Overview: My first job on the “buy side” was in risk arbitrage. That’s a fancy name for investing based primarily on capturing the difference between the current price of a stock, and the value shareholders are due to receive in a merger or acquisition. At that time, there were a lot of announced deals, a … Read more
We’ve been critical of the Federal Reserve’s zero interest rate policy which has gone on far too long combined with its $9 trillion balance sheet so many times that it’s not worth putting links here. A quick check of the DKI blog will show it’s been a topic of interest. Today, the Wall Street Journal … Read more
Last week, we put out a piece explaining that foreign exchange traders see the US dollar as being strong and that American consumers are experiencing higher prices (meaning a weaker dollar). Today, the Wall Street Journal published a piece titled “Surging Dollar Raises Possibility of Parity With Euro” explaining that the dollar is strengthening against … Read more
An article about poor earnings reports from retail companies in today’s Wall Street Journal noted, “The results are prompting Wall Street to wrestle anew with the idea that the global economy could be headed for a recession.” We warned about stagflation in February. We said clearly in May that stagflation is here. And we most … Read more
Yesterday, we got the same question from an existing client and a prospective client. They both wanted to know if we were taking off our market short. We’ve been publicly short the S&P 500 (ticker: SPY) and the NASDAQ (ticker: QQQ) since the first week of January. It’s been our most profitable position this year … Read more
Want to know what oil stocks we’re buying and why? This video explains it all:
Overview: Today the US Bureau of Labor Statistics released the April Consumer Price Index (CPI) of 8.3%. This is above expectations of 8.1% and below last month’s 8.5%. Let’s discuss what this means. First, as we pointed out in this post, the CPI doesn’t reflect objective reality. It’s a number made up by the government … Read more
Introduction: We’ve been writing about inflation and the destruction of value in the US Dollar since November last year. However, when we talk to other market professionals, they comment on the strength of the Dollar. How is this possible? Can we have a strong Dollar and a weak Dollar at the same time? Who’s right … Read more
Just posted a lengthy description on inflation on Twitter and thought I’d copy it here so it’s easier for you to find: Last night a client asked me if inflation has peaked. Great question. I think no, but let’s start on the other side. Used auto prices up 40% last year were a huge contributor … Read more
