Mark Twain once said “History doesn’t repeat itself – at best, it sometimes rhymes.” I thought of that when studying this chart, which clearly shows that September has historically been the worst month of the year for the stock market, averaging the years since 1950. The message to investors is “brace yourself for another stomach-churning month.” There’s only one problem. Since 2010, September has averaged…
What could be wrong with this stock? Revenues are down, and it lost $369 million for the first six months of this year. The founder received a pardon from the President of the United States years ago, and even worse, some investment pros think it poses a systemic risk to entire world financial system. Yet, the stock doubled in value this year! One of the…
Colin Kaepernick is another rich NFL quarterback, who wears a football uniform for the San Francisco Forty-Niners. Last week, he chose not to show the basic courtesy of standing for the national anthem, as a protest against continuing racial injustice in America. Dear Mr. Kaepernick, Often attributed to Voltaire in error, it is nonetheless true that “I disapprove of what you say, but I will…
Cartoons can simply entertain the kids when we don’t want to be bothered. Or, cartoons can actually teach us something. Here is one of the latter: This cartoon shows a bear market on the left and a bull market on the right. The bulls have small gold rings in their nose, while the bear has large solid gold teeth, containing more gold than mere gold…
In 2009, ABC News presented some interesting research into the relative dental health of different sections of the country. They found the worst dental health in America was in the Appalachian region. This poor state of dental health is primarily due to a condition called “Mountain Dew Mouth,” a result of too many sugary drinks and too little dental care. As I have a large…
It is hard to defend an obsession, any obsession. Wall Street is obsessed with the Fed raising interest rates. They will be glued to the television tomorrow when Janet Yellen speaks at the Fed’s summer retreat in Jackson Hole. Everybody knows that rates have to increase, but why first and then when.If you are a borrower, you like low interest rates. If you are a saver,…
Republicans like to believe that journalists are closet-liberals, and I suspect there is some truth to that. They also like to believe that professors are closet-liberals, and, with notable exceptions, there may be some truth to that as well. But, I’m not aware of any similar sweeping generalizations about economists. There are two main trade groups for economists, i.e., the American Economic Association and the…
Luckily, I grew up on the beaches of Virginia Beach. My perception of reality was an endless loop of Beach Blanket Bingo movies with Annette Funicello. It was a pleasant perception of reality, indeed! A generation before me, Ed Shames was born in 1922 in Virginia Beach and also enjoyed being outdoors as he grew up there. His father died at age 42 from pneumonia in…
Some people think of their financial advisors as just that — someone to discuss and “brainstorm” financial matters. Some people think of us as someone to delegate and perform financial duties. Some people think of us as economic or financial wizards to manage their investments. I think we are paid to worry. (Years ago, a dear client visited Greece and brought back a fancy set…
Bullying is getting the condemnation that it deserves. Saying hurtful things to some poor kid is simply wrong. Yet, saying hurtful things about some government official is somehow viewed as patriotic. Hurtful and ignorant things are said about the Fed every day. The stock market obsesses over every word and comma in Fed minutes. Now, put yourself in one of the vacant seats on the…
Arianna Huffington is a highly successful businesswoman and founder of The Huffington Post. Therefore, I assumed she was just another political hack and not worth reading. Then, I read a review of her new book entitled The Sleep Revolution and decided to buy it. I recommend you do the same. Everybody knows sleep is important, but she writes about numerous scientific studies and anecdotal evidence that…
Our government can shape our economy with both monetary policy and fiscal policy. Monetary policy is controlled by the Fed and is concerned with interest rates, changes in the money supply, management of its huge portfolio of Treasury debt, and so forth. Fiscal policy is controlled by Congress primarily and the President secondarily. It includes budget policy, debt policy, trade policy, and tax policy. While…
Probably, before the first investment strategist was ever born, investors were asking if the stock market was over-priced and headed for a collapse. Today, the most common response is in terms of the price-earnings (PE) ratio. It is the same as the PE ratio for individual stocks. You take the market price of the stock and divide it by the earnings-per-share (EPS) for that stock.…
The August projections from the august and imperial Goldman Sachs (GS) are as follows: 1. GDP growth remains stable in the U.S., rising from 1.9% this year to only 2.0% by 2018. (I’m guessing they expect a Clinton victory and a continuation of current economic policies.) 2. In Japan, it rises from 0.4% this year to 1.1% in two years. (This nice increase is driven…
When President Kennedy cut taxes, the economy boomed and the GDP grew nicely. When President Reagan cut taxes, the economy boomed and the GDP grew nicely. Since two dots make a line, does that mean that all tax cuts make the economy boom and GDP grow nicely? If so, why didn’t the two Bush II tax cuts do the same? Below is the Laffer Curve…
One of the smartest things my father ever taught me was the importance of being informed, especially about international affairs. Of course, he had no way of knowing the burden of being over-informed would ever become so great, especially about politics. The smartest thing I’ve done this year is to put myself on a news-diet by declaring Saturdays a news-free zone. That means no network…
Economists have been hard-pressed to find something they don’t like about yesterday’s “jobs report.” I found two. Expecting 180 thousand jobs, America produced 255 thousand jobs in July. This repeated the same happy surprise in the June jobs report. Where is the recession? Is the economy really as slow as indicated by the GDP reports over the first two quarters? No! So, what is not…
Mega-bank Wells Fargo does an excellent Small Business Survey each quarter, and I look forward to it. The latest is interesting on two points. First, business confidence is now the highest since the Global Financial Crisis of 2008/9. While they are accepting limited upside in revenue, they are keeping a tight rein on expenses. (This is the main reason that business investment and hiring have…
Long ago, farmers and ranchers learned that the easiest way to control cattle and other large livestock was to put a ring in their nose. They could then tether the cattle to a particular location or lead them around by simply controlling the ring. The stock market has always had a ring in its nose. Since the Global Financial Crisis of 2008/9, the Fed has…
Bob Doll is the highly-respected chief equity strategist at Nuveen Asset Managment. In his commentary yesterday, he stated “a slowly growing economy, improving earnings, and low bond yields should provide a tailwind for U.S. equities.” Despite the unexpectedly low 1.2% GDP growth in the second quarter, I agree with him. Yesterday, the equally-respected Jeff Gundlach of DoubleLine said “investors seem to have been hypnotized that…
Last week, I wrote that the stock market would continue dancing as long as the band keeps playing the music — meaning there are few worrisome near-term danger signals to the stock market from either the economic or valuation standpoint, as long as the Fed remains “accommodative.” A friend and faithful reader told me that was inconsistent with my oft-stated concerns about the debt level…
