The two most practiced schools of investment management are fundamental analysis and technical analysis. Mostly, I practice fundamental analysis, which means I look at the company, how its stock trades relative to the company, how the stock is rated by full-time analysts, how it is impacted by the business cycle, etc. Sometimes, I will take a look at technical analysis. That is the type of…
Back in the Dark Ages, there was a TV commercial for Timex watches that said “it takes a licking but keeps on ticking.” That came to mind Tuesday morning when I heard the latest consumer confidence numbers. Since consumer spending is two-thirds of GDP, it is important to see how confident they are and whether they will increase or decrease their spending. Confidence increased 7.2…
I was a brash young lieutenant who knew everything and was on my first assignment after completing my Special Forces training. He was a wise, older Command Sergeant Major (CSM), which means he was an enlisted man and out-ranked by any brash young lieutenant like myself. Of course, he could have subtly embarrassed me somehow in front of my troops or tolerated me as merely…
Goldman Sachs is a huge investment banking firm, once satirized as a giant vampire squid sucking on the face of mankind. I find nothing about that description to disagree with! However, they do have a great research department, and here are some of their latest projections: 1. GDP growth will sharply accelerate from 1.9% this year to 2.9% next year.2. Unemployment will drop to 6.6%…
Yesterday, we discussed the latest outlook from the National Association of Business Economics (NABE) and Jeremy Siegel of Wharton, both of whom I respect and both of whom are very bullish about the underlying economy. It is now apparent that there is more than just quantitative easing by the Fed that is impacting the stock market. However, the bulls have already been running down Wall…
It is a small secret that I find economics endlessly fascinating. One would expect I would be a member of the American Economic Society, but I found those are the nerdy, academic type of economists who value mathematical purity more than usefulness. Instead, I have been a long-time member of the National Association of Business Economics (NABE). Yesterday, NABE released their latest Outlook, predicting that…
One of the reasons that the U.S. stock market is doing so much better than the U.S. economy is that the U.S. economy is doing so much better than the European economy. The latest data from Europe is not good, with GDP decreasing 0.2% last quarter. Over the last 1.5 years, the GDP has decreased 1.5%. The European GDP is now 3.3% lower than its…
As a white male, it is dangerous to discuss certain issues, and most of us avoid those subjects like the plague. We can never discuss racial issues or gender issues . . . because we are wrong, no matter what we say. But, I can report comments by a female speaker at the conference this week about gender issues. She said women communicate with…
Yesterday morning, I was in Indianapolis and spent three hours listening to a brilliant Italian mathematician speak rapidly in a thick Italian accent, as he discussed numerous, long complex formulas with lots of Greek letters. (You know, the type of formulas that Warren Buffett doesn’t trust.) Listening required absolute focus, and I was exhausted after those three long hours. The short version is that binary…
This is the seventh Mother’s Day that I thought was the last one for my Mother. It is also the first she has spent in hospice care. It is not easy for anybody, especially my Father. She has taught me much about life and death. But, I have been thinking about the dying process – of being between life and death. As an existentialist, I…
Yes, I’m aware that the Dow broke the 15,000 barrier. That’s great! I’m actually more impressed that the S&P broke 1,600. But, I’m most impressed by the fact that the stock market held both levels. This rally is real! The media is paying a lot more attention to the 15,000 barrier than it did when the Dow broke the 14,000 level, and I doubt it…
While most people consider their military experience to be good, most of their memories are bad. Some memories, however, are just plain annoying. My nomination for the most annoying of all military memories is the “IG Inspection.” This is when some field-grade officer from the Inspector General Department comes to inspect the troops. Ostensibly, he makes sure the troops have the equipment they need and…
Conventional wisdom is a dangerous thing. For generations, investors have been told that bonds are always safer than stocks, which is WRONG, WRONG, WRONG! Today, the popular “retirement-date funds” just allocate a greater and greater portion of a person’s portfolio into bonds as they get older, which should be WRONG, WRONG, WRONG! Investors think they are being prudent by investing in bonds — but are…
Recently, I discussed the pervasive nature of advertising in our society — hoping to drive home the point that business wouldn’t spend billions of dollars on it, if it didn’t actually channel consumer behavior. This has generated some interesting discussion; questioning whether it is consistent with an existential viewpoint. You’ll recall the stereotype of existentialism is that individuals live on their own individual and isolated…
At 8:30 AM this morning, Dow futures indicated the stock market would open flat. Within minutes, it indicated the market would gain 100 points as soon as it opened. What happened? Of the 130 economic reports issued each month, the stock market pays the most attention to the monthly Jobs Report. Judging from the sudden jump in futures, you know the report must have been…
There are many schools of thought on economics. For convenience, this blog has always focused on The Big Three. First, there is the Austrian or “Tough Love” school that says budgets should be balanced at all times. Second, there is the Keynesian school that says deficits are good during bad times as long as the budget has a surplus during good times. Third, there is…
Ricky Rash was a 15-year-old kid who committed suicide. His grieving parents wanted to understand what was in his mind before he died. Understandably, they wanted to see what he was saying and doing online. But legally, the online companies like Facebook, Yahoo, etc. could not allow any cooperation. So, what happens to your online world when you die, and should somebody be allowed to…
