Chicken Little Buys Gold to Cover Short Position

Chicken Little's definition of an optimist? Someone who thinks we will have an inflationary depression. 

The Chicken Little investment approach is to have a macroeconomic opinion and to invest consistent with that macro view and momentum (click for a longer explanation of Chicken Little's investment approach). Momentum is the idea that assets prices that are in motion, tend to stay in motion. 

Newton's First Law Applies to Markets


The Nightmare of Low Interest Rates Continues

Interest rates on US treasury bonds continue to decline. Contrary to conventional wisdom, low interest rates hurt the economy. 

Here of some highlights of an article I wrote 18 months ago. US 10-year Treasury yield was 2.4% at the time of article. Currently, the same rate is 1.7% 

"Financial markets live in terror of the day the Federal Reserve raises interest rates. However, we should fear exactly the opposite: a persistent nightmare of low interest rates. Chronically low interest rates signal trouble, and they inflict financial pain. Ominously, a recent economic poll (interpreted correctly) suggests that interest rates are going to fall, not rise. ...

And the bad news is that U.S. interest rates are likely headed lower. This spring, 100 percent of surveyed economists predicted rising rates. And if 100 percent of economists believe anything, they are almost surely wrong."

Click on the image of this homeless senior citizen to read the full article. 

 Low Rates are Unfair to Senior Citizens
Federal Reserve Policy is Punishing Senior Citizens


Playing Offense with your Behavioral Biases

Behavioral finance books tell us that our brains are flawed and cause us to lose money. To survive, we need to play defense, and stop our bias-riddled brains from bankrupting us. 

In this post, I make a suggestion for how an 'irrational' trade may help you. Two wrongs may not make a right, but two behavioral biases may may you richer (or less poorer - to paraphrase Derek Zoolander).