The Solar Bubble Hits Resistance

By Dan AmossPosted February 17, 2021

Bubbles are characterized by greater and greater demand for a stock, without the justification of healthy growth from the underlying business. When fundamentals lag behind share prices, investors pay many times their earnings. Because sometimes bubbles can create unjustified gains longer than expected, we use carefully chosen options trades to bet against them.

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Jim Rickards’ Crash Speculator

Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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This Disruption Will Soon Hurt Restaurant Stocks

By Dan AmossPosted October 2, 2019

The restaurant industry has always been a competitive business. With the advent of food delivery apps, the competition has intensified. The net effect of the food delivery boom — once incremental sales fade — will be to significantly lower profit margins at the restaurant level. Lower margins along with weaker consumer spending on discretionary items will put immense pressure on restaurant stocks.

How Meal Delivery Kits Are Part of the Sugar-Rush Economy

By Dan AmossPosted April 1, 2020

Like sugar for humans, bubble-driven economies build up a tolerance for ever-higher doses of money and credit. Once economies fall into addiction, the long-term consequences are tragic: either a deflationary collapse or hyperinflation. An alternative path might be a policy that proactively weans the system from addiction, but such a policy is politically impossible. That’s why many companies today are part of the sugar-rush economy.

Paradigm Shift in Markets Could Favor Short Sellers

By Dan AmossPosted July 24, 2019

Investors expect the next round of Fed rate cuts next week will push Treasury bond yields even lower and stock prices even higher. But good returns are simply future returns being pulled forward by the “present value effect.” The danger is future earnings that are awarded a high present value often fall short of expectations during rate-cutting cycles.

Why Target Stock Is Much Riskier Than It Appears

By Dan AmossPosted November 27, 2019

As we move into December, retail stocks are vulnerable to both holiday sales as well as scheduled tariffs to be implemented on consumer goods that will squeeze profit margins. This will put pressure on earnings and stock prices as a result.

Royal Caribbean Cruises To Dilution

By Dan AmossPosted October 14, 2020

With changing consumer behavior due to the pandemic, the travel and leisure industry is suffering due to cash burn and weak balance sheets. This includes cruise ship operators like Royal Caribbean. Like so many cyclical travel companies and airlines, RCL shareholders are suffering significant dilution of their stakes in the company

Investors Can’t Ignore Balance Sheets Forever

By Dan AmossPosted June 10, 2020

As economies reopen, revenues bounce and jobs return, many deferred payments will become due as well. Investors will soon recognize the risks of owning shares in companies that have borrowed heavily to tide themselves over. The debt burdens at companies with weak earnings fundamentals tend to squash shareholders over time. So investors should be wary of any uptick in risk aversion that could cause a stock to crash very quickly.