The world is changing fast. Economic dominance is undergoing an epic shift. According to the International Monetary Fund (IMF), the gross domestic product (GDP) of the world’s emerging… Read More

Here’s the thing about sin: though ugly, it tends to roll on in any economy. This fact is a huge benefit to companies that deal in vice. When searching for investments in a slow-growth or uncertain economy, investors often look to defensive industries such as healthcare, food and utilities. After all, people still get sick and need to eat and stay warm regardless of the state of the economy. But, it’s seldom mentioned that people consistently do something else in any economy — drink and smoke. In… Read More

Here’s the thing about sin: though ugly, it tends to roll on in any economy. This fact is a huge benefit to companies that deal in vice. When searching for investments in a slow-growth or uncertain economy, investors often look to defensive industries such as healthcare, food and utilities. After all, people still get sick and need to eat and stay warm regardless of the state of the economy. But, it’s seldom mentioned that people consistently do something else in any economy — drink and smoke. In fact, vice just might be the most defensive business of all. Stocks in the cigarette and beer industries seem to keep on making profits and the stocks keep going up regardless of what the market is doing. While the S&P 500 is lower now than it was 10 years ago, Morningstar’s cigarette industry category soared at a remarkable average of more than +21% a year for the past 10 years. The Beverage-Brewer (beer) category returned an average of about +16% per year for the same period. And the outperformance is continuing. Read More

There are plenty of good reasons to believe inflation is coming. U.S. government debt has surpassed $9 trillion, nearly tripling from $3.4 trillion in 2000. And things are getting worse. The government ran a deficit of $1.42 trillion in 2009 alone. Even as the economy has recovered, the current administration estimates the deficit for 2010 will be $1.5 trillion. [See Nathan Slaughter’s “Shocking Facts About the U.S. Debt Problem…”] How is the… Read More

There are plenty of good reasons to believe inflation is coming. U.S. government debt has surpassed $9 trillion, nearly tripling from $3.4 trillion in 2000. And things are getting worse. The government ran a deficit of $1.42 trillion in 2009 alone. Even as the economy has recovered, the current administration estimates the deficit for 2010 will be $1.5 trillion. [See Nathan Slaughter’s “Shocking Facts About the U.S. Debt Problem…”] How is the government going to pay all that debt? One way is inflation. The Federal Reserve has every incentive to boost inflation because it would in effect reduce the debt, as it would be paid with devalued dollars. Meanwhile, the government is injecting money into the system by basically giving it away. The current discount rate (the rate charged to commercial banks to borrow money from the Fed) is a microscopic 0.75%. To add perspective, the discount rate was 5.25% in 2006 and 19% in 1980. A massive flood of… Read More

The economy stinks. More than a year after the worst recession since the Great Depression, the economy is sputtering again. Unemployment still hovers at 9.6% and the housing market continues to languish. Economic growth is so… Read More

A seldom mentioned emerging market country is nurturing a future oil giant. Few are aware that Colombia is a growing and dynamic economy. Many people think of Colombia as a violent and lawless place dominated by drug cartels, or perhaps even… Read More

A 10% yield is high in any market. In today’s market, it’s stratospheric. The S&P 500 is only yielding 2% and a three-year CD currently pays about 1.77% on average. Is a 10% yield too good to be true? Often it is. A… Read More

Today’s market environment might be uncertain, but one thing is certain: the crowd is flocking to bonds. In 2009, investors put $375 billion into bond funds, about 14 times more than in 2008 and more than double the previous record in… Read More

The stock market has not been a great place to invest in the past decade. In fact, the S&P 500 is lower now than it was 10 years ago. Bonds, on the other hand, have been a much better place to invest. The Barclay’s Capital U.S. Aggregate… Read More

The Bush tax cuts are pre-set to expire at the end of this year. If nothing is done before then, taxes will increase for everyone earning more than $37,450 a year. So far, nothing has been done. On May 23, 2003, Congress signed the Jobs and Growth… Read More

A sleeping giant has awakened. One of the country’s oldest companies has reinvented itself. Once a stodgy old cyclical company, this Dow stock has used its deep pockets and global brand to create a juggernaut of earnings growth for the next… Read More