We have recently written a couple of posts about the “exuberance” that has invaded the market since the election. Such is often seen near short- to intermediate-term peaks in markets as investors go “all-in” without a net.
It was on December 5th, 1996, during a televised speech, that Fed Chairman Alan Greenspan stated:
“Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”
It is an interesting point that the U.S. has sustained low rates of inflation combined with monetary and fiscal stimulus, which have lowered risk premiums, leading to an inflation of asset prices.
Kyle Green, President of the Green Mortgage Team joins Mike to explain that while interest rates are incredibly low, the ability to qualify for them is not – especially if you are buying for investment purposes. Find out how he is managing his client applications for maximum acceptance.
In 2020, Warren Buffett has been lying low. Preferring to play his cards close to his chest, he hasn’t revealed much about what he’s been buying and selling. However, once every quarter, he is forced to reveal what he was up to in the quarter before. As it turns out, the “Oracle of Omaha” massively reduced his exposure to Canadian stocks this year.
In the second quarter, Warren Buffett sold out of Restaurant Brands International completely. That move was well publicized, leaving two Canadian stocks in his portfolio. He has trimmed both of those positions throughout the year as well. If this continues, Buffett may be out of Canadian stocks completely by the end of the year. That’s not a great sign for the Canadian economy but — as you’re about to see — there’s a silver lining. CLICK for complete article
Quote of the Week
Question: are things so bad that the head of the central bank feels the need to address bankruptcy concerns?
Look what a minor change in interest rates does to the cost of servicing the federal debt.
As protests against Covid related restrictions grow, we should be asking how do we bring more people on board to support the measures to fight COVID-19.
The “Great Reset” agenda is finally in the news. It’s absurd to call it a conspiracy theory. It’s a global agenda that the federal government is on board with. The question is are you?