Using Veritas to Construct the "Per…

29-04-2017 Hits:23709 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:25126 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:24818 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:26360 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:26157 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:28496 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:17878 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:27349 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:27392 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:27596 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:29326 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:28920 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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In continuing with my rant on investing during inflationary periods (see Reggie's take on investing for inflation parts 1, 2, 3 and 4 for the background to this article)), I am addressing asset performance during periods of stagflation. My team has identified 2 periods of stagflation (high unemployment rate, low GDP growth and high inflation) in the past 40 years - during December 1973-75 and September 1979-82.  Although overall asset class correlation results are similar to those observed earlier during periods of high inflation, with real returns from commercial real estate being the highest amongst all asset classes and agricultural commodities being the most volatile and offering the least protection against inflation, there are some notable difference between periods of pure high inflation and stagflation based on the observed empirical evidence.

 

  1. ·         Although equities as an asset class proved to be a sufficient hedge during periods of rising inflation it has underperformed during stagflation yielding negative real returns. Keep this in mind along with my thesis that we are in a cyclical bear market.
  2. ·         Nearly all the asset classes (except commercial real estate) yielded negative real returns during periods of stagflation suggesting that passive beta strategies during stagflation would not yield and real returns. In other words, you not only have to have your assets actively managed to make enough money to avoid the cost of living from eating into your capital base, the active manager truly must know what he or she is doing. Thus the proliferate and apparently very profitable business of ETFs, mutual funds, hedge funds, mass produced asset management will FAIL to make the average investor money through periods of STAGFLATION! An example of this can be found in the  submission of this inflation investment series that I made to a very popular blog aggregating service, which then distributes content to various outlets across the web. It has been filed and categorized under ETF investing, which is ironic, since the findings of my research strongly suggest that it will be very difficult, if not impossible to successfully outrun stagflation through ETF investing. This is particularly true if one were to attempt to capitalize on the use of the one asset class that apparently outperforms during stagflationary times - commercial real estate. This it because many, if not most, of the institutional (and smaller retail) real estate players that sell access to the public have a) taken on imprudent amounts of debt during the bubble which is b) either choking them or c) being deleveraged with highly dilutive equity injections that is significantly reducing gearing at a time when gearing would be most beneficial, and d) most importantly, significantly overpaid for properties during the bubble while simultaneously planning off of highly unrealistic business projections grounded in fantasy land bubble metrics. One will most likely need to either dabble in the class direcly (direct ownership and management of the asset class (definitely not for amateurs), itself) or retain the services of a truly top notch operator that sidestepped the malaise (ex. moi), an apparent minority, the vast majority of which do not sell access to their services through brokerage firms. Just to be clear, I do not offer any investment services to the public, and am not making any solicitations along those lines.  
  3. ·         Since Treasury Inflation-Protected Securities came into existence during 1997 there is not enough empirical evidence to determine its performance during stagflation. However TIPS have outperformed other fixed income securities during periods of high inflation and is the only asset class under the fixed income category with negative correlation with inflation (between yield and inflation). (Subscribers, please refer to sheet "All time periods Fixed Income" in the accompanying Excel Attachment - Stagflation Data Stagflation Data 2009-06-17 04:00:11 3.02 Mb)

stagflation_chart.gif