- A Stoic’s Approach to Market Turmoil: Spring 2025Significant re-positioning has taken place in investment, commodity and currency markets since the inauguration in reaction to the return of Donald Trump and his subsequent policy pronouncements. In this piece, I will try to summarize what I see and potential outcomes of these policies and how they might impact investors.
- The Trump Trade: Winter 2025With Trump about to take office, many wonder what his presidency may mean for investors. For a long time, the US economy and markets have been mostly independent of whomever occupies the White House, but today the threat of large, widespread tariffs is new, and it could potentially have an economic impact.
- Economic Slowdown: Fall 2024Markets have risen in anticipation of rate cuts by the Federal Reserve. Its rate hiking cycle ended in August of 2023. The stock and bond rallies were especially strong in August as we saw a huge revision to the payroll numbers, which is calculated by the Bureau of Labor Statistics (BLS). That rally was associated with a strong prospect of Fed Funds rate cuts going forward.
- Parimutuel in Perpetuum: Summer 2024Serious long-term investors such as Charlie Munger would cringe at the idea of comparing investing to gambling because they take the process of valuing claims seriously. With investments there are a multitude of variables that factor into pricing and price changes.
- Muscle Memory: Spring 2024In the 1st quarter of 2024 the same dynamics were at play as during the 4th quarter of 2023. Financial conditions were easy amidst rising home prices, stock prices stayed buoyant, and the official rate of inflation eased. Stocks trended upward due to the ‘muscle memory’ of passive, quant and algorithmic investors that mechanically dump money into index funds and programs.
- Munger, Markets and Magnificent 7: Winter 2024Charlie Munger passed away on Nov. 28, 2023 at age 99 — 34 days short of his 100th birthday. Probably best known as Warren Buffett’s business partner in the world’s greatest compounding machine, Berkshire Hathaway, Charlie was one of the greatest minds of the 20th century. His observations and ideas have had a profound impact on me.
- Crosscurrents: Fall 2023Some of the recent developments in markets conflict with each other and are worth examining. Crude oil prices have rallied strongly despite softening global economic data. Stock prices have remained buoyant despite rapidly rising interest rates over the last 3 months. Inflation has remained sticky despite the Fed’s efforts to control it.
- Back to School: August 2023It has been a quiet summer so far. Apart from Fitch’s downgrade of US government debt and Moody’s downgrade of a big chunk of the banking sector, it has been mostly drama-free. However, these developments do highlight more significant long-term issues.
- A Tale of Two Markets: Summer 2023Relative to the S&P 500, the first 5 ½ months of the year have been rough for value investors. The S&P 500 is up 15% year-to-date (as of this writing), but value indexes are up 4% year to date. The S&P 500 does not tell the real story with what is happening with stocks.
- The Investment Environment and Big Risks That Today’s Investors FaceHere are some factors that have the potential to negatively impact individuals’, especially retirees’, personal finances and some general opinions on how to position based on today’s long-term risks/opportunities:
- Bank Bailouts and Moral Hazard: Spring 2023Risk today is higher than normal because of the excesses, leverage and speculation wrought during the long period of suppressed interest rates and money printing since 2008.
- The Importance of Avoiding Large Losses: Winter 2023Where is the value today and what does not carry large downside risks? Almost by definition value tends to be in investments that are under-owned, under-appreciated and widely shunned for one reason or another.
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