...difference of opinion is not a difference of principle. - Thomas Jefferson, Inaugural Address 3/4/1801   We have two classes of forecasters: those who don’t know—and those who don’t know that they don’t know.  - John Kenneth Galbraith   The Great Disappointment is often referenced as March 21,1844 when it was erroneously predicted that Christ was to return and the world as we know it would end. In researching this moment of history, you discover that the prediction was … [Read more...]

BPS: Basis Points or units of a percentage point. A quick google search will define it as: A basis point represents the smallest unit of measurement for interest rates and other financial instruments. One basis point is equal to one-hundredth of 1 percent. The US 10 year bond new yields between 60 and 70 bps...you can lend money to the US Treasury for ten years and get a return of .7%. This low yield has been engineered via complex maneuvering by the Federal Reserve. The Fed works the … [Read more...]

“Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.” ― Karl Popper “... three critical goals: First, we must detect outbreaks that occur anywhere in the world; second, we must protect the American people by stockpiling vaccines and antiviral drugs, and improve our ability to rapidly produce new vaccines against a pandemic strain; and, third, we must be ready to respond at … [Read more...]

The Affect Heuristic  The dominance of conclusions over arguments is most pronounced where emotions are involved. The psychologist Paul Slovic has proposed an affect heuristic in which people let their likes and dislikes determine their beliefs about the world. Your political preference determines the arguments that you find compelling. If you like the current health policy, you believe its benefits are substantial and its costs more manageable than the costs of alternatives. If you are a … [Read more...]

2019 has been a persistently positive year with a final move up in Q4.  For the year, the Dow ended 22% higher, the S&P gained 29%, and the Nasdaq rose 35% For further market coverage, see https://markets.on.nytimes.com/research/markets/overview/overview.asp Long term investors have been rewarded with a significant upswing for 2019. For those that believe in “Get Invested, Stay Invested”, this feels pretty good. Holding diversified mutual funds long term sounds simple, but it may be … [Read more...]

Q3 2019 has been filled with noise and volatility signifying little. The S&P 500 has moved up about 1.2% in the last 90 days. In spite of the instability created by trade threats and rising trade barriers investors are up substantially since 1-1-19. Thru the first three quarters, the market is up nearly 20%. This is quite similar to last year, where gains turned to losses by an historic downswing in December … [Read more...]

The market has just completed the best 1st half performance since 1997. This is quite a rebound the downswing in December 2018. https://markets.on.nytimes.com/research/markets/overview/overview.asp The Fed has undergone a big reversal in posture and interest rate cuts are anticipated as trade conflicts are expected to begin slowing the US and global economies. With 30 year mortgages under 4% it is questionable how much room rates actually have to decrease or what impact these potential … [Read more...]

The Federal Reserve stated on 3-20-19, "In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes." Patient is the key word. That means that interest rate policy will look to continue cheap money for the near term or even longer. Q4 2018 turned dramatically negative as the Fed sent signals that rising … [Read more...]

The rapid downswing of Q4 2018 is shaped increasingly by hordes of techno driven trading firms that have no interest in investing. Oceans of rapid paced money seeking an edge pile on to the selling as markets go negative and likely cause huge overshooting of what actual value warrants. Numerous products designed to make money as stock prices fall facilitate the pile-up of "shorts" and other trading pools seeking advantage. The WSJ noted on 12-26-18 :  Behind the broad, swift market slide of 2018 … [Read more...]

Computers aren’t for voting. Voting by computer sounds really cool and futuristic— if this were 1969. But now that we all have computers, we know that they are, in fact, huge f**k-up machines. They’re like having a compact, silicon version of Gary Busey on your desk— you never know what’s going to happen. I’ll tell you what’ll happen: Some 13-year-old hacker in Finland is going to hand the presidency to Kylie Minogue. You thought the 2004 election was bad— wait until the next one is decided by a … [Read more...]