A reader left a question that I think is pretty damn good. He asked "what are the variables that I use that allow you to do a forward analysis of an asset with any meaningful probability of being right." As someone who believes in top down management I focus on big picture issues and then try to figure the best way to invest toward the big picture while at the same time building in some sort of counter strategy in case my assessment is wrong. So instead of looking at a stock from the bottom up and saying ok, here is a stock with such and such valuations that will make more widgets next year for a slightly smaller cost and buying it, top down looks at the world for things like supply and demand issues, turning points in cycles or big long-lasting themes as examples. The world ...

Article Source Time to reassess the potential for recent oil price increases to contribute to an economic downturn. The sharp spikes in oil prices associated with the 1973-74 oil embargo, the 1978 Iranian Revolution, the Iran-Iraq War in 1980, and the first Persian Gulf War in 1990 were each followed by an economic recession. However, when oil prices started to rise again five years ago, many of us suggested that things would be different this time, in part because the price was rising much more gradually and so should be less disruptive of consumer spending patterns. Others emphasized that, despite the price increases, oil was still cheaper than it had been historically if you took into account inflation. However, once you include the most recent data, neither of those claims would still be true. Average monthly dollar price of West Texas Intermediate (from FRED divided by ratio ...