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...]
Market Comment Q4 2018
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...]
Market Comment Q3 2018
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...]
Market Comment Q2 2018
Disclaimer: I comment on our current political drama as it has significant implications for our thinking as long term investors. Significant effort is taken here to not offend anyone’s ideological sensibilities, nor do I wish any ill will to either of our political parties. The hope is for rational, sustainable federal, regional and local policies that strengthen this great American System and grow the pie so that we all prosper. Rising government debt, rising interest rates, tariffs spawning … [Read more...]
Market Comment Q1 2018
In my research on cognitive bias, heuristic and brain fallacies I have been constructing a manual that I hope to eventually publish. Here is a brief except of recent material… Thank the Critic And now that you don't have to be perfect, you can be good. John Steinbeck The trouble with most of us is that we’d rather be ruined by praise than saved by criticism. Norman Vincent Peale When someone offers constructive criticism, questions your premise or flat out suggests that you are … [Read more...]
Market Comment Q4 2017
2017 was a big year for investors as the S&P has delivered 19.42%. For complete data see https://www.bloomberg.com/news/articles/2017-12-28/asia-stocks-head-for-muted-open-after-record-high-markets-wrap Less Government, more problems? Bitcoin is a convergence of technology and libertarian economics that provides a means of exchange disconnected from centralized control and government involvement. Satoshi Nakamoto – a mystery figure - published a white paper in October 2008 with ideas … [Read more...]
Market Comment Q3 2017
Understanding the Mysteries of Human Behavior is a Great Course Lecture series by Mark Leary, Ph.D. Garonzik Family Professor of Psychology and Neuroscience Duke University (2012). In Lecture 8, “Why Are So Many People So Stressed Out?” Dr. Leary points out that much of modern day stress emanates from the fact that our lives are built around a “Delayed Return Environment”. This is defined as a world in which “people invest a lot of time and effort each day into tasks that don’t have any … [Read more...]
Market Comment Q2 2017
Photo fascination is taking over the consciousness of a substantial number of people. Wherever you look, people are browsing thru “social media”. Walking and scrolling. Gazing down constantly, the prospects of permanent neck damage seem certain. Dinner, family, meetings and all manner of activity are dominated by the pervasive digital world seen through the small portal of a phone screen. With the riveted concentration of a scientist editing a PhD thesis, people are glued to this “critical” … [Read more...]
Market Comment Q1 2017
Every ninety days or so, I begin to think about what I can write that will fortify the process of building portfolios and create the best balance between risk and reward. All of the material that I produce is intended to give perspective on what is currently happening in our world and yet the message seems to always lead back to the same place. This endeavor of seeking our greatest potential as investors will never be easy. These commentaries are one of the toughest things that I now do with my … [Read more...]
Market Comment Q4 2016
The Law of Small Numbers The surprise outcome of the Presidential election is The Story of 2016. The campaign season was as unsettling and disruptive to the public consciousness as could ever be imagined. The attention of our country and much of the world bore down with such force as to render almost all other important stories lacking proper attention. The political pundits, polling, prediction markets, and statisticians all came together in the fallacious conclusion that we … [Read more...]