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Brandon’s Charts of the Week

Posted: Brandon Arns

Every week, we read a TON of information. Blogs, articles, research papers…it’s our job to be informed about what’s happening in the market, economy, and society in general. Most people don’t have the time to sort through so much information, so we’ll do it for you. Every week, I will post some of the best charts, graphics, tweets, etc, that I find and put it here in a quick, digestible format. Enjoy.

 

This first chart is my favorite of the week. Each colored line is a major stock market:  Japan, Europe, emerging markets (such as China, Brazil, India, etc), and the U.S. What’s important to note about this chart is how long major stock markets can go without making any money. Several decades with 0% or negative returns is possible, even in the most established countries. This is hard to imagine as a U.S. investor, we’ve been fortunate. I hope we stay that way…

 

 

The orange lines are the forecasts that professional economists made for where interest rates would be at different times. The black line is where they actually went. The market is impossible to predict, so don’t pay too much attention to what you hear some “expert” say on CNBC.

 

 

The next several graphics are about U.S spending changes over time. First up, is the USA Income statement. Tax revenue growing, but expenses growing faster.

 

 

This chart shows the previous table’s bottom line, but graphically. You don’t necessarily expect a government to be profitable the way you would a business, but you’d like some of those red bars to be shorter.

 

 

The next batch of graphics show how much entitlement spending has increased over the last several decades. Much of this is due to an aging population and drastically higher medical expenses.

 


 

Mortgage rates are back to 2017 levels, making it an attractive time to buy a house or refinance.

 

 

And to put that attractiveness in a number is the tweet below:

 

 

Currently, the employment situation is good. More job openings than people looking for jobs means full employment. In theory, this should lead to higher wages.

 

 

That’s the good news regarding the economy, below is some bad news. Not everyone has participated in the current bull market.

 

 

Now for some investing topics. Value stocks are stocks that, by some metric or combination of metrics, are cheaper relative to the market. A popular example would be stocks with a low price to earnings ratio (how much you pay for a companies profits). The chart below is saying that those “value” stocks are the cheapest they’ve been relative to the market since 1999. Many stock managers consider themselves “value managers”, and this chart may explain part of the reason they’ve struggled so much over the last decade.

 

 

In 1999, the WSJ published an article titled “Amazon.bomb” about how Amazon was way overvalued. Soon afterwards, Amazon’s stock price fell about 95%. Given how well the stock has done since, its hard to remember how risky of a stock it was.

 

 

If you’re wondering if it rained an unusual amount the last year, see below:

 

 

And finally, according to the graphic below, Tijuana, Mexico is your best bet if you want good weather. Cairo, Egypt if you like it hot.

 

 

 

 

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