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In consideration for my talk at Yahoo! headquarters in Sunnyvale, CA a while back, an article I wrote will go on the front page on Tuesday of next week, the peak Web traffic day. 

Like the Financial World article, my goal here is to gently introduce the main concepts of this site to a wider audience.  Again, I am not trying to run all 100 yards on the first play. 

Here’s a sneak peek at it for enrolled members:

Quite often, the start of a quarter is a strong moment for stocks, presumably due to all of the pension and 401k money that flows in as a function of the calendar date.

This one seems to be starting out very weak, which seems just a bit more ominous.  With all the recent weakness, you might think we’d be due for a bounce here.

Not so much.

No, the “QE II” I am referring to is not an ocean liner, but the next putative round of thin-air money printing that will be known as Quantitative Easing II.

I see plenty of signs that might lead a deflation-fearing Central Bank Chairman to begin making plans.

Here are a few of the things that are certainly causing a good degree of worry down at Bernanke Central in the Eccles building.  The Fed, and Bernanke in particular, are avowed ‘deflation fighters’ who are constantly keeping their eyes peeled for anything that might hint at deflationary forces.

It’s important to have a mental filter in place when reading news articles, especially when they seek to explain financial movements.

For example, check out this little ditty in Bloomberg today:

June 18 (Bloomberg) — Gold futures rose to a record $1,263.70 an ounce in New York as Europe’s fiscal woes and dimming prospects for the U.S. economy prompted investors to step up purchases of bullion as an alternative asset.

Well, here we might note that world stock markets are up today for the ninth day in a row and the US stock market is up 4.5% over the past two weeks. Those data points do not jibe well with the concept of “dimming prospects” for the economy.  Plus it’s kind of hard to make the case that a rise in gold should correlate with dimming economic prospects.  One might actually make a better case for the opposite effect.

Instead, I think there’s probably some other reason for gold surging today.  Here are a few other candidates:

Note:  Below is an article that I was asked to submit to Financial World for their July/August issue.  The editor heard me speak at the CSFI gig in London in January.  I am posting this so that you can read it early, but it is not to be distributed outside of this enrolled-member firewall in any way until after publication. 

I chuckle to think that I now get to put such an “off the reservation” message out to a very wide audience of financial professionals.  Enjoy, and let me know if you have any feedback or advice on how to improve it.  (Note that this is just a couple of words shy of the 1,800 word limit so there’s not a lot of room to add more without subtracting).

Best,
Chris

Investing Made Hard

There are enormous structural changes related to oil-based energy and other natural resources that could completely upend everything we think we know about investing and how it works.   In this article I will present the view that a historical shift is upon us.   The prudent investor or financial professional needs to consider the possibility that a period of disappointing financial returns, if not profound disruptions to our ‘way of life,’ will be the new normal for the next several decades.