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Entries tagged with “long-term”

  • It Is A Different Bug

    It is likely that the coronavirus will continue to be a catylyst or execuse for risk off, which leads to continued yield buying to zero. It is not likely that it will turn out to be the actual financial crisis, but it may be the fuel to carry yields to zero. This is a problem longer term for the profits of banks and the record junk yield that is due 2020-2024. It is a different kind of bug and one that we have never faced in modern global times, it is the zero yield bug that will be the next…
  • It Does Not Hurt

    Exceptional price knowledge does not hurt you to know it and it does not reward you if you don't know it! In all 4/4 cases for 100% since 1932, when this happened statistically ______________________________________________________, the reward and returns for this _______ were this ___! More importantly for long term investors, when this ________________________________________________________________________occurred 13/13 times or 100% of the time since 1896, the returns for this ______ were this ___! Log into PER here.
  • Negative U.S. Yields

    Policy makers are set on devaluing the U.S. dollar and falling yields tie into this premise. When U.S. yields get down to zero and/or negative it is the next financial crisis. In some ways, it may be worse than the 2009 financial crisis. The global financial system and its components revolve around a positive fixed yield for income. This income officially disappears when U.S. positive yields disappear. The global economy and the global players that have negative yields, have been piggybacking on positive U.S. yields to support their systems and capture income. Once these positive yields disappear, the income disappears and it…
  • Coming US Negative Interest Rates Are Problematic!

    The whole global financial system revolves around positive yield! When the U.S. has negative rates it is a game changer for the entire system. All those models that revolve around positive fixed yield will dissapear. The risk from negative yields is unforseen and unknown as new models have to be created. Risk assets will be sold to become liquid for the unforseen. First it will show up in the credit markets and then it will carry over to equity markets. One can argue that the warning signs already exist in the fixed income space. It just becomes the timing within…
  • The Greatest Value Manager Of All Time!

    When it occurs, it will be the next financial crisis! The first negative yielding country was Denmark in 2009. 80%ish of all countries had negative yielding debt at a point in August of this year. There was also roughly 17 trillion in negative yielding debt in August. When the U.S. has negative yielding debt it will disrupt the whole global financial system in the short run.