Bubbles and Bottoms 27 May 2019

This being the first weekly instead of monthly edition, i thought i`d start off with some bottoms instead of bubbles, just to keep the positivity going.

Looking at tax receipts, personal current taxes have been steadily on the rise, while taxes on corporate income really seem to have hit rock bottom. Considering that this chart is not measured in percentages, but in Billions of Dollars received, it`s difficult to argue that this will go down to an even lower level than it already is.

Another bottom can be seen in Gold and Silver mining stocks, especially when compared to Utility stocks. This chart shows a perfect double top, which would indicate that mining stocks could increase threefold in 8 months if they follow the previous path!

Going back to my specialty, bubbles, i saw this great chart from Doug Short, showing that the Conference Board Leading Economic Index peaks, on average, 12-13 months before an official recession is announced. What is this leading economic index precisely? it`s an index of indexes, consisting of 10 key variables. Examples are: unemployment rate, unemployment claims, building permits, consumer sentiment index and many others. The fact that this index is still peaking, means that most likely we won`t be ending up in a recession soon (at least a year from now) and if we follow the path of the late 80`s or 90`s, we can be peaking for a much longer period of time.

The market is also not showing any fear, despite December`s pullback. On average, there are 3 times per year when the market pulls back 5% or more. So far this year, we had none.

The last image that i will show you is that of tech IPO`s over the past 3 quarters. You can find the valuation, the revenue and the losses that were made by each company. If you would put all these companies together, you would have 25 Billion in revenue, with 6 Billion in losses.
Not surprisingly, of these 15 companies, only 2 of them make a profit.

I hope you enjoyed this bite-sized newsletter! A big shout-out as usual to all the amazing people who are making these charts and giving them away for free on twitter. Our lives wouldn`t be the same without you, and your contributions are priceless!

Thank you for reading, and don`t forget to stay positive!

Robbert-John Sjollema

The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in this publication is that of the publisher and is subject to change without notice. The information in this publication may become outdated and there is no obligation to update any such information.