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Posts Tagged ‘leverage’

Blessed Are Municipals

April 11th, 2016 by Kurt L. Smith

Rare is my newsletter with good things to say.  How about “it is good to be an investor in municipal bonds!”  As I wrote several months back, municipals were one of the top performing sectors last year.  Now we are going to discover how long the ride may be.

I am not recanting my position that Bonds peaked in price (bottomed in yield) way back in 2012.  I stand by my position.  But after a quick swoon in 2013, municipal bond prices have been rising and have remained quite firm (low volatility) as they have made their way back towards the highs of 2012.

Low volatility and rising prices…in this market!?  This is certainly a recipe for those not familiar with municipal bonds to get acquainted.  Municipals appear to be a bright spot, not only in the fixed income markets, but in investing in general. (more…)

Another Step Closer

March 3rd, 2016 by Kurt L. Smith

Markets go up and markets go down.  We all know this.  We should also know that we are fortunate to live in an era in which markets have trended higher for decades.  Unfortunately we now live in an age of asset bubbles with the largest bubbles of all, Stocks and Bonds, on the verge of a massive popping.

We have watched the popping of two asset bubbles over the past several years: According to Bloomberg, Precious Metals (Gold & Silver) and Oil.  Gold peaked in September 2011 at $1920 an ounce, falling 45% over the following four years to a $1046 low.  Silver almost touched $50 an ounce for the second time in its history and sold off to below $14.  Oil peaked at $147 in 2008 but sold at $107 just nineteen months ago and below $27 last month.  Markets do go up and down, but in today’s age of asset bubbles, one must be ever mindful of the tremendous downside risks that exist. (more…)

The Great Wait May Be Over

February 11th, 2014 by Kurt L. Smith

The optimism, the good news, the earnings reports and everything else wonderful has culminated in the beautiful rise in stock prices.  Climbing the Wall of Worry?  There is no worry as this one way freight train moves only in one direction smashing all the remaining bears with it. (more…)

Any Further Than I Can Throw Them

January 30th, 2014 by Kurt L. Smith

Crippling debt is not a problem for companies, governments, municipalities or even individuals until the day it is a problem.  The power of greater leverage can be downright amazing and spectacular.  But when it comes to your money I no longer believe the risks associated with leveraged issuers are worth the reward. (more…)

High Prices Be Damned

December 20th, 2013 by Kurt L. Smith

For some things in life, the price is the price.  You must pay it because you have to or you need to pay it.  With one son in college and another on his way next year, I know all about prices one must pay.  Some people look at investing the same way: the cost is the price one must pay. (more…)

NEWS FEED

The $247 trillion global debt bomb washingtonpost.com/opinions/the-2…