Operating at the Intersection of Technology and the Capital Markets
Month: February 2023
Could World War III be around the corner? It very well could be. Why? Look no further than the U.S. Dollar. Is the U.S. arming Ukraine simply to piss off Putin? No. Is the U.S. arming Ukraine as a result of lobbying efforts by Government contractors such as Lockheed Martin (LMT) and Northrop Grumman (NOC)? … Continue reading World War III?
Short-term Treasuries look attractive. The 1-month T-Bill offers a 4.67% yield. Beats cash and beats holding an equity index fund or ETF. I'm always a fan of owning Quality companies at an attractive price. However, I don't value equities as most investors do - I don't bucket stocks into "Value" "GARP" and "Growth" buckets. I … Continue reading Short-Term Paper, Quality Names and Gold
GOOGL shares look attractive. 11.4x EV/Operating Cash Flow and an 8% cash flow yield for a quality company that I would rather own versus overvalued Tech stocks like PLTR, COIN and scores of others. If you ask me, GOOG is going to gain share across its Remote Server business (GCP), and its Productivity products (Docs, … Continue reading Google Looks Attractive
I advocated for a 50 BPS increase by the Fed for its February FOMC meeting (it executed a 25 BPS increase). Perhaps the Fed will execute a 50 BPS increase in the Fed Funds rate when the FOMC meets on March 22nd. The current Fed Funds target range is 4.50-4.75%. With prices having accelerated sequentially … Continue reading A 50 BPS Increase In March
The Fed won't be arriving on a white horse to rescue investors anytime soon. The Fed may be finally learning the lesson that inflation is a persistent, long-term problem that lacks a quick remedy. In the absence of easy money, the price of goods, services and assets will eventually find a natural price equilibrium. Fundamentals … Continue reading Now We Will See Who Is Quality
The 3.95% yield on the 10-Year Treasury is too low. The 10-Year Treasury yield assumes we are going back to a 0.00%-1.00% Fed Funds rate. We are not. We have far too much public debt ($31.5 Trillion) to encourage the type of debt issuance we experienced during COVID when the fiscal and monetary sides lost … Continue reading 10-Year Treasury Yield Has Upside
Investors are crazy if they don't believe there is more air to come out of the Everything Bubble. With Infrastructure Software companies like SNOW trading at 22x forward Revenue.. With Analytics Services companies like PLTR trading at 8x forward Revenue and 34x Adj. EBITDA.. With companies like COIN trading at 5x trailing Revenue (who knows … Continue reading The Bubble Still Floats
I recently wrote that I love Google's Pixel phones. Google is offering deals on Pixel phones if consumers are willing to buy the Pixel and use Google Fi as the phone service. I've used Google Fi for several years now and enjoy the service. It is far less expensive than AT&T, Verizon and T-Mobile. I … Continue reading Google Pixel Deals
The Fed essentially did nothing this past week in terms of tightening the money supply. QT hasn't been nearly as aggressive as the Fed's QE efforts - especially when you consider the cumulative effect of QE from 2009-early 2022. This Fed's ideology is not aligned with getting CPI down to 2% as I wrote back … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
I would advise the Fed against pausing QT, but perhaps the central bank will pause QT this summer as part of raising the debt ceiling. By "pause" I mean the following: Congress will lift the debt limit this summer (it is not a question of "if" but "when"). Once the debt limit is lifted, Treasury … Continue reading QT Pause This Summer As Part Of Debt Deal?
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