It seems every time a stock or asset class starts appreciating in value the chattering classes start talking about bubbles. Manhattan, or Hoboken real estate set record prices - bubble. Private equity companies valued at over $1 billion - bubble. While these and other examples may be overvalued, there is a big difference between overvalued and bubble territory. At it's bubble-icious peak in March of 2000, the Nasdaq traded at something like 175 times forward earnings. Today the Nasdaq 100 trades for around 22 times forward earnings. The index levels may be simlar, but the valuations are definitely not.
Market volatility or the daily and weekly market ups and downs is a measure of market risk. Nowadays, with multiple business channels vying for viewership, alleged increasing volatility is used as a tease to draw viewers. In addition, new investing instruments and a change in market structure have contributed to bursts of volatility that are very short lived and in-actionable and should be ignored as noise by the long-term investor. Understanding what and who is driving volatility, and its brevity is critical in keeping your fears in check and your long-term strategy intact.
October 6, 2015
August 31th 2015
After a multi-year period of relative calm, markets around the world have been much more volatile this month. While there are many factors behind the change, the most immediate and commented upon factor has been Chinese economic weakness and the devaluation of the Chinese yuan on August 11th by 2%. Chinese growth over the last several years has provided a large portion of global growth and fears that it would drop into a recession and take the world with it swept around global markets.
In the past few years, we have witnessed a regular pattern of online security breaches. In the corporate world, high profile companies such as Target, Home Depot and Sony have been hacked. In 2014, private celebrity photos and other private data were hacked via a breach of Apple’s iCloud service. The federal government has also been targeted, as earlier this year the Office of Personnel Management reported that 22 million electronic personnel records and security-clearance files were stolen.