The Biggest Iceberg Of Unrecognized Risk

It’s a ship-killer. While we obsess about the stock market, an even-bigger financial challenge is possibly looming in the future. Yet few people are paying attention. Debt has once again risen to outlandish proportions. Especially, state-driven debt and pension obligations may have reached a level which is impossible to pay back. Read more about yet another state’s financial struggle here. Why don’t we clearly know if these massive commitments are fundable? Because we don’t know...

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Legendary Investor Jim Rogers Predicts A Stock Market Crash, And The World Yawns

Legendary investor Jim Rodgers has often been right, and often been wrong, about the future of U.S. financial markets. He’s completely bullish on the future of Asia, and in fact now lives officially in Singapore. Now he’s calling for the worst stock market crash in our lifetime. Read more here. He may be right. Or not. It’s worth noting that when the stock markets first began flashing indications of overvaluation, they were at about half...

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An even bigger bubble?

So I’m reading this morning that Snapchat, after yesterday’s booming IPO, is larger financially than American Airlines, CBS, and host of other established businesses. This is the moment when clients call me and tell me that they want to go all-in on the stock market. They may be right. But according to this chart, we are in a bigger bubble than 2000. And that ended so well….not.

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Esteemed contrarian investor David Dreman has a warning about bonds.

David Dreman has earned a reputation as a superb contrarian investor over the past four decades. So when he writes a warning about bond investing, it’s worth reading. On the other hand, market support by central banks has been so extreme in recent years that rational investing expectations aren’t necessarily valid. The point of the article is solid, however: bonds are potentially at risk. Read here.

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I’m not leaping back into oil…yet

Today’s OPEC agreement to limit production doesn’t have me racing to get back into oil. Historically, oil output agreements by OPEC have tended to fall apart. So we’re still hunting for value. If the energy sector begins to appear attractive we’ll be all over it, if our core mutual funds haven’t bought in. Read more here.

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Let’s enjoy the ride…but remain a bit cautious.

While the stock markets are piling on gain after gain, this article is a decent yet extremely sobering read. There is ample reason to be a gentle skeptic about the current directions of our financial markets. On the other hand, there’s no compelling reason to go to cash either. The “Sweet Spot” of non-delusional investing seems to be a path of profound diversification and patience.

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The Dow opened at 19,000 this morning!

This morning the Dow opened at 19,000 for the first time ever. We are experiencing another lesson in the short run unpredictability of markets. Aren’t we glad we didn’t sell everything in the face of political uncertainty? Now for the ten million dollar question: will these high levels last? My thought: we don’t know. Stay diversified! Read more here.

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Pension defaults will probably be BIG in about 20 years. Possible solution: get your own money into a separate account.

If you read this LA Times article, you will find additional confirmation that we face looming social unrest and political challenges concerning underfunded defined benefit pensions. It is quite possible that in a few decades we will witness pooled defined benefit pensions experiencing a “renegotiation” of benefits. For that reason, maintaining our own pensions in separate accounts such as IRA rollovers becomes even more attractive. We can’t really foretell the future, but right now the...

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