal consumption expenditures and their importance to the overall strength and direction of the economy. To wit: “…personal consumption expenditures (PCE) comprise about 70% of the gross domestic product calculation. As PCE goes – [...]
The recent plunge in gold prices below $1500 an ounce has suddenly awoken, well, just about everyone. The “gold bugs” are yelling that it is a conspiracy theory by the Fed while the stock market bulls say it is a sign that the Fed has achieved its goal of creating economic growth. Unfortunately, both arguments, while great for headlines, are wrong.
Over the past couple of months I have been discussing the rising risk in the markets as asset prices have been propelled higher by continued Federal Reserve monetary actions even as corporate earnings have weakened. In particular, in the post titled “There Is No Asset Bubble?”, I stated:
I recently penned an article entitle “Visualizing Bob Farrell’s 10 Investment Rules” which covered some of the very basic primers of money management and being a successful investor over the long term. However, Bob Farrell is only one of the many truly great investors of our time from which we can learn.
As the markets once again approach historic highs – the overly exuberant tone, extreme complacency and weakness in the economic data, bring to mind Bob Farrell’s 10 investment rules. These rules should be a staple for any long term successful investor.
There have been several articles as of late discussing that the next great secular bull market has arrived. Historically, secular bear markets have averaged about 14 years, and considering that we began writing about the current secular bear market cycle in early 2000, that would put the current cycle about 2 years away from it historic average.
Since the end of last year the bullish optimism for 2013 has risen to an almost fevered pitch. Concerns of any further disruption from the Eurozone have faded into the mist. With the”fiscal cliff” issue resolved, and little concern that the “debt ceiling” will not be raised, the worries of a domestic drag have been all but alleviated.
As we rapidly approach the great “debt ceiling debate,” of which we are told that we should”rise above,” there has been a rising chorus of arguments for ways to get around the debt ceiling, such as the platinum coin idea, as well as utilizing the 14th Amendment. There have also been numerous comments made that the debt ceiling should be disposed of entirely.
In my November 5th report on employment I stated: “…when taking into account the recent slate of economic weakness, post-election we are likely to see many of the recent job gains revised away as the data aligns itself with overall economic activity. The STA composite employment index is likewise pointing towards higher jobless claims numbers in the months ahead and falling export orders will continue to impact corporate profitability and their need to increase employment.”