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January, 2017

Richard's Thoughts On Bull Markets And Corrections

Richard's Comments

 

The single most difficult concept to get across to investors (and I say this after many years of writing about it) is the concept of the great primary trend of the market.

 

A primary trend, bull or bear, once set in motion, does not reverse until it is EXHAUSTED. A bull market such as this one, for example, will not top out until the bull forces have totally spent themselves.

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Davos and Trump

by Benjamin J. Butler

If we’re in one of those periods now, if 2016 is like 1932 or 1979 — then you not only have to change your portfolio, you have to change your lifestyle. That’s one of the things we’ve been telling clients. If this is a major shift to populism, nationalism, greater state involvement, and less globalism, then you really have to rethink almost everything in your life.

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A Pause in the Action

By Jon S. Strebler

 

US markets continue to revolve, at least to some degree, around the things that President-elect Trump says and does. Almost every day brings something new and shocking, things that might roil markets but for the most part haven’t. With the inauguration just a couple of days away, people are wondering if it’s going to stay this way, or if things will calm down and Trump will act in more predictable and presidential ways once in office. Time will tell.

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Secular Shift in Interest Rates?

By Matthew Kerkhoff

 

When the cost of money changes, everything changes. Interest rates affect every aspect of the financial universe.

 

At the global level, they impact currency and trade flows between nations. At the national level, they affect the discounted value of future cash flows, the market’s multiple, and the desirability of items such as real estate and debt. And at the micro level, they impact the financing and investment decisions of all individuals and small businesses.

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Richard’s Thoughts on the Strong Dollar

Richard’s Comments

 

If you're a fan of the US dollar, maybe this is "happy time." Larry Kudlow on CNBC keeps shouting that we need a "strong dollar" and that "a strong dollar will set stocks heading higher."  Kudlow may finally be getting his long-awaited strong dollar, but we'll just have to wait to see whether he gets his rising stocks as well.

 

A strong dollar should also be good for bonds, but bonds have more to worry about than just the dollar.  They have inflation to worry about plus the possibility that the economy may be turning up.

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The Eve of a New World

By Benjamin J. Butler

 

Some pretty dramatic statements are being said by people around the world at this time as we move into 2017. The end of Western civilization, some say.

 

A Financial Times journalist wrote:

It is not true that humanity cannot learn from history. It can and, in the case of the lessons of the dark period between 1914 and 1945, the west did. But it seems to have forgotten those lessons.

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