Young's World Money Forecast

Long-time readers are familiar with Young Research's Moving the Goods Index, a market-cap-weighted stock index made up of nonairline transportation companies. If I had to choose only one economic indicator to use, this would be it. Transportation companies lead the business cycle. The theory is that you have to move the goods before you sell them. If the index is reaching new highs, economic growth is likely improving. And if the index is dropping to new lows, economic growth is likely slowing. For the last couple of years, since the end of the major Covid shutdowns, the index has been consolidating, with slightly higher highs and slightly higher lows. Keep your eye on my Moving the Goods … [Read More...]

In 1985, America was just coming off one of the worst bouts of inflation in its history. Much as today, with inflation trailing off but still a worry in everyone’s mind, an argument naturally broke out between extremists in the financial media over whether America was poised for reignited hyperinflation or a deflationary death spiral. I had recently pioneered the Financial Armadillo Strategy and was asked to add my voice to the discussion with an op-ed in the June/July 1985 issue of Reason magazine. Instead of piling on with more extremism, I wrote: In the last decade, the world economy has become increasingly complex and unpredictable. Today, depending on the evidence being considered at … [Read More...]

In June of 1993, Bloomberg’s Pam Black asked me how to stay ahead of the inflation curve. I told her to “dip a toe” in gold. I continued: “Buy it with the idea that you won’t make any money. Hopefully, your other assets will do well, but if they don’t, you’ll be damn happy you were in gold.” Take a look at the chart below, and you’ll see how gold and the dollar have performed since that article was published. … [Read More...]

You want a history lesson? In 1987, I was interviewed by The Kiplinger Magazine - Changing Times (which is known today as Kiplinger’s Personal Finance). This wasn’t long after I had written Financial Armadillo Strategy with the late David Franke. At the time, America was coming off some of its heaviest inflation ever, and investors wanted a solution to the problem. Despite those high rates of inflation in the 80s, I warned that even somewhat more moderate rates of inflation—like those Americans have seen over the last two years—do real harm to investors. “I don’t mean 10% or 15% inflation; 4% or 5% is absolutely debilitating,” I said. Even then—like today—I was focused on dividends and … [Read More...]

Since the “temporary” stimulus package of 2009 was enacted by Barack Obama and greased through the system by Ben Bernanke’s Federal Reserve, Americans have faced ever more burdensome budget deficits. After Joe Biden moved into the White House, the dangerous spending reached a new level. Uncontrolled money printing has set America up for some hard lessons as the interest on the federal debt rapidly closes in on $1 trillion a year. This time around, the Federal Reserve isn’t running a bond-buying program while pegging interest rates at zero. Instead, the Obama/Biden-style spending will be forced to face the music on interest. Now, after years of profligate spending, Joe Biden has put … [Read More...]

Originally posted on May 13, 2021. Back in February, I wrote to you about how I started in the institutional research and trading investment business at Model Roland & Co. on Federal St. in Boston in August 1971. Just up the street from Model were Fidelity Investments, and Wellington Management, both of whom I called on from my very first hours on the job. Over five decades ago, Ned Johnson, aka “Mister Johnson,” ran the show at Fidelity. At Wellington, Jack Bogle, “Mr. Mutual Fund,” had not yet left Wellington to start Vanguard.    My focus in the initial going was international research and trading, and remains so today all these decades later.  I still consider Fidelity and … [Read More...]

Attempting to time the market could be the most popular mistake among market participants. Here’s what I wrote about market timing back in January 1997: Panic!... History has been made. Since the exact summer Dow low of 5346.55, the Dow has soared an amazing 21.9%. Never in stock market history has the Dow added 1,000 points so fast. As a cap to the monster four-month surge, the Dow Jones News Service headlined a lead story with, “November Point Gain Was Largest Ever for the Dow.” To anyone who was foolish enough to sell stocks in front of this tidal wave, the bailout goes down, in terms of points, as the single worst market-timing event in history. How have you fared? With a … [Read More...]

Hurricane Lee has strengthened to a Category 5 storm and is barreling through the Atlantic on course to hit America's East Coast. Right behind Lee is Tropical Storm Margot, which is also expected to reach hurricane levels. First Coast News reports: It's very active across the Atlantic basin, but thankfully there are no local threats in Jacksonville within the next week. Remember to stay updated this time of year as the historical peak of the Atlantic hurricane season is approaching. Tropical Depression 13 has formed in the Atlantic, and it is forecast to become a major hurricane by Saturday. We are watching it closely as models suggest it could head towards the Caribbean, or travel just … [Read More...]