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Kurt Brouwer

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  • S&P 500 Data Suggest A Big Change Is Coming [View article]
    Great comments. There were several questions about P/E ratios and factors that might affect them over time.

    One of the biggest factors -- and one that is not often considered -- is interest rates. With a given rate of earnings growth, the P/E ratio would be significantly impacted by higher than average or lower than average interest rates. For example, P/E ratios were very low in 1981, but interest rates were very high. Treasuries were in the mid-teens. Assuming interest rates on high quality corporate bonds remain somewhere in the current range, then I believe it is unlikely we will see P/E ratios go as low as they did when interest rates were high.
    Sep 29 02:15 PM | 2 Likes Like |Link to Comment
  • Small Caps Still Beating Out Large Caps [View article]
    Great questions. Small companies can grow more rapidly than big ones, but they are far more dependent on a slowing US economy than very large companies which usually have large foreign revenue sources.

    Very large companies still have vast advantages in responding to onerous regulatons and tax law changes in a country or even a state.

    Very large companies frequenltly pay dividends, but small companies do not.

    Small companies will still trade at a premium PE to big ones, but the cuurent premium is so large that it is unlikely to continue indefinitely.
    Apr 25 10:00 AM | 2 Likes Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    I believe there is a 50 employee level built into Obamacare at which it kicks in. I have heard anecdotally that small businesses are making sure they do not go over that line.
    Sep 9 06:17 PM | 2 Likes Like |Link to Comment
  • PIMCO And Bill Gross Apologize For Poor Performance [View article]
    Thanks for the comments. I agree that the Pimco brain trust went off the rails in the Spring. Now, they may be even overreacting a bit, but who knows?

    Nonetheless, they demonstrated their collective humility and as Mathew Pixa pointed out they deserve kudos for apologizing.
    Oct 24 03:26 PM | 1 Like Like |Link to Comment
  • Fallout From The Fed's Secret $1.2 Trillion Bank Bailout [View article]
    Excellent comments. Davewmart and other have made the point that our situation in 2008 was not all or none. We could have made shareholders and bondholders take the hit as part of the bailout package. The same with senior management. Instead, we socialized the risks senior management had taken and also left management largely intact.

    Another problem we face now is that the big banks have gotten even bigger due to their connections in Washington DC. So, the failure to deal with them properly has resulted in an even bigger problem. Similarly, by letting the obvious insolvency of Fannie Mae continue, we have let that problem get bigger too.

    Procrastination seldom results in a problem resolving itself.
    Aug 27 04:43 PM | 1 Like Like |Link to Comment
  • Stage May Be Set For A Golden Age Of Natural Gas. Here's How To Invest For It [View article]
    Thanks for the comments folks. I agree that there are barriers to use of NG in a broader way for transportation. However, that has always been the case for changes in transportation.

    I believe the investment case can be made the NG use will grow and that is the basis of my interest.
    Aug 24 01:58 PM | 1 Like Like |Link to Comment
  • Will the Dollar Ever Rebound? [View article]
    I enjoyed reading the comments. Congratulations on staying away from superficial stuff.

    There is no question that a modest increase in the Fed Funds rate would stabilize the dollar a bit.

    Andrew asked about the euro. It is true Trichet did raise the ECB's short-term rate, but he also suggested that this would not repeated soon so the euro weakened a bit.

    The long-term trend for the dollar is likely down because of our government's weak dollar policy. However, the dollar is also oversold so we are likely to see a rally.

    Andrew also pointed out that the dollar exists in a world of other major currencies that are not exactly stalwart of fiscal prudence -- the yen, the euro and the pound. So, any discussions of our fiscal and monetary imprudence has to be done in context that policies of those countries and the EU.

    Hope you have a great weekend.
    May 15 03:45 AM | 1 Like Like |Link to Comment
  • Rebuilding Banks on the Backs of Savers [View article]
    Good comments. I disagree in part with Lawrence's comments. The whole point of saving money in a bank account or money fund or T Bill is to have liquidity and a reasonable yield. That is the first step for millions of Americans who do not want risk such as would be in a bond fund.

    The Fed is holding short rates artificially low to benefit big banks. It is also standing idly by while inflation heats. Both Fed stances hurt those who save.
    Apr 20 04:13 PM | 1 Like Like |Link to Comment
  • Will the End of QE2 Hurt Commodities? [View article]
    Thanks for the excellent comments and compliments on the post. It is clear to me that QE I and QE II have had significant impacts on stocks, commodities and even interest rates.

    As pdtor put it, will there be a QE III? I think there will, but the Fed will wait a while.
    Apr 15 10:47 PM | 1 Like Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    Thanks for the comments. I agree that claims are smaller today as a percent of the working population. That means something over longer periods, but I believe it is clear that claims are too high now to make any meaningful decline in unemployment likely in the next few months.

    Make sure to check out my blog as well:
    blogs.marketwatch.com/...
    Sep 7 04:28 PM | 1 Like Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    I agree with mannettino on this. Uncertainty over future health insurance costs is a significant factor (along with others) plaguing small businesses. Health insurance reform has not really kicked in yet and it won't be until 2014 that we see the full effect, but, from what I have seen, insurance premiums are heading higher.
    Sep 5 10:50 PM | 1 Like Like |Link to Comment
  • Gold Coins Facing IRS Scrutiny? [View article]
    Thanks for all the comments. This post originally appeared at my blog on MarketWatch.com (blogs.marketwatch.com/.../). Check it out some time.

    I believe gold coins and dealers are just collateral damage on this provision because it affects almost everyone. What does this 1099 provision have to do with healthcare legislation in which it was found? Answer: nothing.

    Also, how could the IRS possibly scrutinize millions of new 1099s? Answer: they cannot.
    Jul 25 04:08 PM | 1 Like Like |Link to Comment
  • Is Enbridge's MLP Facing A Funding Crisis? [View article]
    Why did EEQ take such a big jump recently -- nearly 12% one day and almost 3% today?
    Jun 24 03:00 PM | Likes Like |Link to Comment
  • Is Another Financial Panic Coming? [View article]
    Thanks for the excellent comments, pro and con.

    And, JimLewin, thanks for calling out the trolls. We have enough crappy politics in our lives without injections here.

    To clarify a couple of points. I do not suggest a panic happens every time stocks fall by 30% in a year. Here is what I wrote:

    "...By panic, I mean a stock market crash of 30% or more in the next 12 months, plus legitimate fear of a systemic collapse of the international financial system..."

    In takes both a big decline in stocks and widespread fear of financial collapse to equal a panic in my view.
    Oct 24 03:21 PM | Likes Like |Link to Comment
  • How to Buy Into The Coming Natural Gas Boom [View article]
    I agree that natural gas prices are likely to remain soft as the supply burgeons. Therefore, I think users of natural gas and companies that supply infrastructure are going to be the biggest beneficiaries.

    The list of investment ideas I included are all mutual funds or ETFs, not individual companies. I'll leave that to someone else.
    Aug 27 04:49 PM | Likes Like |Link to Comment
COMMENTS STATS
31 Comments
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