There is the interesting return of a debate about share buybacks, as they have reached new all-time records, amounting to USD 1 trillion in 2024 and contributed to the US budget USD 7.4 billion through taxes on buybacks introduced in 2023. That’s roughly 2% of the entire US market capitalization. Last year’s buybacks where lead by Mag7, followed by large banks. Apple lead the pack with over USD 100 billion of stock buybacks. Debate is that many board of direcors do not adjust the EPS targets for the buy back policy. The EPS which is the main driver of the…

REITs (Real Estate Investment Trusts) offer investors an attractive combination of income, diversification, and potential capital appreciation. As of the end of 2024 and the start of 2025, many REITs are trading at multiples significantly lower than historical averages. Valuations approached very attractive levels, though the picture varies across sectors due to the unique nature of their underlying assets, tenant profiles, lease structures, and sensitivity to economic trends. Each sector’s valuation reflects its unique balance of risk and reward. For example, sectors like industrial and speciality REITs may offer attractive valuations due to strong growth prospects and stable cash flows.…

Investors often go through period of hightened risk aversion and focus too much on avoid losses while ignoring the opportunties. Ther are many reason that can motivate investor to stay out of the market, including: Whichever reason overly risk averse investor have, the belive is that ‘market correction is coming’ and by pulling out of the market he or she can avoid losses. One of the greatest investors when asked if he positioning portoflio for expected recession said: “Far more money has been lost by investors in preparing for corrections, or trying to anticipate corrections, than has been lost in…

Inflation is cooling, due to restrictive monetary policy that is starting to impact the aggregated demand. Main tool used by the central bank to reduce aggregated demand is interest rates increases. Higher rates are helping to reduce consumption through making savings relatively more appealing, and helping to reduce business investments and export through increase in financing costs. Furthermore two factors are negatively impacting employment, which further reduces aggregate consumer spending and reduce price pressures. AD = C + I + G + ( X – M ) where: AD = aggregate demandC = consumptionI = investmentG = government spendingX =…

For over a decade Wall Street has been repeating that ‘There Is No Alternative’ (TINA) to equities, but this year for the first time Wall Street suggest ‘There Are Reasonable Alternatives’ (TARA). There is one reason for this significant shift in narrative – real yields came back. Real yield is a difference between the nominal interest rate and the inflation rate (expected or actual). From return perspective, real yield reflects impact of the risk free rate on purchasing power. If it’s positive investors are able to grow their purchasing power without taking on risk. From a time perspective, real yield…

  Central banks are focusing on defeating persistently above-target inflation, by performing the most aggressive tightening in 4 decades: FED 500 bps since March 2022 (5% in 14 months) BOE 440 bps since December 2021 ECB 375 bps since July 2022 This tightening ended global bull market of 2021 and slashed valuations and pierced bubbles in the most speculative markets. In 2023 markets recouped some of the 2022 losses. Tape remains fragile and consensus is that hikes have a delayed impact on the economy and will eventually bring recession. Any monetary policy choice from now on has an increased risks:…