Bonds Remind Us That Stock Valuation Still Matters

By Dan AmossPosted March 3, 2021

Most investors are looking for a cash-on-cash return. They put their hard-earned cash into a stock and want a shot at receiving a decent-sized earnings stream or dividend stream within some reasonable amount of time. This cash-on-cash return framework reminds us of the importance of default-free government debt yields that are available. If these yields spike higher, then the willingness to hold the most speculative, lowest cash-on-cash return stocks can fall sharply.

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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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Fun and Games with EBITDA

By Dan AmossPosted September 30, 2020

When credit markets seized up during the February-March market panic, CVNA shares crashed due to its inability to produce used car loans at a sustainable level. In a very capital-intensive business, having enough cash flow is key. Using one accounting metric in a misleading way is necessary to constantly reinforce a narrative of unlimited demand for cars to maintain excitement in the stock.

Conditions Are Ripe for a Crash

By Dan AmossPosted September 4, 2019

There are specific conditions where a market crash is highly likely to occur. This likelihood increases when most traders are playing similar strategies and have the same expectations for their investments. This creates a market that while setting new all-time highs, becomes increasingly fragile. When conditions abruptly change, bulls panic and prices can fall sharply.

Why Retail Investors Refuse to Join the Melt-Up

By Dan AmossPosted December 11, 2019

As baby boomers approach retirement, the older demographic of investors is a headwind for U.S. equity markets due to a more conservative approach to investments. In fact, the demographic-driven rotation from stock funds to bond funds is likely to accelerate rather than reverse. In fact, more companies are now using bond offerings to build up cash reserves ahead of a potential recession.

Brace Yourself for April Earnings Season

By Dan AmossPosted April 15, 2020

One cannot observe all the disruption that’s happened to a fragile, complex system like the global economy and realistically conclude that it will be “back to business as usual” at the flip of a switch. Many companies are reporting first-quarter earnings by late April and investors are bracing for the worst as the economic fallout from the pandemic hits corporate America.

Why Carvana is Not the Next Amazon

By Dan AmossPosted September 16, 2020

One key to distinguishing the failure of a company that truly has the potential to mimic a younger Amazon is whether or not that company’s business model is easily copied. Carvana’s model is much more capital-intensive than a young Amazon was, and any number of catalysts could break the Carvana stock bubble in the coming weeks. That’s why we are holding a bearish option position in the portfolio.

The Infamous Archegos Held Our Latest Short Idea

By Scott StewartPosted April 14, 2021

New Alerts

The Archegos Capital meltdown reminds us that attempting to corner and control stock prices with a temporary blitz of buying or selling is the opposite of “bringing a fair price” to a stock. It brings a distorted, temporary, and fake price to a stock. With SHOP being on the list of stocks that Archegos has owned in the past, it’s not surprising that Shopify is a company that is long on narrative about dominating some future version of the world, but short on tangible financial results.