As we head into the final stretch leading up to the U.S. presidential election, I wanted to throw a thought out there about experience and judgment. I have long been of the view that natural bias toward one or the other has a lot to do with personality type and plays a big role [...]

In a recent post I said that I was selectively scanning for value plays at this level. A reader asked me the legitimate question: “Why would anybody buy anything in this market?” Basically, he was questioning my sanity.
I am entirely sane — my answer to the question is very simple. When you purchase [...]

You have probably heard people bandy about the term pro-cyclical as it has become a key concept for economists as we enter a downturn. The crux of pro-cyclicality is that some things rise with an upswing, but fall with downswings — exacerbating swings in the business cycle. As I will explain, much of [...]

Given the fact that the regulatory authorities in the U.S. and the UK have taken the unusually manipulative step of banning all short sales of financial institutions outright, it bears remembering that all actions have consequences, both intended and unintended.

When the housing mania was in full bloom, many first-time home buyers were understandably panicked about being locked out of home ownership and missing the boat to get onto the property ladder. This was the case in both the UK and in the United States. In the UK, deals were done at upwards of [...]

I am a contrarian by nature. That has its pluses and minuses. As a contrarian, I am constantly thinking to myself, “but, is that really true?” As a result, I often find myself recognizing a trend before it catches on or standing aside as others become enmeshed in bubble-think. Those are pretty good [...]

It’s time to get positive. A good friend of mine from Toronto was telling me today how depressing the drip-drip of bad news regarding the economy, the markets and housing is becoming. The housing bust has been going on for nearly two years and it seems like a drama that has no end. [...]

Last week, I showed two charts on returns on the Dow Jones Industrial Average that had two seemingly contradictory messages. In the first chart measuring 10-year returns, one could clearly see that long-term returns have been declining since 1998, signaling that we are in the midst of a secular bear market. And, from the looks of the chart, those declines in returns are far from over. The chart would have looked much the same had I used 15-year or 20-year returns. This is bearish for equities.

‘Buy and hold’ is a myth that I hope dies an ugly death just like the Efficient Market Hypothesis. When one looks at the numbers, it is as plain as day that the stock market moves in sweeping trends that take decades to unfold.

What has the housing bubble told us about market efficiency, social psychology and economics? Quite a lot, I believe.
In the aftermath of the housing bubble, one thing is for certain: we can throw out the inane “Efficient Market Hypothesis.” It is disturbing that this rubbish has been held to for so long. [...]