Tag Archives: interest rates

Events and conditions do not make investors behave in any particular way that can be identified as shown in this analysis of the supposed relationship between interest rates and stock prices. So much for the popular claim that "Interest rates drive stock prices"!

Most of the hundreds of financial articles posted every week are just "financial entertainment" - unfounded forecasts, fear mongering or cheerleading. That being said, there are a number of articles that are absolutely MUST READS if you want to become an informed investor and be in position to understand what is evolving in the financial environment and be in a position act accordingly. Here they are.

The Fed's buying of U.S. Treasuries by creating currency (paper money) out of thin air is inflationary (either now or long term) and those that do not accept this premise are, with all due respect, daft, and is sure to result in a momentous growth in the value of hard assets such as gold and silver. Here's why.

Our "Barnyard" analysis from a year ago resulted in 6 out of 8 points indicating that the market would be favorable over the next 6-18 months. That has come true, with the S&P 500 up nearly 20% since then. We expect many will be surprised by the latest Barnyard Forecast which we present below.

In our view, the four primary drivers of market valuations are earnings, dividends, interest rates and inflation, of which two stand out above the others as being the most important. We look at each factor and then conclude with what it means for stocks.

History strongly suggests that, rather than a return to a nice, placid world of “normal” interest rates, we are likely to see a continuation of the borrowing binge/asset bubble until real rates spike as a result of either soaring nominal rates soar or plummeting inflation. Here's why that is the case.

Most of the hundreds of financial articles posted every week are just "financial entertainment" - unfounded forecasts, fear mongering or cheer-leading. That being said, there are a number of articles that are absolutely MUST READS if you want to become an informed investor and be in position to understand what is evolving in the financial environment and be in a position act accordingly. Here they are.

I read hundreds of financial articles every week and most are nothing more than "financial entertainment" - unfounded forecasts, fear mongering or cheer-leading. That being said, there are a number of articles that are absolutely MUST READS if you are to become an informed investor and be in position to understand what is evolving in the financial environment and act accordingly. Introductory paragraphs and links to a number of them are provided in this post.

To understand how the stock market behaves it is imperative to realize that the stock market is overwhelmingly influenced by interest rates. It’s difficult to overstate this key fact. Interest rates are the bone and marrow of the stock market. More specifically, the stock market is ruled by long-term and short-term interest rates creating an overriding framework for what drives the market in which different sectors do better or worse at different points in the economic cycle. This article explains the behavior more fully.

Many gold bugs hold out hope that any day now, gold will resume its march upward to $2,000, then $5,000 and then $10,000 per ounce. In answer to the question “How can anyone reasonably calculate what the value of gold is?” I want to put forth in this post a possible model for doing just that. The purpose of the model isn’t to say where gold will go but to look at the underlying factors that drive the price of the precious metal.