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Is it All Over?




Weekly Writing 2019.03.11

As you well know, it has been my opinion over the last six years (and even before) that the fundamental outlook for the economy was not good and that the stock market was overvalued. One can’t tell the market what it should do as evidenced by the following:

 

Approximately last six years

1.    Corporate profits before tax: -1.2%

2.    S&P 500: +77%

3.    Debt build-up:

a.    U.S. Government: +$4.8T

b.   U.S Non-financial: +$3.0T

4.    Real GDP growth rate: +2.5%

 

Almost any kind of adjustment made for the debt build up would result in slow to no growth for the economy. Please note the following chart comparing debt to GDP since 1955. I ask you—is this sustainable? Of course not. Me thinks 2019 may be the year of reckoning.


The Best,

Don S. Peters

Information contained in these commentaries is based upon information obtained from sources both external and internal which we consider to be reliable, but the accuracy of the information and the recommendations contained herein cannot be guaranteed, nor do they constitute a solicitation for the purchase or sale of any securities mentioned herein. Information contained in this commentary may not be reproduced in any form without written permission from Donald S. Peters.