Tony is an all-round investment professional with a broad range of credentials, skills, contacts and work experience in Canada, England, the United States and Australia. His career spanning six decades has been in the investment and mining industries as a corporate director, president, executive ...
more Tony is an all-round investment professional with a broad range of credentials, skills, contacts and work experience in Canada, England, the United States and Australia. His career spanning six decades has been in the investment and mining industries as a corporate director, president, executive director, research manager, and money manager as well as being a top-ranked Canadian metals and mining analyst in the 1970s and 1980s. Hailing from Aberdeen, Scotland he now lives in Niagara-on-the Lake in the deep south of Canada where he blogs and publishes on equity markets.
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Latest Comments
Things Are Different Post Lehman, Even If They Shouldn't Be
Dear Gary,
If the banks will do nothing but sit on their $ 2.5 trillion of excess reserves then long rates will fall further pushing up the dividend discount value of the DJII. At some point the banks will have to move either into the real economy or into the equity market.
For more thoughts on this please visit:
http://tonyhayesblog.com/
Kind regards
Tony
A Tale Of Two Crashes
Dear Jeff,
I think that you should look at the amount of the monetary base that is actually at work in the US economy and not the total monetary base. US$2,3 trillion is stashed as excess reserves at the Fed. Thus while hyperinflation may be coming it is unlikely to be soon.
perhaps you would like to read the following and give me a ring.
www.talkmarkets.com/.../negative-interest-rates-are-insane
Rail Week Ending January 16, 2016: Contraction Continues
Can you split out oil shipments? The increase in pipeline shipments in the U.S. over the past year must surely have had an effect. Perhaps the mild weather might have reduced the demand for coal of late.
Fed Moves To Quantitative Contraction, QC Did Anyone Notice?
It certainly looks like it. The next Fed report on the monetary base will be released at 4.30 pm today
Watching Dividends Instead Of Stock Prices
I agree, however one must compare with competing returns in the bond market viz:
www.talkmarkets.com/.../einstein-not-newton-more-helpful-to-understand-equity-markets
Weather Unexpectedly Much Worse Than Economists Previously Thought
Where do these economists live? Do they ever look out of he window or check the weather channel?
Here We Go Again! Buy The DJII
I have no argument with your choice.
Tony
Einstein Not Newton More Helpful To Understand Equity Markets
I do not apportion blame for the amount of debt or QE. I am merely trying to point out the consequences and their impact on the dividend discount value of the DJII that today is in excess of 32,000.
Over the past 35 years the price and the value of the DJII have had a correlation coefficient of 0.83. From this I suggest that price and value will move back into equilibrium and the pressure is on the price to move up.
Market Panic Selling Overdone - "Buy And Take No Prisoners"
Are you bullish yet?
Regards
Tony
Wagging The Dog
I see no reference in your article to the different interest rate environment this year versus last year. Interest rates determine the discount rate at which earnings and dividends should be measured.
Comparing today's 30 year T bond Yield of 3.03% with the 3.62% yield of a year ago, the yield on the S&P 500 is too high at 2.01% relative to the 2.02% of last year.
The rise in the S&P over the past year from 1,760 to 1,946 is attributed to the 11.7% increase in the dividend.
Adding in just the change in the interest rate environment the S&P 500 should be trading at 2,325.
If one argues that interest rates are too low then short the bond market and hedge that by being long the S&P 500 or better still the DJII where the dividend discount VALUE stands at 29,626 versus its closing PRICE on Friday last of 16,805.
Please see my previous posts for more details
Tony Hayes CFA