In Love with TINA

Paul discusses Market Shadow’s premise for buying stock. While it might look like love, there’s more, or less, going on. 

Courtesy of Paul Price 

In love with TINA (2)

Not Tina (1)

We all have different views of what is most attractive. Some people care less about looks but gravitate to those who offer income and security. Others prefer big capital assets, or shapely ‘double bottoms.’ 

T-bonds and bank certificates of deposit used to be appealing. Their attraction has waned with the aging effects of ZIRP (zero interest rate policies). Shares of stogy old public companies now defy their age. They have once again become market darlings under the new acronym of TINA.

TINA - defined

CD rates Apr. 4, 2013 (2) 

Money markets at twelve basis points? Ugly. Locking in for one, two or five year CDs for a pittance? Unthinkable if you expect to beat the true cost of living index rather than the garbage the BLS feeds the public regarding inflation.

Government bonds are all risk, and no reward… The rates are terrible. 

Treasury Rates Apr. 3, 2013 (1)

It’s not that equities are stunningly cheap. The reality is that they look exquisitely beautiful standing next to all other choices. Never-ending money printing is guaranteed to devalue the purchasing power of dollars, yen and euros. 

Smart investors are courting stocks because of TINA. Maybe it’s not true love, maybe it’s a mixture of settling tossed up with rationalization. But TINA’s the only woman on this desert island and the demand for her is going up. 

 

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Trackbacks

  1. […] Risk in the equity market is substantially lower than risk in fixed income. Especially compared to alternative investment vehicles, stocks are not overpriced (see Think stocks are overpriced? Think again and  In Love with TINA). […]

  2. […] Risk in the equity market is substantially lower than risk in fixed income. Especially compared to alternative investment vehicles, stocks are not overpriced (see Think stocks are overpriced? Think again and  In Love with TINA). […]

  3. […] In Love with TINA. Why love stocks? Because There Is No Alternative.  […]

  4. […] Add the effect of the Fed’s $85 billion per month money printing to record-low yields, and we have all the reasons we need to keep a healthy portion of our net worth in stocks. There really is no viable alternative. (See In Love with TINA.) […]

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