Saturday, February 18, 2017

MAD Economic Review - President's Day Edition

Many of us have a nice long weekend ahead of us as we celebrate what is actually still considered Washington's Birthday on Monday.  Despite his real birthday falling on the 22nd, it was decided in 1968 to move a lot of national holidays to Monday to encourage more 3 days weekends for the nation's workers.  Nevertheless let's not forget to honor our nations greatest general, and first President that humbly served 2 terms despite widespread clamor for him to run a 3rd time.

While we are at it do take advantage to shop sales at retailers. Of course regular readers will do this in a smart way.  I'm sure no one will be out buying new cars, and will use any savings to invest for the future. Just remember only buy items you ACTUALLY NEED!  For example if you've been in extreme need of a new quality set of cookware and you see nice sets are marked down 25% then by all means purchase them.  Just don't use any sale to buy a portable speaker for your phone, drones, any wearable tech, or other things that just aren't essential right now.  You are of course trying to save for your future early retirement, child's college education, or trying to pay off the house early.  All of which will make you much happier and stress free.

Friday, February 17, 2017

Is Investing In Tech Stocks For Losers?

New technology is fun, it's exciting, and it can sometimes lead to plenty of riches. Unless of course it was 1996 as the buyers of these companies eventually found out. Interestingly the article mentions Yahoo(YHOO) which happens to be the sole survivor from that batch of 90's tech stocks.

Yes investing in tech is seen as cool.  It is after all representative of our progressive future.  But take a look at the performance of these "tech" companies since January 2016.  Here we have Square(SQ), Lending Club(LC), Twitter(TWTR), and Fitbit(FIT).  With the exception of Square(SQ) all have been losers for their early investors. Although owning Square hasn't been as pleasant as the gain alludes.

Friday, February 10, 2017

MAD Economic Review - 2/10/17

I sometimes try and put up a good quote from someone famous, or myself. I'm almost famous I swear 😉.  Nonetheless I couldn't find any I liked, nor could I recall some of the great things I said recently. I know slightly big headed of me, but I do come up with a lot of good slogans/phrases for people and their life finances.  Unfortunately I don't write them down all the time, but if it had anything to do with specific numbers I remember it right off the top of my head. Sigh.

Either way I thought I'd give us a new quote. It's possibly been said before as they say "there is nothing new under the sun."

So here it is:

"When life gives you it's biggest challenges that's when you stand up and tackle them head on" 


We have challenges everyday. Such as not wanting to get up out of bed for work during the winter months, procrastinating on un-enjoyable task's, or the worst offense of not paying attention to your finances.


Of course you can have challenges far greater than that.  Whatever they are just make sure you stand up and tackle them with everything you've got. You'll thank yourself later. 

Economic News

There was light economic news this week, but I'll highlight the JOLTS report and U of M's Consumer Sentiment(Is it football season again yet?).  The JOLTS report showed 5.501 million job openings in the country.  Let's assume employers are willing to pay $25/hr for a 40 hour workweek. That means roughly $286 billion dollars in wages are going un-claimed for the whole year. Go get yours! The JOLTS number has been trending down since April 2016's high of 5.845 million, but I'll be looking to see how it trends the rest of the year.  I still can't believe employers are having such a hard time filling positions. But that's a symptom of structural unemployment which means they can't find qualified/trained candidates. I'll have more on job growth and GDP in a post coming out next week, it's a must read. 

The University of Michigan's Consumer Sentiment Index was released with a reading of 98.5 for January 2017. If you're not aware the last time we saw numbers this high was back in the beginning of 2015, and just before the recession started in 2008.


What's interesting to me is the index has risen 33.4% in 4 years from January 2013(73.8) to January 2017's 98.5. That of course is right after Barack Obama was inaugurated for his last term. That's not as rosy at first glance since generally numbers above 90 are correlated with high confidence, and anything from 50-75 is associated with pessimism. It took 23 months from his inauguration for consumers to feel confident enough about the economy for the Index to break above 90 again after last seeing it in 2007.

 In fact it was only during the last couple years of his Presidency when we witness consumer sentiment over 90(21 months over 90 total).  Or in other words only 21.8% of the time did consumers feel good enough to put them in the upper echelons of economic ecstasy during his two terms.  Not to Monday morning quarterback him as he inherited a woeful economy at the time. But the index shows he didn't do a great job of getting American Citizens excited about their economic well-being. I think that's partially manifesting itself into the protests we see now. A lot of Americans never felt the "recovery", and are just angry at everything. As James Carville said "It's the economy stupid."  

Markets


We saw the equity markets all notch new highs during the week. Yep that's right. Every single index notched a new all time high this week.  The Nasdaq leads all indexes YTD with a 6.5% gain so far this year. So far 71% of companies have reported and it looks like they've registered 4.9% earnings growth. A lot of people are attributing this weeks gains to Trumps remarks about a "phenomenal" new tax plan.  Let's not get to excited. The tax world moves pretty slow.

Speaking of which make sure you file your taxes early to get your refund if you're due it, and to avert any possibility that someone files a return under your name fraudulently before you can. Remember you can still contribute to IRA's for the 2016 tax year, and if you get a refund consider investing it into an IRA. If you don't have one contact us. MAD Consulting can get you setup with a Traditional and Roth IRA for all your tax season refund needs. You can get started with as little as $3k in some cases so contact us to find out what we can do for you!

While Trump may have been good for the index's overall this week, or so they claim, he wasn't good enough for his favorite loud horn - Twitter(TWTR). The company reported earnings and user growth that greatly disappointed investors, and the shares dropped over 16% in two days. Looks like the Donald doesn't boost all things market related.  This earnings report finally got UBS to change it's rating on Twitter from "Neutral" to "Sell". UBS originally had a "Buy" on Twitter from 9/10/14 which was finally changed to "Neutral" in January'17. Uh a little late there UBS as the stock is down 70% from their original "Buy" rating. Oddly enough the company is trading at one of it's cheapest valuations ever

Bonds were slightly uneventful as they saw most of their action last week with the FOMC meeting.  At last glance the 10 year treasury was drifting around 2.41%. Hard to get excited about government bonds when the S&P is still yielding around 2%.

Have a great weekend everyone!

Love,
MAD Consulting

PS. To all my gentleman readers. Don't forget Valentines Day next week.  It marks the 5 year anniversary since my wife and I had our first date. Oh how quickly time flies.

***If you were counting I technically gave 4 tips. The quote, the tax advice, IRA advice, and Valentines advice!


What Do Markets Think About Society?

While you've been focusing on grinding out the last full month of winter, and protesting cause it's the cool thing to do right now, the markets have continued to climb steadily higher all week.  In fact every major index has HIT ALL TIME HIGHS this week!!


YTD Performance:
Nasdaq - Up 6.58%
S&P 500 - Up 3.47%
Dow Jones - Up 2.58%
Russell 2000- Up 2.38%


Stop and think about that for a minute. Despite the fact television is full of people yelling at each other, and street protesters destroying small and large business storefronts all over the country the market could care less. It only cares about one thing - Making Money.  

That's what the markets think about the rest of society. So don't let the TV fool you into thinking otherwise. The proof is in the charts. 



Visit StockCharts.com to see more great charts.

Saturday, February 4, 2017

MAD Economic Review - 2/4/2017

It was a busy week for economic data as we had a FOMC rate decision, Unemployment/NFP, ISM, and earnings from a few big names.  That was all enough to keep the market action interesting for the week. In fact we saw record levels of VOLATILITY!!!  The last time we saw this kind of volatility was back exactly 10 years ago in February 2007.  What does that mean?

Monday, January 30, 2017

Investor's Corner with Michael Distasio - Guru Trading & Investing: Jan 25, 2017

A "Guru" is a large fund manager that's been made famous for their long time out-performance of the market, and well timed trades that have led them to mega riches. Common names seen in the media most often are Warren Buffet, Carl Icahn, George Soros, Leon Cooperman, Bill Ackman and the list goes on.

In my most recent Squawk Radio Investors Corner segment I highlight some information sources you can use, guru's use of the media, and whether or not following these people is a good idea. In just one example you easily see how they don't have your best interests in mind all the time. Specifically George Soros whom in my opinion has been fleecing the American public to amass large profits for himself throughout the decades. He really should be investigated. You'll see why in the video. As I've called out Jeff Gundlach & Dennis Gartman before - George Soros now joins the list of CHUMPS!



This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by MAD Consulting LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. MAD Consulting LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Saturday, January 28, 2017

MAD Economic Review - 1/28/2016

Well I'm back full time!!! Recently returned from my honeymoon with my fantastic wife with some tan lines, great memories, and feeling refreshed!  Traveling really helps you understand the world economy as you get to see first hand globalization at work in multiple places. I've been blessed to be able to travel this world to locales Christopher Columbus, Amergio Vespucci, & Ferdinand Magellan only dreamed of visiting.  They all set out with slightly different goals, but in the end their main quest was to increase trade.   It goes even further back than the Silk Road. That's always been human civilizations goal - increased trade & prosperity.

This week I did another Investor's Corner segment on Topstep Traders Squawk Radio with Eddie Horn, which I've recently found out is also very talented at multiple instruments including the piano. This week I highlighted some of the effects big money players such as Soros and Buffet use their influence through the media & other means.  I highly suggest you check it out. It might show you they don't always have your best interest in mind when they spew out comments on TV or social media. For further reading check out my review of Gundlach & Gartman.

This week also saw the Dow eclipse the 20k mark.  While it sounds cool, in reality it's not much of a big deal.  As the index head's higher each new whole number becomes less important on a percentage basis.  For example to reach 25k the index only needs to advance another  25%. That sounds impressive, but when you consider the Dow was up 15% in 2016 you realize this can easily happen in the next year or two.

As a matter of fact every index hit a new high this week. The Nasdaq paced the pack with a 1.9% gain for the week. It seems the #TrumpRally is alive and well so far.  From my perch some charts are starting to look overbought so it might not be out of the question for the indexes to take a breather soon and consolidate some of these impressive gains.  That's just a natural progression for the market.


Index                  YTD % Change
Dow -                         1.7%
S&P 500 -                  2.5%
Nasdaq -                     5.2%
Russell 2000 -            1.0%

Visit StockCharts.com to see more great charts.



Economic Reports

We had a handful of important economic published this week, all of which seemed to get lukewarm responses.  Housing data came in with Existing and New Home Sales.  Neither of which met expectations.

Existing Home Sales - 5.49 million vs 5.55 million expected
New Home Sales - 536k vs 589k expected.

I'd say the miss is partly influenced by the recent rise in mortgage rates. I'll be putting together my semi-annual real estate report in the next few weeks as the remainder of 2016 data gets published.

4th Quarter GDP estimates came out showing the economy grew at a 1.9% clip from October-December 2016. I wouldn't worry about this to much despite it being a weaker number than we'd like.  The market has already passed by that data point and is digesting Q4 earnings from large multi-nationals(34% of companies already reported).  This number will be revised a couple more times so take it with a grain of salt.


For the year I think participants will be more focused on the possibility of another Fed rate hike(currently pegged at 71% chances in June), inflation, and regulation changes coming down from DC with plenty of proposals to simplify the tax code and other compliance procedures.

Tuesday, January 24, 2017

How Are Bonds Performing

There's been a lot of talk about bonds lately and how they are going to perform with the Federal Reserve raising interest rates.  Here is a chart from the last six months depicting 3 bond ETF's VCSH(short duration), VCIT(intermediate duration), and VCLT(long duration) bonds have been performing. Lately we see the short duration VCSH is performing better overall.



Visit StockCharts.com to see more great charts.

Wednesday, January 18, 2017

What Is A Word Worth?

We are definitely in new times when a just a quick tweet or statement can send things spiraling in either direction.  Now for traders this phenomena is old hat for them.  They are well aware of the consequences of new communications technology, and reaction times.  However for long term investors, and casual followers many are probably not aware of how quickly our markets respond to news, or ahem, tweets & posts. I'll use two recent examples to highlight this.

Monday, January 16, 2017

Dr. King: Nonviolence is the Most Powerful Weapon

I had the honor of visiting Dr. Martin Luther Kings home and historic site in Atlanta a few months back. It was quite a learning experience. For one his family was highly educated, and included a degree holding grandmother. In case you aren't aware that was a rarity, and even rarer for an African-American woman during her generation. Also Dr. King was a humble man, and at one point did not want to buy a house because he was afraid people would think it showed he was profiting from the movement he was a big part of. That's the type of humble thinking absent from many civil leaders toady.

Nonetheless his message in this video is something I feel gets lost on people. I think we forget in every generation the truth to this message. Nonviolence IS the most powerful weapon.




Tuesday, January 10, 2017

Small Business Optimism Soars

Unfortunately a lot of people don't like admitting it, but it looks like there is even more proof that Donald Trump is going to be good for the economy and he hasn't even been inaugurated.  A good economy is good for everyone so people should be happy!

Bloomberg reported the National Federation of Independent Business's Index soared to its highest level since 2004, and posted the highest monthly gain since 1980. The index has posted strong gains in November and December of 2016.   


Here are some excerpts, and it may be time for me to put together another "The Always Small Business" article. 


"Optimism among America’s small businesses soared in December by the most since 1980 as expectations about the economy’s prospects improved dramatically in the aftermath of the presidential election."

"The National Federation of Independent Business’s index jumped 7.4 points last month to 105.8, the highest since the end of 2004, from 98.4. While seven of the 10 components increased in December, 73 percent of the monthly advance was due to more upbeat views about the outlook for sales and the economy, the Washington-based group said."


“We haven’t seen numbers like this in a long time,” Juanita Duggan, president and chief executive of the NFIB, said in a statement. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy. Business owners are feeling better about taking risks and making investments.”

Resolution Ideas for 2017

Well it's 2017 and we all know what that means. We set our resolutions as we enter the new year with zest and zeal as we look towards a clean slate.  Not every year goes as planned. Sometimes it ends up better than you expected, and in some cases worse. I can guarantee that if you follow all of the resolutions below you are one step closer to reaching financial success. 

Here are resolutions for everyone to consider this year. Obviously since we like to talk about investments, and money this will be the overall focus. Without wasting anymore time(one of my resolutions for the year) let's get to it.

Saturday, January 7, 2017

MAD Economic Review 1/7/17

It's a new year and time for a new you. If you haven't followed the traditional path of making a resolution for the new year, by all means you're not too late.  Most people focus on doing things like losing 10lbs, or spending more time volunteering. All are worthy goals, but most people never say "This year I vow to get my investments in line", or "I'm going to work on paying off my debt".  Those are seldom heard unfortunately.  If you haven't made a resolution you're in luck as I'll be posting an article next week with great financial resolution ideas for 2017. It might be a tad late, but there's plenty of time still to declare our resolutions for the year.

 Of course a new year also means plenty of people clamoring to tell you what to invest in, and where things are going this year.  By all means I have expectations too.  I am well aware though that those expectations can be wrong, and one must position themselves appropriately to mitigate risk while sticking to a rock solid financial strategy that can weather any storm. But that's how the market works. It's the collective expectations of everyone across the globe voting their opinion(expectations) with their hard earned money.

Thursday, January 5, 2017

Investor's Corner with MAD Consulting: Jan 4, 2016

Check out my latest Investors Corner segment on Topstep Trader's Squawk Radio with Eddie Horn. I reviewed some key markets in 2016, and discussed what to look for in 2017. Also I mentioned some great personal finance reminders for everyone.

Monday, December 26, 2016

Our Terrifying Savings Problem

The relaxing Christmas weekend went by with a lot joy.  A full belly and new gifts within eyesight were a great reminder of how lucky we are to live in this great country.  Then in typical real world fashion I got a nice reality slap in the face. As I browsed this morning for interesting financial articles I came across this right in your face article on GoBankingRates.com.

The headline read "69% of Americans Have Less Than $1K In Savings"

I broke into a panicked sweat after seeing that flash across my screen.  I thought how could this be?  Is it true my fellow Americans are that bad at saving money?

Wednesday, December 14, 2016

Investor's Corner with Michael Distasio: Dec 14 2016

Here is my latest Investors Corner on TST's Squawk Radio. Today we talked a bit about the bond market, and I introduced a new FREE feature for everyone.

 

FOMC Rate Decision - Where's The Big Money Going

With the FOMC Rate Hike Decision coming out at 2pm EST it's just about guaranteed that a hike is inline.  The market has been anticipating this hike for months, and quite frankly the Fed has come out and basically said it's happening. If they do surprise us and don't hike then we can all but be sure the next meeting will feature one.



So where has the big money been going and how can we play this?

Saturday, December 10, 2016

MAD Economic Review - 12/10/16

"We must always learn from history to guide our future" - The MAD Consultant

I've been lucky to have recently traveled down to Georgia. I visited beautiful Savannah, and Atlanta.   I was able to spend quality time with really great friends while I was there too. One of the pleasures of travel.  


Now some people travel to lay on a beach, get drunk in bars, or visit boutique shops. That's fine if it's your thing.  Not here at MAD Consulting.  My wife has the pleasure of joining me on multiple history tours, historic sight visits, and museums. Fortunately she enjoys it too. I just make sure to visit all the animal farms a long the way so she gets what she wants.  I learned a lot on that trip and not just from tour providers, and informational placards.  Learning can also come from friends, and the people you meet.  There is a lot of knowledge out there. We must try to take it all in. 

Wednesday, December 7, 2016

JOLTS Survey Shows Hiring Pace Slows

I'm a big follower of the JOLTS survey released by the Bureau of Labor Statistics. For one I feel it's prone to less shenanigans than the unemployment rate. The last couple years have seen the survey spike to over 5 million plus job openings, and a commensurate level of actual hiring.

However underneath there is a trend that's been accelerating much of this year, and at this point is hard to ignore. The rate at which people are being hired is slowing despite a large number of positions available.  The percentage hiring rate from a year ago dropped -5.4%. That's a pretty big change.

It could mean a lot of things. I think one of the main reasons, but not the only one, is that companies are having a hard time finding qualified workers to fill positions.  The workforce is becoming increasingly technical.


Saturday, November 26, 2016

50% Off Business Service Promotion

As part of Small Business Saturday I'm offering 50% off the first 6 months of my unlimited subscription plan for business owners!  The promotion is applicable to the first 5 claimants so don't delay.

You must claim the promotion through the Contact Page. Note in the subject "Business 50% Promo".

For more information on MAD Consulting's Business Services and Unlimited Plan visit our Business Page

*offer expires 12/31/16 

Friday, November 25, 2016

Free Financial Planning Promotion

I'm running a promotion through the blog, Facebook, and Twitter where the first 5 individuals to respond get 6 months of financial planning absolutely free!

This is better than any Black Friday deal you'll find, and no need to stand outside in the cold to get it! 

This deal allows you to save money and make more money. Share it with anyone you think might be interested that will benefit from this life changing service.


To claim this you must send me an email through the Contact Page.  

*Excludes Real Estate Analysis, Must set up an initial in person or phone consultation by December 31, 2016.

Tuesday, November 22, 2016

US Dollar and S&P 500 Correlation

Generally it's assumed that a falling dollar is good for equities since that trend has worked in the past.  Lately however we see that old assumption isn't working out the way we think it should.

Notice that lately, especially since the election, the US Dollar and S&P 500 have moved in near lockstep with each other.  Their moves are such replicas you'd swear they are the worlds best tango dancers.   So let's look at some historical charts below.