Nothing – absolutely nothing – brings a bigger tear to my eye or bigger lump in my throat than our brave American infantry soldiers! Of course, governments always encourage such emotions among their citizens, even France. It is a useful opiate for the taxpayers and the mothers of sons who serve. But, those emotions can also be raw and real. Here is a wonderful…
A cult always ends in either sadness or ridicule. Sometimes, they implode — think about the Jonestown tragedy in 1978. Sometimes, cults just lose their attraction — think about the 1837 classic book by Hans Christian Anderson called The Emperor’s New Clothes. Most money managers insist they never invest in “cult-stocks.” At the same time, they will pay 70 times the earnings-per-share (EPS) to buy…
From my perch overlooking the Chesapeake Bay, where it drains into the Atlantic Ocean, where the first English colonists landed in 1607, and where numerous naval battles occurred during the Revolution and the War of 1812, I have seen all manner of naval vessels, from aircraft carriers to submarines, as they glide silently past our beach. Today, the most common ships passing offshore are container…
2016 started off the year in the wrong direction and quickly picked up speed, reaching the bottom on February 11th. Since then, the S&P 500 is up almost 14%. What happened? We started the year with a worldwide collapse in commodity prices, primarily due to a suspected collapse of China. Since then, there has been a dramatic rise in commodity prices, including oil, steel, and…
It is hard enough to legislate or regulate behavior at any time, but it is almost impossible when wearing blinders. No question, it is a heart-breaking waste of life when someone intentionally overdoses themselves with painkillers. Therefore, we have made access to painkillers much more difficult for everybody. It is far better for more people to suffer pain, as long as we keep a certain…
Nice guys don’t always finish last! So far this year, bank stocks are down about 6.4%. Revenues are down about 10%. J.P. Morgan was down 3%, Bank of America was down 7%, Citigroup was down 11%, and Morgan Stanley was down 21%. Oh, yeah . . . and Goldman Sachs was down 40%.
You will recall there are two types of market analysts, i.e., technical and fundamental. To a technical analyst, they can see the future by using charts and graphs. To a technical analyst, looking at this chart tells them the market is behaving normally and should go higher: You can see there is considerable room for the Dow to rise before it hits the red resistance…
Even in an age of cynicism, hope sometimes still triumphs over wisdom. Can you believe — there were actually some investors who hoped something constructive would come out of the Doha conference of oil-producing nations. Fat chance! In a market glutted with over-supply, everyone could see production cuts are necessary. Of course, there was no agreement on who would bear the pain of production cuts,…
Sometimes, my inner Mr. Spock fails me. (You’ll recall him as the analytical, logical, and unemotional character in the classic Star Trek series.) I try to channel him on any analytical work that I do, but my inner-Spock failed me when studying the problem of Puerto Rican bonds. Puerto Rico is a small country of only 3.5 million people, whose government has issued an astronomical and…
There is a huge investment bank that just agreed to pay a $5 BILLION penalty for its actions in selling mortgage-backed-securities — you know, those securities that ignited the global financial crisis in 2008/9. (In my less-than-humble judgment, they escaped blame far too easily.) Still, they have a great research department, which predicts: 1. The S&P 500 will rise about 2.5% over the next twelve…
As a CERTIFIED FINANCIAL PLANNER (R) professional, I approach the subject of long-term-care for the elderly very seriously. There is little room for humor in this subject, but there is SOME. Say you are an older senior citizen and can no longer take care of yourself and the government says there is no Nursing Home care available for you. So, what do you do? You…
The mysterious release of 11.5 million pages of confidential documents from a Panama-based law firm specializing in offshore trusts has, once again, focused attention of this murky world of money-on-the-run. The popular image of such offshore trusts is disloyal Americans hiding money from the IRS. That is seldom the case anymore, as the IRS requires disclosure of all such interests and imposes draconian criminal offenses…
Like fashion, some investment strategies become stylish for a while and then fade away. A hot strategy over the last few years is called “factor-investing.” It is based on the notion that investment performance can be improved by slavishly adhering to certain base beliefs. For instance, there are several studies that show small-cap stocks perform better than large-cap stocks over time (but don’t ask about…
For those long-suffering readers who want to read my quarterly column for Inside Business, it lives here: http://pilotonline.com/inside-business/flinchum-q-the-snapback-quarter/article_8a03eeff-c6dd-5750-80ca-966bd45c2059.html
Another reader asked me to discuss the new Department of Labor (DOL) requirement that IRAs be subject to the Fiduciary Rule, rather than the Suitability Rule. Suppose you and your financial advisor decide that your portfolio needs a mid-cap growth mutual fund, but one of the funds offers an all-expense trip to Hawaii for advisors IF they put your money into that particular fund. Under…
A reader requested that I explain the controversy about “tax inversions” but without wading through a bunch of numbers. That’s a tough assignment, but here goes: A tax inversion occurs when a large company in a high tax nation buys a smaller company in a low tax nation and changes their headquarters to the low tax nation. (They don’t actually move their headquarters, just formerly…
If it is the first Friday of the month, then it must be “Jobs Friday” when the Bureau of Labor Standards releases its monthly employment report. Today, we learned that the American economy produced 215 thousand jobs last month, which is slightly more than expected. The new jobs are largely (80%) in the service sector. The manufacturing sector actually lost 29 thousand jobs. Construction and…
