Posts tagged ‘behavioral finance’
Podcast 3/3/19: Week in Review and Share Buybacks
The Investing Caffeine podcast is designed to wake up your investment brain with weekly overviews of financial markets and other economic-related topics.
Episode 2
Market Review, Stock Ideas, and The Weekly Rant: Share Buybacks
Don’t miss out! Follow us on either SoundCloud or PodBean to get a new episode each week. Or follow our InvestingCaffeine.com blog and watch for new podcast updates each week.
SoundCloud: soundcloud.com/sidoxia
PodBean: sidoxia.podbean.com
Will Santa Leave a Lump of Coal?
As we enter the last month of the year, the holiday season is kicking into full gear, decorations are popping up everywhere, and the burning question arises, “Will Santa Claus bring gifts for stock market investors, or will he leave a lump of coal in their stockings?”
It was a bumpy sleigh ride last month, but we ultimately entered December in a festive mood with joyful monthly gains of +1.7% in the Dow Jones Industrial Average, and +1.8% in the S&P 500. There have been some naughty and nice factors leading to some turbulent but modest gains in 2018. For the first 11 months of the year, the Dow has rejoiced with a +3.3% advance, and the S&P 500 has celebrated a rise of +3.2% – and these results exclude additional dividends of approximately 2%.
Despite the monthly gains, not everything has been sugar plums. President Trump has been repeatedly sparring with the Federal Reserve Chairman, Jerome Powell, treating him more like the Grinch due to his stingy interest rate increases than Santa. As stockholders have contemplated the future path of interest rates, the major stock indexes temporarily slipped into negative territory for the year, until Mr. Powell gave stock and bond investors an early Christmas present last week by signaling interest rates are “just below” the nebulous neutral target. The dovish comment implied we are closer to the end of the economy-slowing rate-hike cycle than we are to the beginning.
Trade has also contributed to the recent spike in stock market volatility, despite the fresh establishment of the trade agreement reached between the U.S., Mexico, and Canada (USMCA – U.S.-Mexico-Canada Agreement), a.k.a., NAFTA 2.0. Despite the positive progress with our Mexican and Canadian neighbors, uncertainty surrounding our country’s trade relations with China has been challenging due to multiple factors including, Chinese theft of American intellectual property, cyber-attacks, forced technology transfer, agricultural trade, and other crucial issues. Fortunately, optimism for a substantive agreement between the world’s two super-powers advanced this weekend at the summit of the Group of 20 nations in Argentina, when a truce was reached to delay an additional $200 billion in tariffs for 90 days, while the two countries further negotiate in an attempt to finalize a comprehensive trade pact.
Source: Financial Times
Economic Tailwinds
Besides positive developments on the interest rate and trade fronts, the economy has benefited from tailwinds in some other important areas, such as the following:
Low Unemployment: The economy keeps adding jobs at a healthy clip with the unemployment rate reaching a 48-year low of 3.7%.
Source: Calculated Risk
Rising Consumer Confidence: Although there was a slight downtick in the November Consumer Confidence reading, you can see the rising long-term, 10-year trend has been on a clear upward trajectory.
Source: Chad Moutray
Solid Economic Growth: As the chart below indicates, the last two quarters of economic growth, measured by GDP (Gross Domestic Product), have been running at multi-year highs. Forecasts for the 4th quarter currently stand at a respectable mid-2% range.
Source: BEA
Uncertain Weather Forecast
Although the majority of economic data may have observers presently singing “Joy to the World,” the uncertain political weather forecast could require Rudolph’s red-nose assistance to navigate the foggy climate. The mid-term elections have created a split Congress with the Republicans holding a majority in the Senate, and the Democrats gaining control of the House of Representatives. As we learned in the last presidential term, gridlock is not necessarily a bad thing (see also, Who Said Gridlock is Bad?). For instance, a lack of government control can place more power in the hands of the private sector. Political ambiguity also surrounds the timing and outcome of Robert Mueller’s Special Counsel investigation into potential Russian interference and collusion, however as I have continually reminded followers, there are more important factors than politics as it relates to the performance of the stock market (see also, Markets Fly as Media Noise Goes By).
From an economic standpoint, some speculative areas have been pricked – for example the decline in FAANG stocks or the burst of the Bitcoin bubble as the price has declined from roughly $19,000 from its peak to roughly $4000 today (see chart below).
Source: Coindesk
On the housing front, unit sales of new and existing homes have not been immune to the rising interest rate policies of the Federal Reserve. Nevertheless, as you can witness below, housing prices remain at all-time record high prices, according to the recent Case-Shiller data.
Source: Calculated Risk
I like to point out to my investors there is never a shortage of things to worry about. Even when the economy is Jingle Bell Rocking, the issues of inflation and Fed policy inevitably begin to creep into investor psyches. While prognosticators and talking heads will continue trying to forecast whether Santa Claus will place presents or coal into investors’ stockings this season, at Sidoxia we understand predictions are a fool’s errand. Regardless of Santa’s generosity (or lack thereof), we continue to find attractive opportunities for our investors, as we look to balance the risk and rewards presented to us during both stable and volatile periods.
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (December 3, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions and certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Will the Halloween Trick Turn into a Holiday Treat?
The interest rate boogeyman came out in October as fears of an overzealous Federal Reserve monetary policy paralyzed investors into thinking rising interest rates could murder the economy into recession. But other ghostly issues frightened the stock market last month as well, including mid-term elections, heightening trade war tensions, a weakening Chinese economy, a fragile European economy (especially Italy), rising oil prices, weakening emerging market economies, anti-Semitism, politically motivated bomb threats, and anxiety over a potential recession after an aged economic expansion embarks on its 10th consecutive year of gains.
This ghoulish short-term backdrop resulted in the Dow Jones Industrial Average suffering a -5.1% drop last month, and the technology-heavy NASDAQ index screamed even lower by -9.2%. The results for the full year 2018 look more constructive – the S&P 500 is up +1.4% and the NASDAQ has climbed +5.8%.
Should the dreadful October result be surprising? Historically speaking, seasonality in the stock market has been quite scary during the month of October, especially if you consider the spooky stock Market Crash of 1929 (-19.7%) , the 1987 Crash (-21.5%), and the bloody collapse during the October 2008 Financial Crisis (-16.8%). There is good news, however. Seasonally, the holiday months of November and December typically tend to treat investors more cheerfully during the so-called “Santa Claus Rally” period. Since 1950 through 2017, the average return for stocks during November has been +1.4% (45 up years and 23 down years). For December, the results are even better at +1.5% (51 up years and 17 down years).
| November (1950-2017) | December (1950-2017) | |||
| Up Years | Down Years | Up Years | Down Years | |
| 2017 2.40% | 2015 -0.02% | 2017 1.08% | 2015 -1.87% | |
| 2016 3.29% | 2011 -0.32% | 2016 1.76% | 2014 -0.33% | |
| 2014 2.45% | 2010 -0.44% | 2013 2.31% | 2007 -0.76% | |
| 2013 2.68% | 2008 -7.48% | 2012 0.70% | 2005 -0.10% | |
| 2012 0.28% | 2007 -4.18% | 2011 0.86% | 2002 -6.03% | |
| 2009 5.74% | 2000 -8.01% | 2010 5.99% | 1996 -2.15% | |
| 2006 1.66% | 1994 -3.93% | 2009 1.48% | 1986 -2.83% | |
| 2005 3.52% | 1993 -1.29% | 2008 1.65% | 1983 -0.87% | |
| 2004 3.86% | 1991 -4.39% | 2006 1.26% | 1981 -3.01% | |
| 2003 0.71% | 1988 -1.89% | 2004 3.25% | 1980 -3.39% | |
| 2002 5.71% | 1987 -8.51% | 2003 5.08% | 1975 -1.15% | |
| 2001 7.52% | 1984 -1.51% | 2001 0.76% | 1974 -1.78% | |
| 1999 1.92% | 1976 -0.78% | 2000 0.41% | 1969 -1.87% | |
| 1998 5.91% | 1974 -5.32% | 1999 5.78% | 1968 -4.16% | |
| 1997 4.46% | 1973 -11.39% | 1998 5.64% | 1966 -0.15% | |
| 1996 7.34% | 1971 -0.25% | 1997 1.57% | 1961 -0.32% | |
| 1995 4.10% | 1969 -3.41% | 1995 1.74% | 1957 -3.31% | |
| 1992 3.03% | 1965 -0.88% | 1994 1.26% | ||
| 1990 6.00% | 1964 -0.52% | 1993 0.98% | ||
| 1989 1.65% | 1963 -1.05% | 1992 1.01% | ||
| 1986 2.15% | 1956 -3.10% | 1991 11.19% | ||
| 1985 6.51% | 1951 -0.95% | 1990 2.48% | ||
| 1983 1.74% | 1950 -0.26% | 1989 2.14% | ||
| 1982 3.60% | 1988 1.48% | |||
| 1981 3.27% | 1987 7.28% | |||
| 1980 10.24% | 1985 4.51% | |||
| 1979 4.26% | 1984 2.24% | |||
| 1978 0.61% | 1982 1.50% | |||
| 1977 2.86% | 1979 1.68% | |||
| 1975 2.47% | 1978 1.16% | |||
| 1972 4.56% | 1977 0.28% | |||
| 1970 4.74% | 1976 5.25% | |||
| 1968 4.80% | 1973 1.79% | |||
| 1967 0.75% | 1972 1.18% | |||
| 1966 0.31% | 1971 8.62% | |||
| 1962 10.16% | 1970 5.68% | |||
| 1961 3.77% | 1967 2.63% | |||
| 1960 2.97% | 1965 0.90% | |||
| 1959 1.52% | 1964 0.39% | |||
| 1958 1.78% | 1963 2.44% | |||
| 1957 3.17% | 1962 1.35% | |||
| 1955 7.64% | 1960 5.08% | |||
| 1954 7.71% | 1959 2.03% | |||
| 1953 0.41% | 1958 4.78% | |||
| 1952 4.31% | 1956 1.50% | |||
| 1955 0.29% | ||||
| 1954 5.85% | ||||
| 1953 0.12% | ||||
| 1952 3.47% | ||||
| 1951 3.62% | ||||
| 1950 3.81% | ||||
While the last 31 days may have been distressing, at Sidoxia we understand that terrifying short-term volatility is a necessary requirement for long-term investors, if you desire the sweet appreciation of long-term gains. Fortunately at Sidoxia our long-term investors have benefited quite handsomely over the last 10 years from our half-glass-full perspective. The name Sidoxia actually is derived from the Greek word for “optimism” (aisiodoxia).
Performance has been fruitful in recent years, but the almost decade-long bull market has not been all smooth sailing (see Series of Unfortunate Events), as you can see from the undulating 10-year chart below (2008-2018). Do you remember the Flash Crash, Debt Ceiling, Greek Crisis, Arab Spring, Crimea, Ebola, Sequestration, and Taper Tantrum, among many other events? Similar to the volatility experienced in recent weeks, all these aforementioned events caused scary downdrafts as well.
The S&P 500 hit a low of 666 in March 2009, but even with the significant fall last month, the stock market has more than quadrupled in value to 2,711 today.
The compounding benefits of long-term investing are quite evident over the last decade when you consider the record profits of the stock market. Compounding benefits apply to individual stocks as well, and Sidoxia and its clients have experienced this first hand through ownership in positions in stocks like Amazon.com Inc. (+2,692% in 10 years), Apple Inc. (+1,324%), and Google (parent Alphabet) (+507%), and many other less-familiar growth companies have allowed our client portfolios and hedge fund to outperform their benchmarks over longer periods of time. Although we are proud of our long-term performance, we have definitely had periods of under performance, and there will come a time in which a more defensive stance will be required. However, panicking is very rarely the best course of action when you are talking about your long-term investment strategy. Staying the course is paramount.
During periods of heightened volatility, like we experienced in October, the importance of owning a broadly diversified portfolio across asset classes (including stocks, bonds, real estate, commodities, emerging markets, growth, value, etc.) is worth noting. Of course an asset allocation should be followed according to a risk tolerance appropriate for your unique circumstances. As financial markets and interest rates gyrate, investors should get in the practice of rebalancing portfolios. For example, at Sidoxia, we are consistently harvesting our gains and opportunistically redeploying those proceeds into unloved areas in which we see better long-term appreciation opportunities. This whole investment process is designed for reducing risk and maximizing returns.
As in some famously scary stock market periods in the past, October turned out to be another frightening month for investors. The good news is that we have seen this scary movie many times in the past, and we have lived to tell the tale. The economy remains strong, corporate profits are at record levels and still rising, consumer and business confidence levels are near all-time highs, and interest rates remain historically low despite the Fed’s gradual interest rate hiking policy. While Halloween has definitely worried many investors, history tells us that previous tricks may turn into holiday treats!
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (November 1, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in AAPL, AMZN, GOOGL, and certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
The Dirty Little Stock Market Secret
Shhhh…don’t tell anyone, I have a dirty little secret. Are you ready? Are you sure? The world is not going to end…really.
Despite lingering trade concerns (see Trump Hits China with Tariffs on $200 Billion in Goods), Elon Musk being sued by the Securities and Exchange Commission (SEC) for tweeting his controversial intentions to take Tesla Inc. (TSLA) private, and Supreme Court nominee, Brett Kavanaugh, facing scandalous sexual assault allegations when he was in high school, life goes on. In the face of these heated headlines, stocks still managed to rise to another record in September (see Another Month, Another Record). For the month, the Dow Jones Industrial Average climbed +1.9% (+7.0% for 2018), the S&P 500 notched a +0.4% gain (+9.0% for 2018), while the hot, tech-laden NASDAQ index cooled modestly by -0.8% after a scorching +17.5% gain for the year.
If the world were indeed in the process of ending and we were looking down into the abyss of another severe recession, we most likely would not see the following tangible and objective facts occurring in our economy.
- New Revamped NAFTA (North American Free Trade Agreement) 2.0 trade deal between the U.S., Mexico, and Canada was finalized (new deal is called United States-Mexico-Canada Agreement).
- Leading Economic Indicators are at a record high (a predictive statistic that historically falls before recessionary periods – in gray)
Source: Yardeni.com
- Unemployment Rate of 3.9% is near a record low
- Small Business Optimism is near record highs
- Consumer Confidence is near record highs
Source: Scott Grannis
- Corporate Profits are at record highs
- Interest Rates remain at historically low levels despite the Federal Reserve’s actions to slowly migrate their interest rate target higher
- Economic Growth (GDP) accelerating to +4.2% growth rate in the recent quarter
Source: Scott Grannis
Are we closer to a recession with the stock market potentially falling 20-30% in value? As I have written on numerous occasions, so-called pundits have been falsely forecasting recessions over the last decade, for as long as this bull market has been alive (see Professional Double-Dip Guesses are “Probably” Wrong).
Why so much investor angst as stock prices continue to chug along to record levels? One reason is investors are used to historically experiencing a recession approximately twice a decade on average, and we have yet to suffer one since the Great Recession around 10 years ago. While the mantra “we are due” for a recession might be a true statement, the fact also remains that this economic recovery has been the slowest since World War II, which logically could argue for a longer expansionary period.
What also holds true is that corporate profits already experienced a significant “profit recession” during this economic cycle, post the 2008-2009 financial crisis. More specifically, S&P 500 operating profits declined for seven consecutive quarters from December 2014 through June 2016. The largest contributors to the 2014-2016 profit recession were collapsing oil and commodity prices, coupled with a rapid appreciation in the value of the U.S. dollar, which made our exports more expensive and squeezed multinational corporation profits. The stock market eventually digested these profit-crimping headwinds and resumed its ascent to record levels, but not before the S&P 500 remained flat to down for about a year and a half (2014-2016).
Doom-and-gloom, in conjunction with toxic politics, continue to reign supreme over the airwaves. If you want in on a beneficial dirty little secret, you and your investments would be best served by ignoring all of the media noise and realizing the world is not going to end any time soon.
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (October 1, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in TSLA or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Another Month, Another Record
The S&P 500 eclipsed the 2,900 level and the NASDAQ jumped over 8,000 this month – both all-new record highs. The Dow Jones Industrial average also temporarily catapulted above 26,000 in August, but remains 2% shy of the January 2018 record highs. For the year, here are what the gains look like thus far:
- S&P 500: +5.3% (2,902)
- NASDAQ: +17.5% (8,110)
- Dow Jones Industrial: +5.0% (25,965)
For months, and even years, I have written how investors have underestimated the strength of this bull market, which has been driven by an incredible earnings growth, low interest rates, reasonable valuations, and a skeptical mass market of investors. As I pointed out in the article, Why the Masses Missed the 10-Year Bull Market, stock ownership has gone down during this massive quadrupling in the bull market. And many investors have missed the fruits of the bull market due to an over-focus on uncertain politics and scary headlines.
Nothing lasts forever, however, so another correction will likely be in the cards, just as we experienced this February when the S&P 500 index temporarily fell -18% from the January peak. But as I have highlighted previously, attempting to forecast or predict a correction is a Fool’s Errand. At Sidoxia we implement a disciplined, systematic process to identify attractive investments through our proprietary S.H.G.R. model (see also Holy Grail) and the four legs of our macroeconomic framework (earnings, interest rates, valuation, and investor sentiment – see Follow the Stool). With stock prices bouncing around near record highs, it is surprising to some that anxiety still remains elevated, primarily due to polarizing politics and an unfounded fear of an imminent recession.
Despite all the hand wringing going on over political headlines, the fact remains the economic tailwinds have “trumped” any political concerns. After a strong Q2 GDP reading of +4.2%, according to numerous economists, Q3 is tracking for another healthy +3% gain. As the Leading & Coincident Indicator chart shows below, there currently is no sign of an imminent recession.
And jobs remain plentiful in part because of Small Business Optimism (see chart below). It’s common knowledge that small businesses generate the vast majority of new jobs, so these optimism levels hovering near 35-year highs augur well for future hiring, job growth, and investment.
The real economy, as measured by the shipment of goods, is trucking along as well (see the truck tonnage chart below).
Source: Scott Grannis
While all the positives above have been highlighted already, in the forefront has been an endless string of doomsday forecasts. Scott Grannis captured this sentiment in a six-year chart created by TradeNavigator.com (click here).
As we enter the tenth year of this bull stock market, politics remain polarizing and skepticism reigns supreme. However, until the storm clouds come rolling in, the economy keeps expanding and prices keep moving higher. If the trend continues, as has been the case in recent years, next month’s title could be the same, “Another Month, Another Record.”
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (September 4, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
S.T.I.N.K. – Deja Vu All Over Again
Yogi Berra is a Baseball Hall of Fame catcher and manager who played 18 out of 19 seasons with the New York Yankees. Besides his incredible baseball skills, Berra was also known for his humorous and witty quotes, which were called “Yogi-isms.” Reportedly, one of Berra’s most famous Yogi-isms occurred after he observed fellow teammates, Mickey Mantle and Roger Maris, continually hitting back-to-back home runs:
“It’s déjà vu all over again.”
The Merriam-Webster dictionary defines déjà vu as “a feeling that one has seen or heard something before.” I experienced the same sense last month as I was bombarded with ominous news headlines. Some of you may recall the panic attack over the PIIGS regions during the 2010 – 2012 timeframe (Solving Europe & Deadbeat Cousin). I’m obviously not referring to the pork product, but rather Portugal, Italy, Ireland, Greece, and Spain, which rocked financial markets due to investor fears that Greece’s fiscal irresponsibility may force the country to leave the eurozone and drag the rest of Europe into financial ruin.
Suffice it to say, the imploding Greece/Europe disaster scenario did not happen. If you fast forward to today, the fear has returned again, however with a different acronym spin. Rather than speak about PIIGS, today the talking heads are fretting over S.T.I.N.K. – Spain, Tariffs, Italy, and North Korea.
*Worth noting, the letter “I” in S.T.I.N.K. could also be sustained or replaced by the word Iran, given the Trump administration’s desire to exit the Iran Nuclear Deal. The move comes despite support by our country’s tight NATO (North Atlantic Treaty Organization) allies who want the U.S. to remain in the agreement.
An overview of S.T.I.N.K. unease is summarized here:
Spain: After a reign of six years, Spain’s Prime Minister Mariano Rajoy is on the verge of being ousted to socialist opposition leader, Pedro Sanchez. Corruption convictions involving former members in Rajoy’s conservative Popular Party only increases the probability that the imminent no-confidence vote in the Spanish parliament will lead to Rajoy’s exit.
Tariffs: President Trump is lifting the temporary steel and aluminum tariff exemptions provided to many of our allies, including Canada, Mexico, and the European Union. Recent breakdowns in trade discussions with allies like Mexico and Canada are likely to make the renegotiation of NAFTA (North American Free Trade Agreement) even more challenging. Handicapping President Trump’s global trade rhetoric can be difficult, especially given the periodic inconsistency in Trump’s actions relative to his words. Time will tell whether Trump’s tough trade talk is merely a negotiating tool designed to gain better trade terms for the U.S., or whether this strategy backfires, and trading partner allies choose to retaliate with tariffs of their own. For example, the EU has threatened to impose import taxes on bourbon; Mexico has warned about levying taxes on American farm products; and Canada is focused on the same steel and aluminum tariffs that Trump has been referencing.
Italy: Pandemonium temporarily set in when Italy’s President Sergio Mattarella essentially vetoed the finance minister selection by Italian Prime Minister Giuseppe Conte. Initially, Italian bond prices plummeted and interest rates spiked as fears of an Italian exit from the euro currency, but after the rejection of the original finance chief, the populist Five Star and League coalition parties agreed to institute a more moderate finance minister and bond prices/rates stabilized.
North Korea: The on-again-off-again denuclearization summit between the U.S. and North Korea may actually take place in Singapore on June 12th. In recent days, Secretary of State Mike Pompeo has held face-to-face meetings with North Korean General Kim Yong Chol in New York. The senior North Korean leader is also planning to hand deliver a letter from Korean leader Kim Jong Un to President Trump in preparation for the nuclear summit. The U.S. is attempting to incentivize North Korea with economic relief in return for North Korea giving up their nuclear capabilities.
Thanks to S.T.I.N.K., volatility has risen, but the downdrafts have been relatively muted as evidenced by the moves in the stock averages this month. More specifically, the S&P 500 index rose +2.2% last month, while the technology-heavy Nasdaq index catapulted +5.3%. Nevertheless, not all indexes are created equally as witnessed by the Dow Jones Industrial Index, which climbed a more muted +1.1% for the month. For the year, the Dow is down -1.2%, while the S&P and Nasdaq indexes are higher by +1.2% and +7.8%, respectively.
Ever since the 2008-2009 financial crisis, observers have incessantly and anxiously waited for the return of a “stinky” economic and/or geopolitical catastrophe that will wreck the American economy. Unfortunately for the pessimists, stock prices have more than quadrupled in value since early-2009. Yogi Berra may have been correct when he said, “It’s déjà vu all over again,” but just like PIIGS concerns failed to cause global economic contagion, STINK concerns are unlikely to cause significant economic damage either. Over the last year, the only “stink” occurring has been the stink of cool, hard cash.
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (June 1, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Why the Masses Missed the 10-Year Bull Market
The investing masses generally are notoriously short-termed focused. Although the overall stock market notched another gain this month, stock values are still down roughly -8% from the January peak, which has caused some investor angst. Despite this nervousness, stock prices have quadrupled and the bull market has entered its 10th year after the March 2009 low (S&P 500: 666). Given this remarkable accomplishment, we can now look back and ask, “Did investors take advantage of this massive advance?” The short answer is “No.” For the most part, the fearful masses missed the decade-long, U.S. bull market. We know this dynamic to be true because data regarding stock ownership has gone down significantly, and hundreds of billions of dollars have been pulled from U.S. equity funds over the duration. For instance, Gallup, the survey and analytics company, annually polls the average percentage of Americans who own stocks and they found ownership has dropped from 62% of Americans in 2008 to 54% in 2017 (see chart below).
Much of the negativity that has dominated investor behavior over the last decade can be explained by important behavioral biases. As I describe in Controlling the Investment Lizard Brain, evolution created an almond-sized tissue in the prefrontal cortex of the brain (amygdala), which controls reasoning. Originally, the amygdala triggered the instinctual survival flight response for lizards to avoid hungry hawks and humans to flee ferocious lions. In today’s modern society, the probability of getting eaten by a lion is infinitesimal, so rather than fretting over a potential lion slaughtering, humans now worry about their finances getting eaten by financial crises, Federal Reserve interest rate hikes, and/or geopolitical risks.
Even with the spectacular +300% appreciation in stock values from early 2009, academic research can help us understand how pessimism can outweigh optimism, even in the wake of a raging bull market. Consider the important risk aversion research conducted by Nobel Prize winner Daniel Kahneman and his partner Amos Tversky (see Pleasure/Pain Principle). Their research pointed out the pain of losses can be twice as painful as the pleasure experienced through gains (see diagram below).
Given this backdrop, how can these gargantuan gains be maintained (or improved upon) when investors are continually draining money out of riskier stocks and pouring cash into more conservative bonds? (see Fund Flows Paradox). There are several major factors that can explain the colossal gains in the face of a stock investor exodus:
- Share Buybacks: While investors might not be buying loads of stocks, corporations have purchased trillions of dollars in stocks since the financial crisis. As you can see from the chart below, the table is set for 2018 to be a record year in share buybacks ($842 billion estimate), thanks to record profits and tax legislation that is making it cheaper for corporations to bring back foreign profits abroad.
Source: Marketwatch
- Mergers & Acquisitions (M&A): Record profits, low interest rates, and high cash levels have led to trillions of dollars in U.S. M&A activity (almost $2 trillion in 2017) – see chart below. Not all of this was funded with cash and debt, but suffice it to say, enormous amounts of equity have been removed from the stock market.
Source: IMAA Institute
- Limited IPOs: Certainly, we have seen a few high-profile, stock deals hit the market in the form of initial public offerings (IPOs) over the last year. Some prominent IPOs over the last year, include Dropbox Inc. (DBX), Spotify Technology (SPOT), and Snap Inc. (SNAP), however this limited supply of new deals is a drop in the bucket. As you can see from the chart below, the number of IPOs is significantly below the 1999-2000 peak and the recent added supply pales in comparison to the latest supply-sucking share buybacks and acquisitions.
Source: Statista
Just as important as these supply related issues are to the stock market, demand related issues are important as well. While individual U.S. investors have been scarred by the 2008-2009 financial crisis, ultimately, over the long run, money does not care about behavioral biases. Money goes where it is treated best. Theoretically, the best treatment could be in U.S. stocks or U.S. bonds, or it could be in pork bellies or the Thai baht currency, among many other asset classes (e.g., real estate, commodities, venture capital, Bitcoin, etc.). Much like a trip to the grocery store, global money flows search for the best deals. If beef prices spike by +30% and chicken prices drop by -20%, guess what? Shoppers will now buy more chicken and less beef. Similarly, when Japanese 10-year bonds are yielding 0.04%, German 10-year bonds 0.56%, and U.K. 10-year bonds 1.42%, then U.S. 10-year Treasuries with a 2.96% yield don’t look so bad.
More importantly, as it relates to stock prices, there has been a mass divergence between the interest rate yields earned on Treasuries and the earnings yield (E/P or the inverse P/E ratio) since this 10-year bull market began (Ed Yardeni has a great chart of this Fed Valuation chart). Stocks, as they are valued today, are effectively providing double the yield of bonds (roughly a 6% yield vs 3% yield, respectively). As long as this phenomenon remains intact over the medium term, stocks could continue to significantly outperform bonds. Eventually a spike in stock prices and/or an earnings decline caused by a recession will lower the earnings yield on stocks, but until then, nervous investors will likely continue to underperform.
What the almost 10-year bull market teaches us is that our behavioral shortcomings can be a drag on performance and stock values, but the economic laws of supply and demand can play an even more significant role in the direction of the stock market. Learning how to control your lizard brain (amygdala), and understand how the pain of losses (risk aversion) can distort decision making processes can help you more clearly see how record profits (see chart below), share buybacks, M&A activity, and limited stock issuance (i.e. IPOs) will impact stock prices. Understanding these lessons will better prepare the masses in navigating through future bull and bear markets.
Source: FACTSET
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (May 1, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in DBX, SPOT, SNAP, or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Tariff, Fed, & Facebook Fears but No Easter Bunny Tears
After an explosive 2017 (+19.4%) and first month of 2018 (+5.6%), the Easter Bunny came out and laid an egg last month (-2.7%). It is normal for financial markets to take a breather, especially after an Energizer Bunny bull market, which is now expanding into its 10th year of cumulative gains (up +296% since the lows of March 2009). Investors, like rabbits, can be skittish when frightened by uncertainty or unexpected events, and over the last two months, that’s exactly what we have seen.
Fears of Tariffs/Trade War: On March 8th, President Trump officially announced his 25% tariffs on steel and 10% on aluminum. The backlash was swift, not only in Washington, but also from international trading partners. In response, Trump and his economic team attempted to diffuse the situation by providing temporary tariff exemptions to allied trading partners, including Canada, Mexico, the European Union, and Australia. Adding fuel to the fire, Trump subsequently announced another $50-$60 billion in tariffs placed on Chinese imports. To place these numbers in context, let’s first understand that the trade value of steel (roughly $300 billion – see chart below), aluminum, and $60 billion in Chinese products represent a small fraction of our country’s $19 trillion economy (Gross Domestic Product). Nevertheless, financial markets sold off swiftly this month in unison with these announcements. The selloff did not necessarily occur because of the narrow scope of these specific announcements, but rather out of fear that this trade skirmish may result in large retaliatory tariffs on American exports, and ultimately these actions could blow up into a full-out trade war and trigger a spate of inflation.
Source: Bloomberg
These trade concerns are valid, but at this point, I am not buying the conspiracy theories quite yet. President Trump has been known to use fiery rhetoric in the past, whether talking about building “The Wall” or threats to defense contractors regarding the pricing of a legacy Air Force One contract. Often, the heated language is solely used as a first foray into more favorable negotiations. President Trump’s tough tariff talk is likely another example of this strategy.
Interest Rate/Inflation Phobia: Beginning in early February, anxiety in the equity markets intensified as interest rates on the benchmark 10-year Treasury note have now risen from a September-low yield of 2.40% to a 2018-high of 2.94%. Since that short-term high this year, rates have moderated to +2.74%. Adding to this month’s worries, Fed Chairman Jerome Powell hiked interest rates on the Federal Funds interest rate target by +0.25% to a range of 1.50% to 1.75%. While the direction of rate increases may be unnerving to some, both the absolute level of interest rates and the level of inflation remain relatively low, historically speaking (see 2008-2018 inflation chart below). Inflation of 1.5% is nowhere near the double digit inflation experienced in the late-1970s and early 1980s .
Source: Dr. Ed’s Blog
It is true that rates on mortgages, car loans, and credit cards might have crept up a little, but from a longer-term perspective rates still remain significantly below historical averages. Even if the Federal Reserve increases their interest rate target range another two to three times in 2018 as currently forecasted, we will still be at below-average levels, which should still invigorate economic growth (all else equal). In car terms, if the current strategy continues, the Fed will be moving from a strategy in which they are flooring the economic pedal to the medal, to a point where they will only be going 10 miles per hour over the speed limit. The strategy is still stimulative, but just not as stimulative as before. At some point, rising interest rates will slow down (or choke off) growth in the economy, but I believe we are still a long way from that happening.
Why am I not worried about runaway interest rates or inflation? For starters, I believe it is very important for investors to remove the myopic blinders, so they can open their eyes to what’s occurring with global interest rate trends. Although, U.S. rates have more than doubled from July 2016 to 2.74%, as long as interest rates in developed markets like Japan, the European Union, and Canada, remain near historically low levels (see chart below), the probabilities of runaway higher interest rates and inflation are unlikely to transpire.
Source: Ed Yardeni
With the Japanese 10-year government bond yielding 0.04% (near-zero percent), the German 10-year bond yielding 0.50%, and the U.K. 10-year bond yielding 1.35%, one of two scenarios is likely to occur: 1) global interest rates rise while U.S. rates decline or remain stable; or 2) U.S. interest rates decline while global rates decline or remain stable. While either scenario is possible, given the lack of rising inflation and the slack in our employment market, I believe scenario #2 is more likely to occur than scenario #1.
Privacy, Politics, and Facebook: A lot has recently been made of the 50 million user profiles that became exposed and potentially exploited for political uses in the 2016 presidential elections. How did this happen, and what was the involvement of Facebook Inc. (FB)? If you have ever logged into an internet website and been given the option to sign in with your Facebook password, then you have been exposed to third-party applications that are likely mining both your personal and Facebook “friend” data. The genesis of this particular situation began when Aleksandr Kogan, a Russian American who worked at the University of Cambridge created a Facebook quiz app that not only collected personal information from approximately 270,000 quiz-takers, but also extracted information from about 50 million Facebook friends of the quiz takers (data scandal explained here).
Mr. Kogan (believed to be in his early 30s) allegedly sold the Facebook data to a company called Cambridge Analytica, which employed Steve Bannon as a vice president. This is the same Steve Bannon who eventually became a senior adviser for the Trump Administration. Facebook has defended itself by blaming Aleksandr Kogan and Cambridge Analytica for violating Facebook’s commercial data sharing policies. Objectively, regardless of the culpability of Kogan, Cambridge Analytica, and/or Facebook, most observers, including Congress, believe that Facebook should have more closely monitored the data collected from third party app providers, and also done more to prevent such large amounts of data to be sold commercially. Now, the CEO (Chief Executive Officer) of Facebook, Mark Zuckerberg, faces an appointment in Washington DC, where he will receive tongue lashings and be raked over the coals, so politicians can better understand the breakdown of this data breach.
It is certainly possible that a large amount of data was compromised for political purposes relating to the 2016 presidential election. There has been some backlash as evidenced by a few high profile users threatening to leave the Facebook platform like actor/comedian Will Ferrell, Tesla CEO Elon Musk, and singer Cher, but since the data scandal was unearthed, there has been little evidence of mass defections. Even considering all the Facebook criticism, the stickiness and growth of Facebook’s 1.4 billion (with a “b”) monthly active users, coupled with the vast targeting capabilities available for a wide swath of advertisers, likely means any negative impact will be short-lived. Even if there are defectors, where will all these renegades go, Instagram? Well, if that were the case, Instagram is owned by Facebook. Snapchat, is another Facebook alternative, however this platform is skewed toward younger demographics, and few people who have invested years of sharing/saving memories on the Facebook cloud, are unlikely to delete these memories and migrate that data to a lesser-known platform.
Financial markets move up and financial markets down. The first quarter of 2018 reminded us that no matter how long a bull market may last, nothing money-related moves in a straight line forever. The fear du jour constantly changes, and last month, investors were fretting over tariffs, the Federal Reserve’s monetary policy, and a Facebook data scandal. Suffice it to say, next month will likely introduce new concerns, but one thing I do not need to worry about is an empty Easter basket. It will take me much longer than a month to work through all the jelly beans, chocolate bunnies, and marshmallow Peeps.
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (April 2, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in FB, AMZN, TSLA, and certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
The Scary Blip
I hated it when my mom reminded me when I was a younger, but now that I’ve survived into middle-aged adulthood, I will give you the same medicine she gave me:
“I told you so.”
As I cautioned in last month’s newsletter, “It’s important for investors to remember this pace of gains cannot be sustainable forever.” I added that there were a whole bunch of scenarios for stock prices to go down or “stock prices could simply go down due to profit-taking.”
And that is exactly what we saw. From the peak achieved in late January, stock prices quickly dropped by -12% at the low in early February, with little-to-no explanation other than a vague blame-game on rising interest rates – the 2018 yield on the 10-Year Treasury Note rose from 2.4% to 2.9%. This explanation holds little water if you take into account interest rates on the 10-Year increased from roughly 1.5% to 3.0% in 2013 (“Taper Tantrum”), yet stock prices still rose +20%. The good news, at least for now, is the stock correction has been contained or mitigated. A significant chunk of the latest double-digit loss has been recovered, resulting in stock prices declining by a more manageable -3.9% for the month. Despite the monthly loss, the subsequent rebound in late February has still left investors with a gain of 1.5% for 2018. Not too shabby, especially considering this modest return comes on the heels of a heroic +19.4% gain in 2017.
As you can see at from the 22-year stock market chart below for the S&P 500, the brief but painful drop was merely a scary blip in the long-term scheme of things.
Whenever the market drops significantly over a short period of time, as it did this month, conspiracy theories usually come out of the woodwork in an attempt to explain the unexplainable. When human behavior is involved, rationalizing a true root cause can be very challenging, to say the least. It is certainly possible that technical factors contributed to the pace and scale of the recent decline, as has been the case in the past. Currently no smoking gun or fat finger has been discovered, however some pundits are arguing the popular usage of leveraged ETFs (Exchange Traded Funds) has contributed to the accelerated downdraft last month. Leveraged ETFs are special, extra-volatile trading funds that will move at amplified degrees – you can think of them as speculative trading vehicles on steroids. The low-cost nature, diversification benefits, and ability for traders to speculate on market swings and sector movements have led to an explosion in ETF assets to an estimated $4.6 trillion.
Regardless of the cause for the market drop, long-term investors have experienced these types of crashes in the past. Do you remember the 2010 Flash Crash (down -17%) or the October 1987 Crash (-23% one-day drop in the Dow Jones Industrial Average index)? Technology, or the lack thereof (circuit breakers), helped contribute to these past crashes. Since 1987, the networking and trading technologies have definitely become much more sophisticated, but so have the traders and their strategies.
Another risk I highlighted last month, which remains true today, is the potential for the new Federal Reserve chief, Jerome Powell, to institute a too aggressive monetary policy. During his recent testimony and answers to Congress, Powell dismissed the risks of an imminent recession. He blamed past recessions on previous Fed Chairmen who over enthusiastically increased interest rate targets too quickly. Powell’s comments should provide comfort to nervous investors. Regardless of short-term inflation fears, common sense dictates Powell will not want to crater the economy and his legacy by slamming the economic brakes via excessive rate hikes early during his Fed chief tenure.
Tax Cuts = Profit Gains
Despite the heightened volatility experienced in February, I remain fairly constructive on the equity investment outlook overall. The recently passed tax legislation (Tax Cuts and Job Act of 2017) has had an undeniably positive impact on corporate profits (see chart below of record profit forecasts – blue line). More specifically, approximately 75% of corporations (S&P 500 companies) have reported better-than-expected results for the past quarter ending December 31st. On an aggregate basis, quarterly profits have also risen an impressive +15% compared to last year. When you marry these stellar earnings results with the latest correction in stock prices, historically this combination of factors has proven to be a positive omen for investors.
Source: Dr. Ed’s Blog
Despite the rosy profit projections and recent economic strength, there is always an endless debate regarding the future direction of the economy and interest rates. This economic cycle is no different. When fundamentals are strong, stories of spiking inflation and overly aggressive interest rate hikes by the Fed rule the media airwaves. On the other hand, when fundamentals deteriorate or slow down, fears of a 2008-2009 financial crisis enter the zeitgeist. The same tug-of-war fundamental debate exists today. The stimulative impacts of tax cuts on corporate profits are undeniable, but investors remain anxious that the negative inflationary side-effects from a potential overheating economy could outweigh the positive economic momentum of a near full-employment economy gaining steam.
Rather than playing Goldilocks with your investment portfolio by trying to figure out whether the short-term stock market is too hot or too cold, you would be better served by focusing on your long-term asset allocation, and low-cost, tax-efficient investment strategy. If you don’t believe me, you should listen to the wealthiest, most successful investor of all-time, Warren Buffett (The Oracle of Omaha), who just published his annual shareholder letter. In his widely followed letter, Buffett stated, “Performance comes, performance goes. Fees never falter.” To emphasize his point, Buffett made a 10-year, $1 million bet for charity with a high-fee hedge fund manager (Protégé Partners). As part of the bet, Buffett claimed an investment in a low-fee S&P 500 index fund would outperform a selection of high-fee, hot-shot hedge fund managers. Unsurprisingly, the low-cost index fund trounced the hedge fund managers. From 2008-2017, Buffett’s index fund averaged +8.5% per year vs. +3.0% for the hedge fund managers.
During scary blips like the one experienced recently, lessons can be learned from successful, long-term billionaire investors like Warren Buffett, but lessons can also be learned from my mother. Do yourself a favor by getting your investment portfolio in order, so my mother won’t have to say, “I told you so.”
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (March 1, 2018). Subscribe on the right side of the page for the complete text.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Glass Moving from Half-Empty to Half-Full
This article is an excerpt from a previously released Sidoxia Capital Management complimentary newsletter (February 1, 2018). Subscribe on the right side of the page for the complete text.
Economic growth accelerated in 2017, the unemployment rate is sitting at a 17-year low, housing prices are up significantly, Consumer Confidence is near the highs of 2000, corporations are doing cartwheels thanks to tax cut legislation, and the stock market has recently set new records. Not a bad start to the year, eh?
Fat Wallets & Stuffed Purses
The strength of the economy, coupled with the optimism of business and consumers, has resulted in a financial boon for Americans, as shown in the chart below. Not only have financial assets and real estate gone up significantly since the 2008-2009 Financial Crisis, but household debt has also remained relatively stable. The combination of these factors have American households sitting on almost $1 trillion in household value, a new record.
Source: Calafia Beach Pundit
As we move ahead through the first month of 2018, the +5.8% gain in the Dow Jones Industrial Average, and the +5.6% advance in the S&P 500 index have further fattened wallets and stuffed the purses of equity investors. On an annual basis, the results only look even better, with the Dow up +32% and the S&P +24%. Given the sharp appreciation in value, casual observers might expect a flood of new investors to pile into stocks and equity mutual funds…not true. Actually, this buying phenomenon has yet to occur. However, it is true investor sentiment has begun shifting to a “glass half-full” perspective due to the vast number of positive economic headlines. Nevertheless, it’s important for investors to remember this pace of gains cannot be sustainable forever.
There is no theoretical limit on the number of potential market moving events. The stock market could temporarily get rattled by another North Korean nuclear test, a terrorist attack, a geopolitical standoff, an inflammatory tweet, an infinite number of other unforeseen events, or stock prices could simply go down due to profit-taking (i.e., investors sell to lock-in gains). Regardless, the economic momentum is palpable and the president did not waste any time at the recent State of the Union address to remind Americans.
Currently, there are limited signs of euphoric stock buying, but there will be a point in time, as in all economic cycles, when investment excesses will overwhelm demand and will therefore lead to a recession. Let’s not forget, an overzealous monetary policy (i.e., too many rate increases), led by a new Federal Reserve chief (Jerome Powell), is another scenario which could slam the breaks on an overheated economy.
Follow the Money
In attempting to read the tea leaves about the future direction of the stock market, we are inspired by the famous quote from the 1976 film All the President’s Men, “Follow the money.” Actions speak louder than words in our book, which is why at Sidoxia Capital Management (www.Sidoxia.com), we track the money buying and selling actions of investors. There is never a shortage of information, and the professionals at the ICI (Investment Company Institute) are kind enough to publish the Weekly Fund Flows data (see chart below), which details the amount of dollars funneling in and out of stock and bond funds. Despite the stock market more than tripling in value, and contrary to common belief, more than -$200 billion has poured out of domestic stock funds and ETFs (Exchange Traded Funds) from 2015 through early 2018.
Source: ICI through 1-17-18
How can this counterintuitive money exodus transpire during a bull market? Quite simply, corporations have been using record piles of cash to buy trillions of dollars in stock through “stock buybacks” and “mergers & acquisitions” activity. All this corporate stock purchase activity has offset the money flowing out of funds, which has helped catapult stock prices higher. History tells us, that before this long-term bull market that started in 2009 ends, flows into U.S. stock mutual funds and ETFs will turn significantly positive after years of hemorrhaging.
Many speculators and traders waste time on a plethora of unreliable sentiment surveys and indicators (e.g., CBOE Volatility Index, AAII Sentiment Survey, Put-Call Ratio, etc), but my 25+ years of investment experience tells me the fund flows data works much better as a longer-term contrarian indicator. To put “contrarian” investing in English, famed billionaire investor, Warren Buffett, summed it up best when he said, “Be fearful when others are greedy and greedy when others are fearful.”
Sharing the Wealth
Speaking of greed, corporations have been greedy capitalists as they have watched profits surge to record levels. Yet many of these greedy corporations have decided to share some of the spoils garnered from the recent tax legislation with rank and file employees. For instance, consider the small sampling of the following large corporations that have decided to pay their employees bonuses:
Overall, even though trillions of savings remain in cash and money is still flowing out of US stock funds, the investment glass is shifting from a glass half-empty perception to a glass half-full impression. A time will come when the masses will believe the glass half-full will turn to a glass over-flowing. I don’t think anyone can predict with any certainty when that time will arrive, but I will continue doing my best to drink as much water as possible before it spills.
Wade W. Slome, CFA, CFP®
Plan. Invest. Prosper.
DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in T, CMCSA, DIS, and certain exchange traded funds (ETFs), but at the time of publishing had no direct position in AAL, BAC, JBLU, LUV, USB, or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.
Investing Caffeine 
