Blog Posts

This is Part III of an ongoing series on how to trade emerging markets. Emerging markets are of increasing interest to many traders and investors as interest rates in developed markets are at zero (or in some cases below zero) with the yield on longer-duration, riskier assets heading down toward those yields as well. In […]

In trading and investing, you’re putting up a lump sum in the expectation that it will produce a stream of income in the future whether through the price movement (especially from a “trading” perspective) or through the cash that it throws off (particularly with respect to “investing”). For it to be enduring over the long-run, […]

In Part I, we covered the early cycle associated emerging market economies. Investors are increasingly interested in emerging markets because of the higher prospective returns associated with them. While interest rates on cash and bonds are virtually zero across the main developed markets – US, developed Europe, and Japan – the prospect of higher returns […]

This article is the first in a series of how to trade emerging markets. It covers the common characteristics of how emerging markets progress financially and economically. For those who do trade actively and especially those who trade over longer time horizons, understanding what part of the cycle you’re in is important. In our last […]

In a recession, the US dollar typically rises. If we look at a chart of DXY (US dollar index), we can see a rise in 2008 due to the subprime crisis. The 2008 USD appreciation ended once the Fed eased in a material way. We’ve seen a bit of the same dynamic in 2020. (Source: tradingview.com) […]

Let’s say there’s a company whose fundamental valuation doesn’t support itself and likely will never support itself. In that case, you might want to short sell (“short”) the company’s stock. However, given the “markets can remain irrational longer than you can stay solvent” this can be a painful process. Stocks are the most popular asset […]

Developed market countries have very messy financial situations. Because interest rates are already at rock-bottom levels and quantitative easing (asset buying) programs have mostly run their course, pushing money and credit into the system to relieve debt burdens requires tertiary forms of monetary policy. Accordingly, this is leading to concepts of how to pay for […]

This article was published on June 17, 2020 The fundamental value of a financial asset is the amount of cash that can be extracted from it discounted back to the present. When you buy a financial asset you’re putting up a lump sum payment for a series of future cash flows. So, any question of […]

Every now and then, you hear of a high-profile business that either fails or “flops” in the sense of losing a massive portion of its value. WeWork flopped for various reasons, including: an inflated valuation that couldn’t be supported through the financial reality of the business a workable but flawed business model sloppy governance mismanaged […]

This article was published on June 8, 2020 In US cities and other parts of the world, a series of protests, riots, and social conflict have broken out over the death of George Floyd. Unrest over racial tensions and/or police brutality – followed by attempts to restore order – is a pattern that’s occurred many […]