“Prediction is very difficult, especially about the future.” – Niels Bohr Forecasting economic trends is difficult especially trying to predict the performance of equity markets relative to the economic trend. For example, the relationship between equity returns and economic growth for a given country is tenuous at best. To put it another way, just because a country’s …

Continue reading ‘Forecasting Economic Trends and Industry Trends is Futile’ »

One of the annual rituals that American taxpayers go through around this time of the year is the filing of taxes. So now is a good time to consider investment assets and their tax implications. For equity investors, it is very important to understand the tax consequences of investments since various asset classes are taxed …

Continue reading ‘Ideal Placement Location for Investments: Taxable vs. Non-Taxable Accounts’ »

The U.S. equity market has performed well in recent months especially since the election in November. The S&P 500 is up by over 5.50% year-to-date on price only basis. The solid performance of US stocks has pushed valuations to high levels. When compared to other markets, US valuations look stretched according to a report by …

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Global small cap stocks are attractive now compared to large caps based on valuation, according to an article by David Brett at Schroders. Small caps as measured by the MSCI Small Cap Index has returned three times as much as large caps since March 2001. Small caps returned 317%  including dividends compared with 107% for the MSCI …

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Listed companies can implement reverse stock splits for many reasons. For example, they can consolidate the number of stocks outstanding in order to bring the stock price above a certain point like $1 after the price falls below that level. This is necessary for liquidity, preventing de-listing by exchanges, etc. Investors should be very careful of …

Continue reading ‘Reverse Stock Splits Never Work Especially When A Company Is Losing Money’ »