In the grand scheme of things, a small, upward blip in the yield of the U.S. ten-year Treasury bond should be of little concern to equity investors. But sometimes, when the conditions are ripe, even the tiniest spark can cause a conflagration within a speculative stock market. As readers are aware, interest rates have been trading at historically low levels for some time. The onset of the Coronavirus forced our Federal Reserve Bank to pin them even lower. Essentially, it is why the stock market has been having such a great run. Investors have been conditioned to just assume that,…
Insights & Advice
Tag: Bitcoin
Stocks versus Bitcoin
There was no contest this week. Cryptocurrencies took center stage as the stock market churned, chopped and gave investors a little indigestion. Welcome to the market’s brave new world. It appeared that Bitcoin was the answer to whatever ails you. Higher interest rates, the threat of higher inflation, weaker (or stronger) dollar, no problem, just buy Bitcoin. By the end of this week, the crypto coin had chalked up a 15% gain and was trading above $52,000. Ethereum, Bitcoin’s younger cousin, was also up 10%. None of the financial market’s usual suspects—stocks, bonds, or commodities—could come close to those kinds…
Financial froth infects markets
One sure sign that stocks are getting overdone, is the actions of overconfident investors that bid up stocks in a euphoric frenzy, only to dump them at the first sign of trouble. These behavior patterns normally usher in a corrective stage in the stock market, but exactly when that will occur is anyone’s guess. Investopia’s definition of froth “refers to a market condition where an asset’s price begins to increase beyond its intrinsic value.” Wall Street’s “Reefer Madness” event this week is just such an example. Certain stocks in the Cannabis sector saw their share prices double and then triple…
What, Me Worry?
Dalton — I grew up (if you want to call it that) with Mad Magazine. Alfred E. Neuman was the fictitious cover boy of Mad. Interestingly, Alfred’s image was created before Mad, appearing in early 20th-century advertisements for painless dentistry. It was in the dentistry advertisements that we first learned of Alfred’s motto, “What? Me worry?” A Mad cartoonist named Harvey Kurtzman spotted the ad and pitched using it as the magazine’s mascot, saying that “it was a face that didn’t have a care in the world.” I, Allen Harris, hereby nominate Alfred E. Neuman to be the face of the…
Bitcoin is back
After a three-year hiatus, cryptocurrencies have returned and are attracting the attention of investors. Will this time be any different? Readers may recall the Bitcoin craze that sent the largest digital currency to an all-time high of $20,000 in 2017 and spawned numerous copy-cat cryptos like Ethereum and Litecoin. You may also remember that all of them came crashing back to earth and ignominy where they have languished, unloved, until this year. This week, Bitcoin hit a new, three-year record of $19,857. If that is news to you, there is a reason for that. After the last buying frenzy and…