Given how touchy people seem to be nowadays we’ll provide some prefacing: The following data is objective and not intended to support any agenda. It isn’t pro/con Trump. It isn’t pro/con tariffs. It isn’t pro/con Wall St. Put down the pitchforks and torches. As Neil Young wrote, “Throw Your Hatred Down.” Whew! OK – with that out [...]
Lately there’s been a lot of noise about an inverted yield curve. What’s that mean and why is it important? MEANING: Typically ST interest rates are lower than LT interest rates. The “yield curve” – a graphical plot of interest rates – would be upward sloping. An inverted yield curve is the inverse. ST interest [...]
You’ve heard it before. Lots of content for the sake of content. Most stuff garbage and a waste of time. We like to pass along the exceptions. We strongly recommend the 9/30/18 shareholder letter from Tweedy, Browne. As always it’s an honest, plain language discussion of markets, economies, results and how value investing fits into [...]
The recent market decline shaved $1.1 trillion off of the combined market cap of Facebook, Amazon, Apple, Netflix and Alphabet (Google). It’s a classic example of reversion to the mean. Outsized tech gains that exaggerated upside returns of the S&P 500 become outsized losses that exaggerate the pain felt by members of the church [...]
Yesterday the IRS announced inflation-adjusted limits for 401(k) contributions, the SS wage base, etc. Highlights and the full technical bulletin may be found here and here.
1990s: Everyone’s buying internet stocks. The companies have no earnings. There are no barriers to entry. I don’t understand what they do. Better buy some stock anyway. 2000s: Everyone’s flipping homes. Interest rates can’t stay this low forever. I have no handyman skills or time to fix up a property. Better buy a few homes [...]
In a world where many seek a shortcut and aim to do what others are doing DoubleLine’s Jeff Gundlach offers some rather simple yet powerful advice in this Forbes interview: Patience is the most important thing... Things take longer to develop and longer to tip over. Weird situations can be held together much longer than [...]
In our instant gratification world it’s important to learn lessons (and there are sooooo many) that teach us what we already know but are quick to dismiss: slow and steady wins the race – always!
Need further proof that the typical retail investor is a contrarian indicator? It's the epitome of the "buy high - sell low" approach. Many thanks to Nick Maggiulli from Of Dollars And Data for this excellent graphic:
When Uncle Sam’s income (i.e. tax revenue) is less than his spending he runs a budget deficit. The Treasury Department sells Bills, Notes and Bonds (i.e. “Treasuries”) to cover the shortfall. Who are the buyers? Who enables the federal credit card? Historically the gap was filled from overseas. Individuals would buy Treasuries due to [...]