George Santayana once said that “those who cannot remember the past are condemned to repeat it”. Apparently, humans are not the remembering type. For example, every time we declare that a new economic crisis is impossible, it strikes us harder than ever. Then we are always wondering where did it came from. As Mark Twain put it “ history does not repeat itself, but it often rhymes.” And that is why we have to learn from it.

Cigna: Fundamental Analysis Simply Not Enough

Cigna Corporation has been one of the wonder stocks of the last 8 years. Shares of the health services organization gained from as low as 8 dollars a share in November, 2008, to as high as 170.68 in June, 2015. We are not even going to calculate those gains in percentage points. “A lot” is…

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What Do Oil and Tulips Have in Common?

If we need to provide a definition for a “market bubble”, we would describe it as a part of the economic cycle, which characterizes with a rapid and often irrational expansion of the market, accompanied by a an unprecedented surge in prices, driven mainly by optimism and euphoria about the future, followed by an unexpected sharp contraction…

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ECB’s Quantitative Easing (QE) and Velocity

Why ECB quantitative easing program may not achieve the much needed results? If we follow the economic theory, an increase in the money supply should cause inflation and therefore price inflation. But here comes the tricky part. Most economists do not make the difference between these two concepts. Inflation is an increase in the overall money…

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The Wave Principle and “The Panic of 1907”

Have you ever heard of “The Panic of 1907”? Before the Great Depression of 1929-1933, 1907 was known as one of the worst years in the history of the stock market. Needless to say nobody saw it coming when the Dow Jones Industrial Average climbed above the 100 dollar mark for the first time in January 1906.…

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The “Black” Days In Market History

This article is an overview of the “black” days in market history and has its task to explain what happened then, why people called them “black” and why investors will always remember them with fear and caution. Once Mark Twain said: “History doesn’t repeat itself but it often rhymes”, that is why we find it…

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Is the FED controlling interest rates?

Is the FED controlling interest rates?

Here is a chart of the 10-Year Treasury Note all the way from 1981. The downtrend is over, marked with an ending diagonal. The rise in interest rates will continue as we see a sharp impulsive rally, typical for ending diagonals, signaling a reversal and symbolizing the new trend. The hidden engine behind the market…

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Black Wednesday

Black Wednesday

The day when the British government was forced to withdraw the pound from the European Exchange Rate Mechanism. The date of the Black Wednesday crash was September 16, 1992, and five years later the UK Treasury estimated that the loss from that day was around £3.14 billion. The picture shows us how Bank of England…

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What is credit inflation?

What is credit inflation?

This chart contains some of the worlds biggest indices. It clearly shows, that every other country except the USA is still trying to recover from the 2008 crash. Even countries like China and Germany are still struggling and can not come close to the point they were before the crash. On the other hand the…

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