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Don’t Jump Into MLPs With Tepper Just Yet

Range-bound markets over the past year have made it difficult to earn good returns. Most investors haven’t made any money at all. And this reality has forced them to pile into high-yield products to make up the difference. One popular area to reach for yield has been the energy space. The general belief is that crude has hit a bottom and that energy companies are now a safe bet. Especially with the dividends some of them are offering. Billionaire hedge fund manager David Tepper is all over this theme. His interests lie specifically in Energy Transfer Partners (ETP) and Williams […]

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Aramco: Don’t Take the Bait!

Saudi Arabia has a problem. The country’s wealth is completely dependent on oil revenue, which state officials use to bribe the population into submission. But with the price of oil hovering in the mid-$ 40s, after falling from over $ 100 in recent years, the Saudis have been dipping into their national piggy bank to make good on their social promises. They need oil prices over $ 60 to balance their budget, but that might not be in the cards anytime soon. Looking at a future full of American fracking, country officials decided they needed to change course. So, they […]

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Here’s Why Investors Don’t Trust Anyone in Power

Don’t lie, cheat, or steal. Those seem like pretty good rules to live by. Most of us learned these values as children. We watched our parents and, when we strayed from the straight and narrow, suffered through a variety of consequences. The message doesn’t get through to everyone, of course, so we still need prisons for criminals. But there’s a group of people who exist in the gray area, that shadowy space between upstanding citizens and outright thieves. They know the difference between right and wrong, which is clear from their pleas when they’re caught. But it’s all an act. […]

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Think the Market Will Reach a New High? Here’s Why We Don’t

Stocks are once again rallying after another “mini crash” at the start of the year. We’ve had three of these things since October 2014 without much to show for it. As Adam warned Boom & Bust readers earlier this week, stocks have basically gone nowhere for a year and a half. After the first crash in late 2014, stocks were able to eke out a new high into May of last year. But since then, stocks have failed to make new highs despite strong attempts like this one. Ten months without a new high. That’s only happened at 11 other […]

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If You Don’t Warn The People, Their Blood Could Be On Your Hands

Why are so few voices warning the people about what is coming?  We stand at the door of a period of distress that will be unlike anything that any of us have ever known before.  And even though the signs are all around us, very few individuals appear to be willing to stand up and sound the alarm.  Instead, there seems to be a large number of people that are quite eager to criticize the watchmen.  Earlier today, I was having a conversation with a very prominent voice in the alternative media, and we were reflecting on this.  There are […]

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Don’t blame the boomers

From Joe Sarling’s blog comes this a lovely chart showing housing affordability by cohort since 1955: As can be seen, the current generation of young people – Generation Y – faces paying a far higher proportion of their incomes in mortgages or rent than any previous cohort. This does not, of course, take into account the considerable price difference between London and everywhere else: if London were excluded, I suspect their position would not look quite so dire. Nonetheless, this chart is distinctly worrying. Such a high proportion of income spent on housing costs is not remotely sustainable. But that […]

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Gold Bugs: Don’t Get Too Excited

After looking dull for years, gold is finally sparkling again. With the market in convulsions, and Fed Chair Janet Yellen broaching the possibility of negative interest rates, the yellow metal is up over 14% in the few short weeks of 2016. Hey, I get it. People are scared. And justifiably so. Frankly, I’m a little scared about where all of this is going. But before you run out and fill up the trunk of your car with precious metals (and maybe some canned goods and ammo), let’s look at gold with a cold, analytical eye. Gold isn’t so much an […]

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Don’t forget about “Earnings” in the Price/Earnings Ratio

It’s ugly out there. While the U.S. stock market may be closed in honor of Dr. King, overseas markets and the commodities markets are still trading – and dropping – like rocks. The price of crude oil dropped to a 13-year low this morning… which probably means more pain tomorrow when the U.S. markets open. After the tumble stocks have taken this month, we’re already hearing a growing chorus of market pundits saying that the market is “cheap.” Well, it’s cheaper than it was a month ago, that’s for sure. But anyone claiming the market is cheap isn’t telling the […]

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2016: You Don’t Want to Buy and Hold This Market!

This year has been called “the year nothing worked.” Stocks, bonds, commodities… emerging markets… real estate investment trusts… pipelines… cash… nothing generated much in the way of returns in 2015. Many active traders, of course, had a good year, and investors that stuck with a handful of high-octane momentum stocks actually did really well. But in looking at asset classes in general, 2015 was a blasé year for investors. Well, I have good news and bad news. The good news is that there are pockets of value out there. As I’ve written recently in Boom & Bust, many closed-end bond […]

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People Just Don’t Get Demographics

I love reading Barron’s every Saturday morning. It’s part of my weekly ritual, and the subject matter seems to go well with my morning cappuccino. But a few weeks ago, I read an article so fundamentally misguided, it ruined an otherwise perfectly good brew (see “Pretenders to the Presidency” from the November 30 issue). It was so bad, I actually tore it out and left it on my desk for a few weeks to let it settle. But I’m finally ready to tear it to shreds. The piece, which essentially summarized a paper co-written by a London School of Economics […]

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