#margin debt

Other People’s Money

The stock market is high. What gets a market feelin’ good and oblivious to everything around it is a powerful drug, one that has the ability to cloud judgement like nothing else. The opium of markets is OPM, or Other People’s Money.

Where the stock market should be feeling blue and dealing with the realities of a world unraveling with trade wars and debt, it’s taken another course. It’s decided…

Margin Debt hits historical levels, watch this spread!

CLICK ON CHART TO ENLARGE

This chart from Advisors Perspectives/dshort.com looks at the S&P 500 and margin debt (inverted) over the past 20-years. When the spread was wide back in 2000 & 2007 and started narrowing (investors reducing margin exposure), stocks started to sell off.

This chart updates that the spread is now at historical levels. Should this spread start narrowing quickly, it would…

Consider: Another Good Year For Real Estate…Featuring Michael Douville

Proverbs 14:15 The simple believes everything, but the prudent gives thought to his steps.

Consider these two items to change your investment thoughts: P/E ratios and Margin Debt! The Case Shiller P/E of 15.21 has been the average for years and years. It represents approximately a 6.6% annual total return of the S&P. As of January 8th, 2018, the Case Shiller P/E is 33.34 indicating an extremely…

This “warning sign” just hit another record…

About $530 billion of credit was extended by brokerages to investors in February.

Bears love to point out that this measure, known as NYSE margin debt, is on the rise… and it’s been surging in recent months.

What this means is that investors are using more borrowed money to buy stocks. You can see a chart of margin debt below. At a glance, it looks dangerous...

But focusing on this raw number is a misdirection. It’s a way that folks get trapped into selling… and missing out on major gains.

Margin as a percentage of the value of the S&P 500 has held relatively constant. As a whole, investors are about 2% levered. That’s hardly a frenzy.

For a better example, look at Caterpillar (CAT), a maker of construction and mining equipment. Since last June, Caterpillar has missed revenue estimates twice, reported a decline in earnings per share of 39%, and lowered its projection for the future multiple times.

Meanwhile, investors have decided that Caterpillar’s shares should be worth more money. In June, shares traded at a price-to-earnings ratio of 20 times earnings and 9% of Wall Street analysts ranked shares as a “buy.”

Today, they trade at 30.5 times earnings and 35% of analysts rank it as a “buy.” And that’s despite the company getting raided by the U.S. government over the potential for tax and accounting fraud!

These are the signs of froth we’re seeing in the market.

As I’ve said time and again, I’m still long-term bullish on the market.

But I am getting more skittish about the near-term. One major reason is that the market is simply getting more and more expensive.

More companies are getting bought out, wholesale. Forbes has called it the “incredible shrinking stock market.”

Because investors have fewer places to spread their cash, the Wall Street Journal reports that valuations have swelled… more than three times as large than in 1997, after adjusting for inflation.

The Journal reports that this trend is “putting some of the best investing prospects out of the reach of ordinary Americans.”

Today, if you want to keep earning big income in retirement… and avoid the incredibly high valuations of the major indexes… you must look at “hidden” areas of the market that most investors don’t hear about…

For example, tonight I’m releasing my research on a brand-new opportunity to my Income Intelligence subscribers. There’s still time to join them… and get all the details as soon as they’re published a few hours from now.

It’s my best income opportunity so far in 2017… And it’s the No. 1 way you can earn “partnership status” in a private equity firm that gets the best, biggest, and most exciting deals in the world.

I expect it to send out triple-sized distribution checks early next month… paying three times more than the average stock today.

(NOTE: This is very different from an ordinary dividend, where it’s up to management to decide whether or how much they’re going to pay out. These distributions are built into the legal and tax structure of the company: if there’s profit, you get paid, just like all the other partners.)

If you want in on this deal and the next round of payouts, you must read my briefing. Tonight, I’m detailing how every investor can get access to this “private market.”

The ownership structure is unlike regular stock investing, too. It’s better in almost every way. You’ll get paid essentially the same way as the founder of the company… and “partner” with a Wall Street legend.

I’ve put together a brief presentation on this major opportunity that you can read now. But you must act soon…

Click here to join my subscribers and get first access to this information. (This link does not go to a long video.)

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig and the Retirement Millionaire Daily Research Team April 20, 2017

The Ticking Time Bomb That Will Wipe Out Virtually Every Pension Fund In America

By Michael Snyder

Economic Collapse Blog

April 2, 2017

  The Ticking Time Bomb That Will Wipe Out Virtually Every Pension Fund In America

    Are millions of Americans about to see the big, juicy pensions that they were counting on to fund their golden years go up in flames in the biggest financial disaster in U.S. history? When Bloomberg published an editorial entitled “Pension Crisis Too Big…

Margin Debt as Indicator: Bearish Signals Writes Hulbert

In his MarketWatch column, Mark Hulbert highlights the use of margin debt as a market indicator. Margin debt is the total amount investors borrow to purchase stocks. As Hulbert notes, research by Norman Fosback, former president of the Institute for Econometric Research, concludes that “a good long-term indicator can be created by comparing total margin debt with its 12-month moving average.” If…

Divergencia en margin debt y visión técnica del Ibex

Colaboraciones externas

Recibimos de F.León gráfico donde nos resalta una divergencia curiosa  entre los techos de mercado y el margin debt, y en el segundo de J. Hermoso una visión técnica del Ibex para su meditación.