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Our 2015 picks have lost an average of 6% since publication, versus a 2% loss for the Standard & Poor’s 500 index.

Half of our stocks outperformed, including Gilead Sciences (GILD), Royal Caribbean Cruises (RCL), and Boeing (BA). But our stinkers stunk more than our stars shined (see table below). Engineer Fluor (FLR) slipped on falling oil investment. Macy’s (M) led a wrong-way parade by department stores. And Micron Technology (MU), a memory-chip maker we’d rather forget, proved that even oligopolies can look crowded when end markets turn weak.

In 2016, we expect that the broad U.S. stock market will fare better, if not shine. The S&P 500 looks fully priced at 17.5 times projected 2015 earnings, and, during the past two quarters, earnings declined slightly versus a year earlier. But that is due to a crash in oil profits. Excluding energy, earnings are rising at a 5% clip. Assuming similar growth next year, with a steady price/earnings ratio and 2% in dividends, stock investors could end up with a total return in the high-single digits.

For our 2016 picks, tempted as we are by Micron, we’re not waiting for a comeback. Patience, wrote Ambrose Bierce, is a minor form of despair disguised as a virtue. Our sole holdover, General Motors (GM), modestly outperformed on a late-year rally. We’re upgrading our airline to Delta Air Lines (DAL) from American Airlines Group (AAL) and swapping Alphabet, which we still like a great deal, for Apple (AAPL). Videogames and zombie shows are in. Anything oily is out. We’re trading Gilead—whose best-selling drug is so effective that treatments could peak in a year or two as more patients are cured—for Celgene (CELG), which is also highly dependant on a single drug but has much better growth potential. There are no department stores, only a druggist and a sneaker merchant. Sprawling Bank of America (BAC) is gone, replaced by steady grower Discover Financial Services (DFS). And we’re adding some housing exposure in the form of flooring specialist Mohawk Industries (MHK).

AMC Networks

AMC Networks (AMCX) sells for 16 times projected 2015 earnings, a discount to the broad market and to other stand-alone cable-network firms, like Discovery Communications (DISCA) at 17 times earnings. One reason is that AMC’s fortunes are closely tied to its zombie thriller, The Walking Dead, which is halfway through its sixth season. If the undead fall out of favor, shares would surely suffer. In the short term, that exposure is a nice problem to have. Recent ratings for the series have been among the best in its history. Earnings per share are expected to soar nearly 40% this year on the debut of a companion series, Fear the Walking Dead, which also had blowout numbers. The two Dead shows, along with Better Call Saul, a Breaking Bad spinoff that aired earlier this year, are the three best series season debuts ever among adults 18 to 49, on broadcast or cable. Next year, Fear gets 15 episodes, up from just six this year. Wall Street is predicting another 13% earnings gain, and estimates have been rising.

One way for AMC to solve its problem of revenue dependance is to sell to a bigger media player. The buyer would get hot shows with plenty of young viewers that advertisers like to reach, and shareholders would get a premium price. Last February, the company named investment banker Gregg Seibert as vice chairman, perhaps signalling a rising interest in deal making.

The old-fashioned fix for hit-dependence is, of course, more hits. That takes longer, but there are promising signs. Into the Badlands, a dystopian martial-arts series, debuted in November to solid ratings. Preacher, a highly anticipated shoot-’em-up based on a cult comic book, comes out in mid-2016. Even without a deal, shares could return 20% over the next year if earnings estimates continue to rise and AMC continues its recent habit of beating them by double-digit percentages.

Apple

The outlook for Alphabet remains bright. It’s hoovering up ad dollars as they shift to online and mobile, and its YouTube streaming business is quietly becoming bigger than Netflix. Earnings could double by the end of the decade, making 27 times this year’s projected earnings a square deal for shares. But Apple sells for just 12 times earnings for its fiscal year ended in September. It sits on cash and securities worth more than all but a dozen or so big U.S. companies. Subtract the cash and securities per share from the stock price, even with a haircut for repatriation tax on the overseas portion, and the P/E falls to single digits.

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Apple will have a difficult time dreaming up a more lucrative gadget than the iPhone, and growth there looks sure to slow. The smartphone market in general is becoming saturated, and while the iPhone 6 and now 6s have offered an obvious reason to upgrade—a long-awaited shift to larger screens—it’s unclear, as always, what will make the next model a must-have. Earnings for Apple are projected to rise at only a high single-digit pace over each of the next two years. But consider two things. First, that’s the kind of growth investors get from General Mills (GIS), which goes for 20 times earnings and carries net debt, not a cash surplus. And consumers can switch from Cheerios to Raisin Bran without having to migrate their family photos to a new platform.

Second, investors shouldn’t count out Apple exceeding growth expectations. It has beaten earnings estimates for 12 quarters running. The consensus for its fiscal year through September 2017 has been rising—understandable, considering the success of the iPhone 6s. But estimates for the following year have been rising, too. The valuation sets the bar low; we think that Apple will hop over. Look for a 20% gain over the next year, along with a rising dividend.

Celgene

Celgene’s main risk is a little like AMC’s zombies. It will generate more than 60% of its revenue this year from a single medicine called Revlimid, used primarily to treat a type of cancer called multiple myeloma. But Revlimid is gaining regulatory approval for an expanding number of uses. It has plenty of growth potential overseas, and shows promise in combination therapies. And it has more than a decade of remaining patent protection. Analysts predict double-digit yearly revenue growth for Revlimid through the end of the decade.

By then, Celgene is expected to have four drugs with yearly sales in the billions of dollars, versus just Revlimid today. And a robust pipeline of medicines in development provides ample opportunity for new successes. Management has set a goal of $21 billion in yearly revenue by 2020, up from a projected $9.2 billion this year. If it’s successful, two things are likely to happen. First, Revlimid’s contribution is likely to drop below half of revenue by then. Second, earnings per share could more than double, as Celgene’s growing size offers better leverage on its research and marketing expenses. Shares sell for 22 times this year’s earnings consensus—inexpensive considering the growth outlook. Bristol-Myers Squibb (BMY) is expected to increase earnings at a similar pace, and it goes for over 35 times earnings. Eli Lilly (LLY), a slower grower, goes for 25 times.

CVS Health

CVS Health (CVS) is a long-term winner, returning more than 14% a year over the past decade, double the yearly return of the S&P 500. It has sold off from over $110 this past summer to a recent $93, presenting a buying opportunity. The decline stems in part from management last quarter issuing 2016 earnings guidance below Wall Street expectations. Even so, it implies earnings per share growth of 10% to 14% next year. Shares now sell for 16 times projected earnings for the next four quarters, down from close to 20 times earlier this year.

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The company remains at the center of trends that could keep earnings growing at a double-digit pace through the end of the decade. Increased medical-plan coverage is driving more prescriptions. So is the aging of the baby boomers. Medical plans are looking to save on drugs, and some are turning over more business to drug-plan managers like CVS’ Caremark. Patients looking for savings, including those who remain uninsured, can take care of basic health-care needs through walk-in clinics, like CVS’ Minute Clinic chain. The stock’s dividend yield is unremarkable at 1.5%, but payments are expected to grow more than 60% cumulatively over the next three years.

Delta Air Lines

Delta has been outperforming other legacy carriers on operational metrics like its on-time flight percentage and its scarcity of cancellations. Those things don’t show up on an income statement—at least, not right away. Over time, good performance on those measures tends to lure business fliers who are highly averse to wasting time, and are also fairly indifferent to paying premium prices. In a recent survey of corporate travel managers, Delta beat its rivals for a second consecutive year. That sets up the company to gain share in a lucrative part of the market.

There are other things to like about Delta. It has shown restraint on capacity growth, announcing overseas cuts that could boost margins in weak markets. And its fuel-hedging program has delayed some of the benefits of a plunge in fuel prices, giving investors something to look forward to. In 2016, earnings per share are expected to climb 24%. Estimates have been rising. Shares sell for less than 11 times this year’s projected earnings. They could return 20% in a year even if the valuation slips. Over the long term, airline valuations look likely to rise as the much-consolidated industry becomes a source of more-stable profits.

Discover Financial Services

Like CVS, Discover has trounced the broad market over the long term but sold off recently. It’s down more than 15% this year. Costs rose early in the year in part due to one-time expenses related to anti-money-laundering efforts and other regulatory concerns. Analysts predict an offsetting decline in expenses next year. Don’t confuse Discover with a company that’s primarily in the business of running a credit-card network, like Visa (V) and MasterCard (MA). It’s basically a credit-card lender, like Capital One Financial (COF), that runs its own network to gain a competitive advantage.

By saving on network fees, Discover can offer attractive card rewards, including a popular cash-back program. Any card lender can offer cash back, of course, but being too aggressive risks hurting margins. Discover has grown its portfolio of credit-card loans much faster than big banks have in recent years. And it has done so with industry-leading returns on capital. Rising growth could be on the way. Early this year, Discover went on a marketing spree. Last quarter, it reported its best card growth since 2007. Historically, new-card growth and loan growth have been closely correlated. In a November note to investors, Morgan Stanley analyst Cheryl Pate predicted accelerating loan growth within six months. Meanwhile, defaults remain low. Shares sell for less than 10 times projected earnings for the next four quarters, down from 12 times at the end of last year. They could rise 20% on a combination of earnings growth and a valuation rebound. The dividend yield is 2%.

Electronic Arts

Videogame maker Electronic Arts (EA) is the priciest stock on our list at close to 23 times projected earnings for its fiscal year ending in March. We like that it has been demolishing earnings estimates of late, and that remaining estimates have been rising. Earnings have a shot at doubling by the end of the decade.

Electronic Arts is best known for annual sports hits like Madden NFL and shooters like Battlefield. It’s also doing well at the moment with Star Wars Battlefront, just days ahead of a new release in the beloved film franchise. In coming years, the company stands to benefit not just from what gamers buy but how they buy it. Digital revenue topped store-shelf revenue for the first time, in the company’s fiscal year ended March. That includes full-game downloads, in-game purchases, and advertising. Rising digital delivery has done wonders for operating margin, which has more than doubled in three years, to 25% last fiscal year. That is unlocking more free cash flow to be spent on share buybacks and game development.

EA says it has more than 300 million registered users in over 200 countries. Overseas, it stands to benefit from a gradual rise in leisure spending. Its revenues are diversified among gaming platforms, including consoles, personal computers, and mobile devices. Next year, it should benefit from falling prices for the Xbox One and PlayStation 4, and corresponding growth in the user base.

Foot Locker

Barron’s has recommended Foot Locker (FL) shares several times in recent years, going back to 2009, when the shares traded for about $10. They recently fetched $64, up 12% since our most recent story (“Foot Locker: Still Running Fast,” March 9). They hit $75 in September, and could regain lost ground and then some over the next year.

Foot Locker is benefitting from a long shift toward casual and athletic fashion. It also has a close relationship with Nike (NKE) and secures plenty of exclusive shoes, which helps protect the business from being undercut by Amazon. Nike shares have jumped 26% over the past six months on stellar earnings reports. That stock goes for over 30 times earnings, reflecting investor expectations of rapid growth for years to come. Foot Locker shares, at less than 16 times earnings, offer inexpensive exposure to Nike’s success. The retailer is also helping itself with store remodelings and a turnaround of its Lady Foot Locker chain. It has invested in recent years in Europe, where footwear sales are highly fragmented. That could pay off when Europe’s economy rebounds. For now, Wall Street predicts low-double-digit earnings growth over the next two years, and Foot Locker has made a habit of hurdling estimates.

General Motors

Earnings for GM are expected to jump more than 50% this year, to $4.76, as the company moves past one-time costs related to faulty ignition switches. In two years, earnings could approach $6 a share. That makes the stock look underpriced at a recent $35. Perhaps more impressive than the upside potential for earnings, however, is the potential bottom for profits during the next downturn in car sales. GM has slashed its debt through bankruptcy restructuring and cut its U.S. break-even point from 16 million yearly vehicles to fewer than 11 million. The recent pace of sales is over 18 million. During the next downturn, assuming a sales decline of ordinary size, earnings are likely to remain solidly positive, say $3 to $4 a share.

As investors gain confidence in GM’s improved earnings stability, they could award the stock a valuation more befitting an healthy cyclical business. A rise to 10 times earnings would put shares at $48 based on this year’s estimate, for a gain of over 30%. That doesn’t include next year’s estimated earnings growth, pegged at 13%. GM says that it will break even in Europe by then, and expects to continue to generate solid profits in China. Shares yield 4%.

Mohawk Industries

Mohawk Industries is a leading flooring seller with a hand in carpet, wood, tiles, laminate, and so on. Over the next year, the company stands to gain from a fall in raw-materials prices, an earnings boost from acquisitions, and rising market share. It’s also a bet on a continued recovery for U.S. housing. Housing starts look healthy, and permits are rising. The Federal Reserve has signalled its intention to begin raising its benchmark fed-funds interest rate as soon as this month. The impact on mortgage rates, which are tied more to longer-term yields, could be minimal. And a slight rise in mortgage rates could help motivate potential buyers who’ve been dawdling. Mohawk trades for 19 times earnings. Profits are expected to grow 17% next year.

It has been a rough year for Mosaic, the $11 billion market-cap miner and producer of phosphates and potash, key components of agricultural fertilizers.

The stock (ticker: MOS) has fallen more than 40%, from a high near $54 in February to $30.88 last Friday. The Plymouth, Minn.—based company’s business has been hit by several issues, most of them macroeconomic, as we’ll see below. The shares almost are back to their 2007 level, after a drop that nearly erased their entire progress in the bull market since the spring of 2009.

First, the problems. As is the case for many companies with a large international revenue base—45% of Mosaic’s sales are outside of North America—the strong dollar has been painful, and probably will for a little while longer. Also, many believe that potash mining capacity remains too high.

The big decline in agricultural commodities, like soybeans and corn, has hurt farmers who buy those fertilizers to increase yield. In the U.S., for example, farm income is estimated to fall to $100 billion this year from more than $120 billion last year. Meanwhile, plunges in resource commodities, such as oil and iron ore, among others, have weakened emerging market economies. Seven of the 10 biggest importers of many fertilizers are countries like China, India, and Brazil.

For the patient contrarian investor, however, when things look gloomiest often turns out to be a good entry point for a well-run company that has a strong track record, produces essential products, and offers a sturdy balance sheet.

In the first nine months of 2015, Mosaic’s sales were flat at $6.7 billion, but thanks to a reduction in expenses, operating income was $1.07 billion versus $988 million in the corresponding 2014 period, excluding certain one-time items. Net income rose to $2.33 per share from $1.72.

Despite no shortage of challenges, says John Buckingham, the chief investment officer of Al Frank Asset Management, the company still managed to produce a good bottom line. He calls Mosaic one of his favorite stocks, and AFAM owns a stake.

Its business is now cyclically depressed, but has long-term growth potential as the world population continues to increase. There’s a limit to the world’s arable land, and “people have to eat,” he points out. Farmers, therefore, must raise the output, or yield, of existing acreage, and the main way to do it is through fertilizers.

Fertilizers are difficult to substitute for, so there’s a nice moat there. While there’s an oversupply of potash, in particular, the typical rational industrial reaction will take place over time: Net potash capacity will contract, as expensive mines are closed and new ones come on-line.

The valuation seems attractive here. Compared with the market, peers, and its own history, Mosaic trades at a discount on price-to-earnings, price-to-sales, and price-to-book, Buckingham notes. For example, the stock’s P/E ratio is 10.6 times consensus analyst estimates of $2.93 next year, which would be essentially flat with expectations of $2.89 this year. Mosaic’s long-term P/E median is 14 to 15 times. It has debt of $3.8 billion, for a debt-to-equity ratio of about 40%.

As a cyclical business, the fertilizer producer doesn’t deserve a market multiple of 16 to 17, he argues, but the current P/E is too low, given Mosaic’s long-term strength. At this price, either its earnings are “about to fall off a cliff,” or, more likely, investors will return to the stock, he maintains.

We agree. It won’t take much of a rise in the global economy to revive this stock. Investors who seed their portfolio with Mosaic shares could reap a respectable yield.

But much more is said against the deal. This merger also is “unpatriotic,” because it could be fiscally dangerous to U.S. tax collectors.

“For too long, powerful corporations have exploited loopholes that allow them to hide earnings abroad to lower their taxes,” says Hillary Clinton from her perspective as the leading Democratic contender for the presidency. “Now Pfizer is trying to reduce its tax bill even further.”

Bernie Sanders, who is the prospective also-ran, goes further, demanding that President Barack Obama block the merger, though he hasn’t explained how.

Most Republicans say the deal is symptomatic of a tax system badly in need of reform and lower rates, which is predictable, but insufficient. Donald Trump, however, gave a quote worthy of a Democrat: “The fact that Pfizer is leaving our country with a tremendous loss of jobs is disgusting.”

Greener Pastures for Cash Cows

No surprise, the job-loss angle was untrue. Pfizer’s administrative headquarters will stay in New York, and there will be no new incentives to move research or manufacturing—unless an angry government creates some.

The merger is structured to allow Pfizer to undertake a corporate inversion, which Obama has called an “unpatriotic tax loophole.” Allergan’s corporate address is Dublin, a land of elfin charm and dwarfish taxes on corporate income—12.5%, compared with the maximum 35% federal rate in the U.S. Pfizer is taking over Allergan, but it will invert the paperwork to make a new home in Dublin for tax purposes.

Allergan, by the way, is itself the product of an inversion: Actavis, a U.S. company, acquired Warner Chilcott and its Irish citizenship in 2013 and then acquired Allergan, also a U.S. company, and adopted its name.

The merged company’s cash cows, such as Lipitor, Viagra, and Botox, will graze around the world, with Pfizer paying corporate income taxes in each country where its income is earned. It will pay tax in Ireland, of course, but only on its Irish income. And it will pay tax in the U.S., but only on its U.S. income.

As a U.S. company, Pfizer has been paying taxes on its American income, but it also can be made to pay U.S. corporate income tax on any earnings brought home from anywhere else in the world.

Congress has allowed companies to avoid tax on profits “indefinitely” invested abroad. As of the end of 2014, U.S. companies in the Russell 1000 index reported accumulating more than $2.3 trillion of such profits, untouched by U.S. tax. As of the end of 2012, Pfizer had accumulated $24 billion of foreign earnings, according to a Senate investigation.

Since the U.S. has the highest corporate tax rate in the industrialized world and is home to many multinational businesses, U.S. corporations have the most to lose if their home country gets tougher on taxes. More and more of them are deciding that what they need is a new home.

Details, Details

American taxation of corporate income is above all a whimsical undertaking. There is no moral code that says how much is too much. The only policy is that of Jean-Baptiste Colbert, minister of finance for Louis XIV: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers, with the smallest possible amount of hissing.”

In the U.S. Congress, definitions of income and expense inflate and deflate with the political winds. Dividends may be taxed or given a tax exemption. So may corporate borrowings and the interest on them, and so may capital gains. Taxes are applied differently to different types of businesses.

The one constant is that doing business across a border requires hiring another squad of lawyers. As importantly, the U.S. taxing authorities also need lawyers to draft legislation and write regulations and meet with the corporate lawyers. And lawyers are just the beginning: Don’t forget auditors and accountants and consultants and fixers and lobbyists and bagmen and persons of no obvious function whatsoever. Employment of these useless people on both sides of the table is a cost of doing business. Carrying them cuts profits, dividends, and capital gains.

Thus, the American worldwide tax system penalizes U.S. companies’ foreign operations. It does not raise taxes on foreign companies operating in the same countries. Remember this about the Pfizer deal and all other inversions: Whether it’s based in Ireland or the U.S. or Elbonia, the new company will pay the same taxes on profits earned in the U.S.

Although nobody ever seems to ask why Congress wanted to make American companies uncompetitive, it’s obvious: Congress wanted more revenue and didn’t care about the consequences.

Race to the Bottom

Many who deny that corporations are composed of people, and so refuse to allow corporations the same freedom of speech as people, are eager to demand that U.S. corporations be patriotic when it comes to paying exorbitant taxes.

They also don’t understand that corporate income taxes are hidden taxes on people. Businesses collect taxes from their customers by raising prices. If they don’t, they collect taxes from their shareholders by reporting lower earnings and cutting dividends. If they don’t do either one, they go broke. Can that be what the government wants?

White House spokesman Josh Earnest edged close to that cliff: “It may serve the corporate bottom line of some of these companies, but it certainly doesn’t strengthen the economy of the United States.”

Earnest forgets that profits are the economic strength of the country. As Congress makes the tax laws and the Treasury Department writes the regulations under the political direction of the president, strengthening the economy is their job. The job of a corporation like Pfizer is to survive in a competitive world economy, while trying to avoid being nibbled to death by politicians.

The Stoxx Europe 600 index’s one-day drop of more than 3% wiped out the previous month’s gains. Still, as Draghi himself insisted, investors might have missed the point that the ECB will be accommodative for the long haul. Katrina Dudley, a portfolio manager with Franklin Templeton’s Franklin Mutual European fund (ticker: TEMIX), sees the bright side of the central bank’s efforts. “The European recovery is still nascent, so it needs an accommodative policy going forward,” she says, pointing out that euro-zone inflation remains well below the ECB target of nearly 2%. The European Union said Wednesday that prices had risen only 0.1% in November from the level a year earlier, missing forecasts of 0.2%.

Still, Dudley cautions, “The days of blindly investing in stocks are a long way behind us,” and choppy markets have pushed investors toward safer, big-name stocks recently. “People are reluctant to move from low-yielding but steady investments, such as bonds because equities have been volatile,” she adds. “The disparity between growth and value equities is at its highest since the financial crisis.”

The good news: Investors willing to take some risk can find undervalued assets. Dudley likes well-run cyclical businesses, especially those that have restructured. She typically invests over three to five years. Her picks include Italian utility Enel (ENEL.Italy) and Swiss cement-maker LafargeHolcim (LHN.Switzerland).

ENEL HAS BEEN HURT by falling fuel prices and competition from renewable energy. Last month, it launched a strategy aimed at simplifying its structure and promoting growth. This includes taking full ownership of its Enel Green Power unit. It also promised to sell €6 billion ($6.53 billion) in assets. In fact, there isn’t a straight correlation between oil-price drops and electricity’s retail price. “Italian consumers are still paying for costs linked to decommissioning Italian nuclear plants decades ago,” she says.

Investec analyst Harold Hutchinson has Enel at a Buy with a €4.50 price target. The Green Power integration, he says, “has the advantage of bringing Enel’s main growth engine and its commercial culture under Enel’s full control.” He estimates that Enel’[s price/earnings ratio will be 13.3 this year, rising to 13.7 next year, before slipping to 11.4 in 2017. Its shares closed at €4.07 Friday.

LafargeHolcim was formed from the merger of France’s Lafarge and Switzerland’s Holcim, both of which were battling overcapacity and sluggish demand. The deal created a global giant with a market value of 33 billion Swiss francs ($32.93 billion). “LafargeHolcim is committed to generating free cash flow, has a revamped management team, and demonstrated it’s listening to shareholders,” Dudley says.

Vontobel analyst Christian Arnold rates LafargeHolcim Hold with a CHF60 price target. The company faces demand issues in key markets, particularly in China, but he “believes in upside potential beyond 2018 targets, thanks to a market-growth recovery and further cost optimization.” LarfargeHolcim shares closed at CHF52.50 Friday.

A Schroders commodity fund that was once the largest of its kind in Europe has suffered substantial outflows from US investors on the back of the poor performance, raising questions about the fund’s survival.

Large investors, including Ocers, the Californian pension scheme, have pulled money from the UK asset manager’s Schroder Alternative Solutions Commodity fund, which has suffered from the recent commodity market rout.

The outflows have caused its assets to fall from $4.6bn at its peak in 2010, to $803m. The expectation is that further outflows are likely.

The Vermont state retirement fund last month interviewed three investment companies with a view to potentially terminating its $117m investment with Schroders.

The $3.9bn pension scheme placed the fund “on watch” after Robert Howell, manager of the Schroders commodities fund since it was launched in 2005, left the company last year.

Stephen Rauh, chairman of the Vermont pension investment committee, said the scheme would decide whether “to terminate [Schroders] or hire a replacement manager” in January.

Michael Dobson, chief executive of Schroders, said in July: “The very weak performance in commodity markets [is] causing institutional clients, principally from the US, to withdraw from that asset class. I think that will continue for a while.”

The performance of the fund is down 20 per cent in the first 11 months of 2015, and has fallen 47 per cent over the past five years. It has underperformed its benchmark so far this year, as well as on a one-year and five-year basis.

The chief executive of a large hedge fund company, who asked to remain anonymous, said: “The Schroders [alternative solutions] fund was massive. Not having the ability to go short in commodities has caused issues and they have lost a lot of money. The [funds that] will survive will be the specialists.”

Last year Schroders was forced to close its Opus commodities fund, which contained $2.3bn at its peak, after assets fell to hundreds of millions of dollars. David Mooney and Cédric Bellanger, co-portfolio managers of the fund of commodities hedge fund, have since left the company.

A spokesperson for Schroders said it has “no plans to close the [alternative solutions] fund”.

She added: “As with everyone in this sector we have seen outflows due to the downturn in the sector. Pension funds have moved away from commodities. This started two years ago.”

Many industrial and agricultural commodity prices have fallen significantly this year, with sugar prices down 8 per cent, copper prices down more than 20 per cent, gold down 9 per cent and iron ore prices down 30 per cent. The oil price has fallen by half since mid-2014, to around $43 a barrel.

Despite these pressures, other mutual funds in the sector have grown. The Goldman Sachs commodity fund known as GSQ has increased from $740m in 2012 to $1bn today.

Credit Suisse’s commodity allocation fund has also grown from $723m in 2011 to $1.4bn, making it Europe’s largest commodity fund today, according to figures from Morningstar, the data provider.

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Earth Globe - Public DomainAnyone that tries to tell you that a global financial crisis is not happening is not being honest with you. Right now, there are 27 major global stock markets that have declined by double digit percentages from their peaks earlier this year. And this is truly a global phenomenon – we have seen stock market crashes in Asia, Europe, South America, Africa and the Middle East. But because U.S. stocks are only down less than a thousand points from the peak earlier this year, most Americans seem to think that everything is just fine.

The truth, of course, is that everything is not fine. We are witnessing a pattern similar to what we saw back in 2008. Back then, Chinese stocks and other major stock markets started crashing first, and then U.S. stocks followed later.

And it appears that we may have entered the next leg down for markets in the western world this week. The Dow was down another 252 points on Thursday, and all of the major stock indexes in the U.S. are now negative for the year except for the NASDAQ. Unless there is a major turnaround in the coming weeks, the six year winning streak for U.S. stocks is likely over.

But when you step back and look at what has been happening globally, a much more ominous picture emerges. I spent much of the afternoon looking at stock market charts for the largest economies all over the globe. What I discovered was financial carnage that was much worse than I anticipated.

It turns out that there are 27 major global stock markets that have fallen by more than 10 percent from peaks that were set earlier this year. If you want to verify this information for yourself, just go to Trading Economics. As you can see, many of these stock market declines have been quite impressive…

1. China: down more than 30 percent

2. Saudi Arabia: down 26 percent

3. Germany: down about 13 percent

4. United Kingdom: down close to 12 percent

5. Spain: down 15 percent

6. Brazil: down more than 22 percent (13,000 points overall)

7. Malaysia: down 17 percent

8. Turkey: down 16 percent

9. India: down close to 12 percent

10. Chile: down 11 percent

11. Columbia: down about 30 percent

12. Peru: down more than 40 percent

13. Bulgaria: down more than 20 percent

14. Greece: down more than 30 percent

15. Poland: down about 19 percent

16. Malaysia: down 10 percent

17. Egypt: down 32 percent

18. Indonesia: down 18 percent

19. Canada: down 12 percent

20. Ukraine: down 45 percent

21. Morocco: down 13 percent

22. Ghana: down 17 percent

23. Kenya: down 27 percent

24. Australia: down 13 percent

25. Nigeria: down more than 30 percent

26. Taiwan: down 15 percent

27. Thailand: down 20 percent

We have not seen numbers like these since 2008, and trillions of dollars of stock market wealth has been wiped out globally. So the “nothing is happening” crowd is simply dead wrong. Stocks are already crashing all over the planet. Just because the big U.S. stock market crash has not happened quite yet does not mean that a major global financial crisis is not happening.

But do you know what is crashing here in this country?

Junk bonds.

At this point, yields on the riskiest junk bonds have risen to levels that we have not seen since the last financial crisis. As I have discussed repeatedly, yields on junk bonds spiked dramatically just before the stock market crash of 2008, and now it is happening again…

Yield On CCC Bonds - Chart from Federal Reserve

This is precisely the kind of behavior that we would expect to see if a major U.S. stock market crash was imminent. Personally, I watch the junk bond market very, very closely because it is such a key leading indicator. And according to Jeffrey Snider, it appears that “something” is starting to cause junk bonds to sell off at an alarming pace…

There isn’t much as far as confirmation, but it increasingly appears as if “something” just hit the triple hooks (CCC) in the junk bond bubble. At least as far as one view of it, Bank of America ML’s CCC implied yield, there was a huge selloff that brought the yield to a new cycle high (low in price) above even the 2011 crisis peak.

But just like in 2008, a lot of people will not heed the warnings because they don’t have the patience to watch long-term trends play out.

We live in a society where we expect constant instant gratification. We have instant coffee, video on demand and 48 hour news cycles. If something does not happen immediately, most of us quickly lose patience.

On my other website, I include a lot more stories about things that are trending in the news. For example, earlier today I wrote about the horrible shootings in San Bernardino, California and I explained why I believe that Islamic terror is now more of a threat to the American people than ever before.

But on this website I like to take a broader view of things. For months, I have been warning that conditions were perfect for another major global financial crisis, and since that time events have been unfolding in textbook fashion.

And as you can see from the numbers above, we have already entered a new global financial crisis. If you tried to tell someone in China, Brazil or Saudi Arabia that a financial crisis was not happening, they would just laugh at you. We need to start learning that the world doesn’t revolve around the United States.

Of course the U.S. is heading for tremendous difficulties as well. This is something that I covered yesterday. All of the fundamental economic numbers are absolutely screaming “recession”, and yet most of the “experts” are still forecasting good things for the coming year.

Those that do not learn from history are doomed to repeat it. None of the problems that caused the crisis the last time around have been fixed, and most of our “leaders” seem blind to what is happening at this moment even though the exact same patterns that played out in 2008 are playing out once again right in front of our eyes.

If you have been waiting for the next global financial crisis, you can stop, because it is already here.

As we move toward the end of 2015, let us hope for the best, but let us also get prepared for the worst.