ProfitScore IQ

The ProfitScore IQ is our monthly newsletter in which we discuss the U.S. and global economy and trends we see emerging that can affect your investment success. Packed with invaluable insight and actionable information about the U.S. and global equity markets, The ProfitScore IQ lets you benefit from our research and the daily hard work that contributes to our never ending journey to be better stewards of your investment assets.

  • Details On The Fed’s New Trading System

    Details On The Fed’s New Trading System November 1, 2010 By John M. McClure A Brief Performance Update Is the Fed Helping Fund the Treasury's Pawn Shop? Did the Germans Just Invade Poland? Why Should You Care? Quantitative...
  • Size Matters When It Comes To Jobs

    Size Matters When It Comes To Jobs September 17, 2010 By John M. McClure A Brief Performance Update Here We Go Again Paddling a Canoe up a Waterfall? So Where Did We Go Wrong? Is the 800-Pound Economic Gorilla Invisible? Why Can't...
  • Cash Is Less Painful Than Doing Something Stupid

    In This Issue:

    A Brief Performance Update
    Hindenburg Omen - Riding a Lead Zeppelin?
    Looking To the Presidential Cycle
    Oily Omen
    More Transport Weakness
    Cash Collared Consumers
    Housing Holdouts
    Employment-Challenged Economy
    So what's next?
    Time to Put on My Coaches Hat & the BSU Broncos

    A lot has changed since my last letter.  Many aspects of worldwide markets have seemed to turn on a dime and are pointing to a volatile future.  Unlike my last few letters, there is no silver lining in my tone.  This letter will print longer than normal because of all the charts and graphs. 

    One of my favorite leading indicators on the health of the economy is the Growth Index from the Consumer Metrics Institute.  It does an astonishing job of taking the pulse of the American consumer.  Most other consumer based indicators are lagging by months, but this indicator gives weeks, and sometimes months of lead time - making it a very unusual and helpful indicator about the economic future.  If you are not familiar with this index, below are some helpful charts and comments to jumpstart your learning curve.  It is currently firing a thumbs down. 

    It seems like every data point we turn over we find nothing but slimy snails and worms, and my general comment after massaging the numbers is yuck!   When I think about the unconscionable amount of my children and grandchildren's future that has been mortgaged to produce the worst economic recovery since the Great Depression, it makes me want to pull my waste basket out from under my desk and purge my lunch.

  • Is Our Nation's Largest Creditor Telling The Truth?

    In This Issue:

    Our Monthly Performance Update
    China: The Economic Elephant in the Room?
    Chinese Fool's Gold
    Smoke and Mirrors
    Superbubbling Over?
    Trade Earnings of the Impossible Kind?
    A Drop in the Bucket
    Interesting Reading
    Portfolio Performance Analysis
    Why Pigeons Walk Instead of Fly in Boise Idaho

    Was the flash crash a market related fluke, or could it be telling us something about our future?  When most investor's think back to the most recent bear market, many remember Bear Stearns, Lehman Brothers, and the gut grinding months of September, October, and November.  The event was so traumatic that it is easy to forget how it all got started. 

    The first shot across our bow was in August of 2007.  As it turned out, most of the larger quantitative based market neutral long/short hedge funds had become correlated with their positions and didn't know it.  Each thought they had developed some super secret alpha generating model, but actually these funds had developed similar models that were making the same trades.  Everyone's super secret computer model had found the same edge in the data. 

    In August of 2007, the perfect storm hit causing these funds to unwind their trades at the same time causing huge losses for their clients.  When there is no one to take the other side of your trade, it is painful.  The losses were so large that it caused many hedge funds to close their doors.  Even Goldman Sachs had to close down some of their billion dollar funds, so it must have been completely unexpected.  Genius failed again.

    What happened in August of 2007 and the flash crash in May of 2010 seems eerily similar.  Do you recall what happened next?

  • Why It Is Good Not To Be First

    In This Issue:

    Our Monthly Performance Update
    Dr. Howard Bandy Has Joined Our Team
    An Important Change to Our Equity Allocations
    The Most Important Charts of the New Century
    Surfing the Money Tsunami
    Bubbles of the Far Away Kind
    Making Everyone Else Rich...
    If You Can't Beat the Fed, Join Them
    Interesting Reading
    Spokane, Reno, and Orlando

    The United States is very fortunate to have a front row seat to Europe's, and soon Japan's, sovereign debt crises. Going through the second phase of the credit crisis will be difficult short-term, but learning hard lessons from our neighbors will soon turn our ship out of harm's way and ensure the long-term economic viability of the United States. It's not that we're smarter than our comrades across the pond, it's just that our economic cycle is five to ten years behind theirs.

    When this sovereign debt crisis finally plays out, socialism as currently defined by Europe, will no longer exist. As the book, The Fourth Turning clearly documented, humans have a nasty habit of hitting the reset button every 80 to 100 years. The Romans and Greeks recognized and documented this destructive and rebuilding phenomenon in their own culture.

  • The Great Experiment - Will It Work Long-Term?

    In This Issue:

    Our Monthly Performance Update
    Doing Things Better
    Welcome to Keynes' Grand Petri Dish
    Money, Money Everywhere...
    Why Isn't the Money Getting to Where It's Needed?
    Treasury International Capital Flows
    Interesting Reading
    Portfolio Performance Analysis
    A Boise View on Commercial Real Estate

    So much changes in the economic picture from month to month that it is hard to write about it in one letter.  I have tried to send out letters more often, but research demands have made it almost impossible.  In order to communicate with my readers more often, I will soon be joining the blogsphere and begin publishing my thoughts in smaller bites through my blog, and then follow up with a monthly summary of my thoughts in this newsletter.

  • Would Someone Please Press The "Easy Button"?

    In This Issue:


    Our Monthly Performance Update
    My Decision on Buying My Next House
    Cocaine, Profits & Your Brain
    Top Ten List of Risks to Watch Out For
    Interesting Stories 
    Portfolio Performance Analysis
    Basketball, Dancing and Mom's Scavenger Hunt

    In this letter, I have produced my top 10 list of risks I see in the immediate future.  Several months ago, Greece would have been lower on my list.  However, economic conditions are very fluid and seem to be changing at increasing speeds.  I will also discuss my decision on when I plan to buy my next house.  For those not familiar with my housing saga, I sold my house in May, 2006 because I fortunately saw this housing crisis approaching.  I have been renting a home since then, and now my rental contract is due for renewal in March, so I need to decide whether to buy a house or continue to rent.  I'll outline my research on this decision.


  • Squeezed Between A Budget Rock And A Fiscal Hard Place

    In This Issue:

    Our Monthly Performance Update
    The Golden Rule - Does It Still Apply?
    Gold vs. Treasury Bills
    Treasury International Capital Flows Jump
    Real Estate Update
    Who Pays the Taxes?
    No Recovery in Tax Receipts
    Portfolio Performance Analysis
    My Boise State Broncos

    Is the real economy truly turning up or are recent upward ticks in the data caused mostly by government stimulus programs?  One thing for sure is that betting against the American consumer has historically been a very bad idea.  Are gross amounts of government spending trying to make this a better trade?

  • Two Steps Forward and Three Steps Backward

    In This Issue:

    Our Monthly Performance Update
    Dollar Reality Check
    Are Valuations Justified?
    The Mother of All Carry Trades
    Market Summary
    Portfolio Performance Analysis
    Can I Do It This Year?

    Timing is everything and being early with your investment decisions can be almost as painful as being late.  Since most investors lost significant sums of money in 2008, they feel a deep-seated fear of getting left behind.  It is called the heard instinct.  This important emotion kept us alive when we hunted with knives and spears, but today it runs investors off a cliff.  In dealing directly with retail clients, the heard instinct is the most prevalent emotion I see.

  • Currency Manipulation – Has It Helped Your Net Worth?

    In This Issue:

    Discussion on the Hill
    Dollar Crisis Averted, But at What Cost?
    The Cost of Global Dollar Reliance
    A Year After TARP -- Was It Necessary?
    Attaboy Jack!

  • How Our Home Prices Compare To The Rest Of The World

    In This Issue:

    Global Home Price Comparison
    Lessons from the Forgotten Depression
    Resisting the Intervention Urge
    Chaining the Tiger
    More Difficult Than Timing the Market

    Quote of the week
    "Institutional equity investors fear missing out on the rally. Bond investors fear deflation and the stock market is way overdone and is ripe for a steep correction. The gold bugs fear that the fiscal and monetary largesse globally will lead to inflation and fear that the U.S. dollar is on the verge of collapse. Never before has fear felt so reassuring - pick an asset class, and it's going up in price." -- David Rosenberg in a recent newsletter to clients

  • Why We Appear To Be On The Down-Hill-Side Of Unemployment

    In This Issue:

    A New Strategic Alliance 
    Our Monthly Performance Update
    Incomes - A Four-Decade Long Report Card
    Will the Real Unemployment Rate Please Stand Up?
    It's ROC That Matters
    Will They Keep Buying Our Bonds?
    Rocket-Riding Stimulus Junkies (Part II)
    Paying the Piper
    Are You in "Old-Man Shape?"

  • So What Is Warren Buffett’s Desert Island Indicator Saying?

    In This Issue:

    Warren's "Desert Island" Indicator
    So What Is It Telling Us?
    The Weekly Rant - The Rocket-Riding Stimulus Junkies
    Moose for Dinner

  • Are Shipping Rates Trying To Tell Us Something About This Recovery?

    In This Issue:

    Consumer Crush
    To Lead or Not to Lead?
    Got a Market Headache?
    The Weekly Rant-More BLS CPI Sleight of Hand
    Idaho's Back Country

    In September's ProfitScore IQ, I mentioned that we would begin publishing a smaller, fact-filled weekly newsletter called the ProfitScore Weekly Market Watch.  As promised, here is our first publication of that newsletter.  I hope you enjoy its content and that it helps you become a better investor.

  • Why Are Americans Earning Less Than They Did In 1982?

    In This Issue:

    An Update on Our Performance
    Incomes - A Four-Decade Long Report Card
    The Incredible Shrinking Work Week
    The Curious Case of Hourly Earnings
    What a Difference a Week Makes
    What's a Buck Worth?
    Incomes Just Don't Buy What They Used To
    Wow, I Didn't Know That!
    Questions and Comments
    Take My TV Challenge

    Tuesday, September 14th marked the first anniversary of the collapse of Lehman Brothers.  This historic event almost brought our financial house down and exposed a multitude of inherent Wall Street vulnerabilities in the process.  Only time will tell if the government response of throwing trillions at the problem to bail out industry giants like Fannie Mae, Freddie Mac, Citigroup, Bank of America and AIG, deemed "too big to fail," was the right move.


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