PIIGS – The Problem is 17 vs. 1

17 different member states of the European Union share a currency called the Euro, and have their monetary policy set by one central bank, the European Central Bank (ECB). Over the last year the rolling problems in Portugal, Ireland, Italy, Greece, and Spain (the so-called PIIGS) have helped demonstrate the fundamental problem of having 17…

10-Year Normalized P/E Ratio (Part 1 of 3)

The 10-Year Normalized Price-to-Earnings ratio, commonly known as P/E 10, was originally introduced by Professor Robert Shiller in his ground-breaking book Irrational Exuberance [Princeton University Press 2000, Broadway Books 2001, 2nd ed., 2005]. The database used in the book is regularly updated and made publicly available on Professor Shiller’s website (www.econ.yale.edu/~shiller/).

A Father’s Day Blog

This past Sunday was Father’s Day, and I found myself reflecting on fatherhood…as did (I hope) many other fathers out there. My father, Paul, passed away many years ago but his lessons about the dignity of working have never left me. My own children, Danny (20) and Carly (17), spent the day with me at…

Testing Support

Stocks have had a rough go of it lately. The S&P 500 Index is off by about 7% from its most recent high reached on 4/29 due to a host of growing concerns, including an economic slowdown and the ongoing European debt problem.

The All-Important Question

Tomorrow the investment team at Pinnacle will gather for the week, and the job at hand is to get to the bottom of the all-important question right here of whether the current market selloff is still just a correction, or maybe something more. For months we’ve been giving the bull market trend the benefit of…

VIX Not Showing Much Worry

The VIX index was created by Robert Whaley in 1993 as a measure of implied volatility of S&P 500 index options. It represents the expected market volatility over the next 30 day period, and therefore, is a way to measure fear or complacency in the market. Lower numbers indicate that investors are complacent and higher…

Soft Patch Brings Back Whiff of Deflation

For most of the first part of this year, inflation fears were running rampant through Wall Street as unrest spread across the Middle East and oil spiked back towards $100/barrel. However, there’s been a notable shift in recent weeks as economic momentum has stalled. In fact, some might say that a whiff of deflation has…