Monday, September 11, 2017

This market has surprising bullish strength

The Bull Market continues....

"The global bull market can absorb the seriousness of Hurricanes Harvey and Irma; it can absorb the continued threats from North Korea; it can absorb the threats to the very veracity of the European Union as the citizens of Catalonia are prepared to separate in a quiet civil “war” from the rest of Spain. It absorbs the high valuations to which share prices have advanced relative to book value; P/e multiples are high and rising; price:book value ratios are as extended as we’ve seen them since the late 90’s and the early first years of this century.

Government borrowing ratios compared to GDP estimates are historically wide; wage pressures are being felt everywhere and margin usage is egregiously extended… and yet prices move higher.

So, we are left with the singular notion that this does indeed remain a bull market, but risking abject, disdainful redundancy, we shall again iterate that we are to err bullishly of equities in global terms but we needn’t be… nor should we be… aggressively so. Modestly long; tenuously long; deer-in-the-headlights fearfully long…. That’s what we are or should be as of the moment and that’s all we shall advocate."

Thursday, September 7, 2017

Gasoline prices have surprised to the upside

You have refineries that are being closed and not going to be open for a few days. If you had asked me a week and half ago if this would have been a disastrous hurricane, I would have thought no.

The fact that it stayed, continued, blew up and stayed for four or five days, this could be weeks, perhaps even months before we return to any sense of normalcy. You could have gasoline prices 25 to 35 cents higher for retail in a very short span of time. 

So this is hurricane season. Hurricane season hits peak September 15. Let's hope that we can get through September 15.

Monday, August 28, 2017

Crude Oil prices declining due to Hurricane Harvey

"This is going to be a short-term event. Obviously there are going to be repercussions. What has happened, however ... it's put downward pressure on crude oil, which is confusing a lot of people. But when you think about it, the demand for crude is going to decline. At the same time, refiners are going to be curtailed, so you're going to see a shortage of gasoline and distillate. Gasoline futures are strong. Distillate futures are strong. But they're only strong in the very near buys." 

via CNBC

Monday, August 21, 2017

Blockchain is a genius - But Bitcoin has a major problem

"It is a punter's dream. I give them credit for that, but it is something that I will absolutely stay away from, have stayed away from it, didn't understand it to begin with, don't understand it now.

What bothers me is that something that can move 5, 10, 15, 18 percent in the course of the day for what's supposed to be a pricing mechanism. How can you buy a house? How can you buy a car? How can you buy Starbucks with bitcoin when the price is going to fluctuate as [dramatically] as it has? This looks to me, you can take the chart of Bitcoin and apply the Bitcoin chart to the Tulip mania of the 15th century.

My problem with Bitcoin also is originally, the concept behind bitcoin was it was supposed to be a finite number of currencies. That is it would be better than the dollar or euro because those are infinite and they can be created by Central Banks out of air. But the problem is now there 1059 crypto currencies all of which can be increased. There will probably be 2000 crypto currencies. The finite nature of crypto currencies universe has become an infinite nature. We'll walk in one day and this will all have ended. And it will end very badly." - CNBC