Tag Archives: Markets

Market Valuation Update … How are we doing? Forward PE Ratio Review

As mentioned multiple times … with recent examples here and here by almost any metric Capital Market valuations have been and are stretched.

As a reminder this does not mean that markets have to come tumbling down to earth … just that heightened risks of sharper declines may be possible. Also as a reminder, just like our teenager with oversized clothes grows into them … as earnings increase faster than Capital Markets rise, valuations can come back in line! YAY

Updated Valuation Metric from our Friends at JPMorgan

And while still stretched take note of the very far right of the graph as it has smartly turned over as earnings outpaced Capital Market Growth



This is why the Graph is moving in a better direction – huge expected earnings in view….

Nice….

Still no time to swing for the fences, which we never do- but good progress…

Have a Great “Better Valuations” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

September 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale …

Hello and Welcome to our September 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

September Video

(YouTube)

September Review By John Kvale

Financial Planning Tip  –

Markets Gone Too Far

In a luckily timed post here in our August review and again here in September we mentioned that markets had gotten far enough ahead of themselves, we had to waive the white caution flag…

Oddly, within days of our original white waiver, markets slipped … always rather be lucky than good – markets breathed caution in the air quickly with a sharp 10% correction — Safety is still advised!

Capital Market Comments

Inflation & The FOMC

In a somewhat preliminary discussion on what might change market sentiment, not knowing it had already adjusted a bit, here , here , here we discussed inflation measures, the FOMC (Federal Open Market Committee) and their views along with our personal favorite inflation measure, Dallas Federal Reserves own Trimmed Mean inflation gauge.

Have a Great September Update!

Talk to you at the end of October!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

August 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale …

Hello and Welcome to our August 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

August – 2020 Video (YouTube)

Financial Planning Tip  –

Mysterious Form 5498

In a luckily timed post (two showed up in the mailbox the same day of the reminder) here we discussed the extra late arriving Form 5498.

This is a confusing settle up form that requires not action other that to add to your tax file in order to avoid unnecessary taxes!

Fraud Wire Delay Reminder

In this post we remind those setting up new Wire/Linking instructions to financial accounts, especially non liked titled accounts to be careful and have patience.

Fraudsters are attempting to take advantage of the situation!

Capital Market Comments

Gone Too Far

You know us to be very positive – all through the many negatives that have occurred !

You also know we will call it like we see it!

Markets have officially gone too far and are ahead of themselves, expect bumps and no extra risk taking is warranted at this time – CAREFUL!

Have a Great August Update!

Talk to you at the end of September!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

July 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale …

Hello and Welcome to our June 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

July – 2020 Video (YouTube)

 

Financial Planning Tip  –

Careful Use of Credit Cards to Maximize Perkscredit card

We carefully spoke on the use of Credit Cards and maximizing their points and incentives due to repeated inquiries about the topic, in this post.

Credit Cards can be very dangerous and the card companies want us to carry balances … so PLEASE BE CARFUL!

Vaccine Update – It’s Looking GoodVaccine

In this post we pointed to an excellent Bloomberg Tracker that is showing multiple Phase III drugs about to hit the testing.

Phase III is the last one before mass production… making for a very fast track of multiple possible cures for Covid.

This is also market friendly as well.

Capital Market Comments

The Look Through Continues – Expect Bumps

Not trying to sound like a broken record, but in April we proclaimed that smart market participants may likely look through the valley and over the hill to eventual earnings.

As a reminder, we were really on an island as very few were positive at that time.

They did, and continue to do so … with a bit too much rose colored glasses in our opinion…

We continue to expect bumps as there are tons of unknowns and a negative narrative can take over quickly…

Not letting our guards down!

7-31-20 YTD Large International and Small

Have a Great July Update!

Talk to you at the end of August!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Pacing Ourselves Preview, A Runners Perspective …Where did January Go? …Friday

In one of the first longer runs, a 1/2 Marathon (13.2 miles) many years ago…. The Cardinal sin of a new longer distance running was made….

Starting too fast !

There is a saying in running, for every minute you go out too fast, you will lose two coming back.

Next week we will take a detailed look to see if the Capital Markets may have started this year’s race too fast!

2-1-18 SP 500 year chart

Speaking of pacing ourselves …. Wow, January went fast .. Slow it down !

Today is a Friday heading into a late Winter weekend with Tennis Travels on the horizon .. Enjoy your weekend, talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Why do Capital Markets Move Up and Down?

Most recently the capital markets have taken a breather after a very long, almost unstoppable, run in an upward direction.

Have you eve wondered what exactly makes the markets move in one direction or another?

The true answer is pretty simple; No one is 100% certain, especially in the shorter term!

Often many write, (present party included), on the reasons for capital market movement and the recent events that have occurred. Over longer periods of time generally the markets are relatively rational, but not always. Just as some days we wake up and feel terrific, and other days for no apparent reason, we rise to a long, tough, less positive day, the capital markets will suddenly take a negative tone as well, sometimes for almost no apparent reason.  

Many who have visited our office comment on one of our market reminder sayings written on our window with erasable ink “The Markets can stay irrational longer than you can stay solvent.”  This saying became very popular by short sellers during the late 90’s tech bubble, as many short investors were correct in the direction and the valuation, but went broke just before they were vindicated.

Here are a few items that dramatically change market direction, Big Multinational events, Money Flows to and from certain areas of the markets, Investor Confidence, and often peer pressure. For peer pressure examples, take a look at the Financial Times  Market Macro Map popup, of the world markets, over a few mornings, and see how the tone is set globally and moves across the world.

Many times we agree with the market headlines on the direction and reason, but not always. There are times when markets move, especially in the short term, for reasons that are unknown to anyone.

Have A Good Day!

JK

The Fear of the Unknown; Bernanke Update; State of the Union

To some the Capital Markets may seem mysterious and maybe even schizophrenic at times, due to the sudden frequent change of character.    

Not Really!    

The Capital Markets are very intuitive, insightful, but often overly dramatic. As we mentioned in our Trifecta post earlier, participants of the Markets now have a lot on their plate as they deal with several different possible structural changes.    

Bernanke is getting more support as the end of the month deadline approaches, which in our opinion is good news. (We think stability in offices is a good idea.)    

Today, we add one more worry for participants, as there have been rumors of an aggressive speech at the State of the Union tonight. In our opinion much of this rhetoric is overstated and will be forgotten in just a few days.  Even with the passing of some of these worries, Capital Markets may feel a hangover of sorts as many global markets have taken their cue from our land and become squeamish themselves.    

State of the Union 2010

Tune in tonight and keep an eye out for any decided changes from earlier views.  If there are, we will update you accordingly.    

Have a Great Day!    

JK

Earnings, Earnings, Earnings-Currently One of the busiest weeks of the Quarter

This week marks one of the busiest week for earnings of the quarter as many companies begin reporting their 90 day treadmill results.

As we had said in an earlier post, earning season is going well.

You might ask why the markets are not acting well? When markets turn tail and begin a downward move, almost every stock within the capital markets comes along without discretion. Even companies reporting excellent results are often pulled down by their peers.

The tugging downward of good companies by their not-so-do-well brethrens makes for excellent investment opportunities.

Is the Glass Half Full or Half Empty?

Have a good day!

JK

A Structural Trifecta for the Capital Markets to Digest

Over the last recession, fundamentals deteriorated, and the capital markets began a squishy journey starting in 2008 and firming late first quarter of 2009. Fundamentals are the key drivers for the capital markets, but they are not the only driver. Structural changes can also have a major impact on our capital markets.  

Over the last several business days, the capital markets have been hit by a trifecta of structural changes:  

Trifecta

  1. During a publicly traded financial company conference call (we think this was no coincidence), President Obama hit the airwaves and laid out plans to dramatically change the financial industry. Details shocked many participants and immediately changed valuations of many financial companies.
  2. A question of Bernanke’s re-appointment (due by end of January), which seemed a 100% lock just weeks ago, seeped into the picture.
  3. An unexpected interim party change in a Senate seat, from a historically compliant party region (Boston, Ma.)   

Given the fundamental positives we have had at our back over the last year, it will be interesting to see how investors stomach the latest capital market movements. In our opinion, this is the first test many investors will have seen in almost a year, and is a process of shaking out the weaker hands of the market.  

Have a Great Day!  

JK

Nice Start to Earnings Season – Remember today is a Witching day

With the unofficial start of earnings season marked earlier this week, Alcoa,  which disappointed many investors, we began to take a few deep breaths in anticipation of a tough season.

Fortunately Alcoa was the exception, not the rule, as for the most part, earnings have been good, with company managers gaining confidence in their outlook, customers, and future for the year, which bodes well for employment i.e. As growth and confidence from a company level increases, hiring of employees will most likely follow.

Lastly, today is a Friday Witching, which means synthetic contracts expire, this usually puts short-term unforseen trading pressure on stocks and the indexes along with extreme total market volume.

Have a Good Weekend !

JK