We’ve never had a President that paid such close attention to the stock market. With the coronavirus pandemic causing the Dow to lose over 1,600 points on Monday and Tuesday, he wisely hurried back from a state visit to India, for a hastily called press conference on Wednesday. The market was relatively calm that day, waiting for that press conference. Instead of commanding the subject…
We’ve been here before!! It was just 15 months ago that the market fell 19% in the fourth quarter of 2018. That was a result of the Fed raising interest rates and reducing its balance sheet. There was the possibility that a financial recession was brewing, and I was worried. Now, we are facing another bear market, but it is due to the coronovirus, which…
If Bernie Sanders leads us into socialism, could the next “Trump” lead us into communism? Socialism and communism are not the same thing. While all communists are socialists, not all socialists are communists. The traditional definition of socialism is state ownership of the major means of transportation, communication and production capabilities. Note that it is an economic term, not a political term. The socialist economic…
Thou shalt not panic! Thou shalt not panic! Thou shalt not panic! Thou shalt not panic! Thou shalt not panic! Thou shalt not panic!
Jean-Jacques Rousseau was a highly influential French/Swiss philosopher, who also wrote “The Social Contract” in 1762. It opens with the famous sentence that “Man is born free, and everywhere is in chains.” Among the notions in this important work is that individuals are the result of their upbringing or social environment. It helped me to understand how a poor black son of a crack-head single…
In the early mists of time, high priests could predict the future by reading the entrails of a chicken, lamb, or goat. From a mess of goat guts, they could see the future. “Technical” analysts look at price movements of stocks to rationalize the buy-and-sell decisions of investors. Sometimes called “chartists”, they don’t even need to know the name of the stock or the business…
Probate has earned a bad reputation. When a person dies with assets that become part of their “estate”, the probate court steps in, making sure the assets are distributed to the right person. It is a necessary public service but an annoying public service. It is slow, paper-intensive, and costly. The good news is that it is easily avoided. If your trust owns the asset,…
In March of 2017, I predicted Donald Trump would not serve a full term. Long before he could be impeached and removed, I expected this most thin-skinned of men would tire of the inevitable criticism and just walk away. Declaring victory and resigning would allow him to retain some minimal dignity after office. However, I was wrong! (At least, I can admit making a mistake.)…
Due to the coronavirus outbreak, estimates of China’s GDP growth are dropping fast. Starting the year at a relatively modest 6%, most forecasts are now in the 0 – 1% range. This is a huge drop in short time. While I have great sympathy for the thousands of sick and dead, I feel a certain sympathy for their policy makers, who are trying to jump-start…
The most common question over the last few weeks is how is the coronavirius going to impact the stock market? The obvious answer is nobody knows, of course. But, the history of this great country is that major problems develop, get resolved, and then we keep growing. That history is why advisors recommend clients stay 100% invested 100% of the time. In 2007, just prior…
Last week, the Bureau of Labor Statistics released their monthly “jobs report.” It showed the labor market is strong and getting stronger. The three-month rolling average was 211 thousand jobs, compared to a 2019 average of 175 thousand jobs created each month. The market yawned. Can you remember that from October of 2008 to March of 2009, America LOST an average of 712 thousand jobs…
Walter E. Williams is a long-time economics professor at the conservative George Mason University. His most recent article is interesting. It is entitled “How to tell good economists from the bad,” explaining a good economist can see the obvious – obvious to his eyes, anyway. He gives two examples. First, who pays tariffs? He goes on to explain that tariffs, like taxes, can only be…
Early on, I recognized that Google’s motto of “Do No Evil” was a joke. They sold personal information on their customers to anybody who can pay for it. Then, Facebook came along and made the sale of personal information into a major industry. Now, nobody is certain how many companies are selling your personal information. In those early days, it was seen as a profits…
While I have great respect for The Office of the President, I have rather less for the current occupant. Therefore, when he does earn some respect, he deserves credit for it! At the prodding of his daughter, the President signed an Executive Order last week establishing an office to combat human trafficking, which is a truly horrible blight on mankind. He has even requested funding…
The four greatest innovations in the history of mankind are: FIRE — used to provide heat, to provide light, and to cook food THE WHEEL — used to transport people and goods more efficiently THE INTERNET — used to bring the world’s body of knowledge to every person BLOCKCHAIN — a worldwide “read-only” spreadsheet using triple-entry accounting, which has never been hacked and will damage…
For reasons best understood by your neighborhood nerd, yesterday’s blog dropped the most important paragraph!?! With apologies, the corrected blog appears below: While I have been a long-time advocate for exchange-traded-funds (ETFs), I never thought they could bake bread nor cure the common cold. Yesterday, I attended a lecture entitled “Combating Fake News: Why Exchange-Traded-Funds Won’t Cause the Next Market Sell-off.” I saw a great…
While I have been a long-time advocate for exchange-traded-funds (ETFs), I never thought they could bake bread nor cure the common cold. Yesterday, I attended a lecture entitled “Combating Fake News: Why Exchange-Traded-Funds Won’t Cause the Next Market Sell-off.” I saw a great many graphs documenting that ETFs continue to grow during both bear and bull markets. Frankly, I didn’t realize that ETFs were under…
In 1988, I completed my financial planning studies and proudly earned a CFP certificate. Over all those years, I have enjoyed the prestige of being certified, even as the costs increased, the red tape mounted and the continuing education droned on. Last summer, I was asked by Old Dominion University to teach the capstone course to students preparing to take the two onerous 3-hour exams. …
I hate long-term bond funds. I hate annuities. And, I really hate IPOs (initial public offerings). IPOs happen when a private company wants to sell part of its ownership on a public stock exchange, like the NYSE. (Of course, it begs the question of why would I want to sell part of my company when its value is going up?) The popular perception of IPOs…
Bernice King once said “In my view, it was no accident that Nelson Mandela was chosen by God to lead the people of South Africa. There are very few people who could be imprisoned, kept away from their family and loved ones, and exit that same prison with such a powerful spirit of love and a desire for reconciliation.” When Speaker Pelosi authorized an inquiry…
Imagine you make $100 thousand a year and then imagine carrying $322 thousand in debt. You would probably be in trouble. Fortunately, the interest rate on your debt is artificially low. Now, think globally, where worldwide debt has reached $257 TRILLION, which is 322% of worldwide GDP. Some people see that as proof of profligate spending worldwide, which is partially true. I see it as…
One of my favorite analysts is the affable Dr. Jeremy Siegel of Wharton. In his last commentary, he doesn’t foresee any recession but thinks the stock market has gotten ahead of itself. It is just going up too fast, and “trees never reach the sky.” He recalls January of 2018 when the same thing happened, only to experience a scary sell-off the next month. This…
Logic is not always the same thing as truth. Sometimes, logic is absurd. I have voted for numerous Libertarian candidates over the years. Recently, I was talking with a long-time Libertarian friend. He saw nothing wrong with arming school kids. Anybody should be able to buy as many guns as they like and take them wherever they like and whenever they want to carry them. …
The Bank of America has an interesting forecast. The current bull run in the stock market resulted from the relatively-sudden easing of geopolitical tensions, a decision on Brexit finally, and confidence in the November election, as well as highly supportive central banks (Fed & ECB). The Bank believes these problems are not over, but merely “on hiatus.” They believe the S&P will hit 3,333 by…
For faithful readers, my latest quarterly column for Inside Business can be found here: https://www.pilotonline.com/inside-business/vp-ib-expert-flinchum-0113-20200106-paeou5gjtbaivmhr6y5bpmatou-story.html
I enjoyed listening to pundits talking this morning about how boring the monthly “Jobs Report” was. Compared to expectations of 160 thousand new jobs, only 145 thousand were created last month. Big Deal! The unemployment rate was unchanged at 3.5% — a 50 year low. The U-6 level of under-employment dropped to 6.7% — a new record low. Ho-Hum! This is welcome boredom — remembering…
Bob Doll is the chief equity officer for investment giant Nuveen. For an investment strategist, he is remarkably humble and affable. Each year, he makes 10 predictions and has a good track record. With my comments in parenthesis, here are his 2020 predictions: The world avoids recession in 2020 as U.S. GDP grows over 2% and global GDP grows over 3%. (Fingers crossed) Inflation and…
During my first year in the Army, I learned infantry tactics and saw the military world from a top-down perspective, as in brigade-battalion-company-platoon-squad. However, on the very first day of Special Forces training, I was taught to take a bottom-up perspective and that the atomic bomb was NOT the ultimate weapon. The ultimate weapon is the guerilla — a few well-trained, highly-motivated and resourceful men,…
Wouldn’t it be great if you could buy a nice present for your friend and then send the bill to THEIR children? Congress just did that and did it on a bipartisan basis! It has the pleasant name of Setting Every Community Up for Retirement Enhancement Act or SECURE. It reduces the tax burden on certain Boomers and increases the future tax burden on Millennials.…
When I was a boy, my mother would remind me to write down my New Year’s Resolution each year and tape it to my door. Like most kids, my resolutions were usually (1) to do ALL my homework or (2) keep my room clean or (3) feed my dog – “Pal” – before leaving for school or (4) even to show respect to the dentist…
Among my holiday reading was Lifespan: Why We Age – and Why We Don’t Have To” by Dr. David Sinclair of Harvard. He argues convincingly that “aging is a disease, and that disease is treatable.” It is profound book, given to me by a good friend, and it is laced with one medical discovery after another – some of which exceeded my ability to appreciate. …
At year-end 2018, there was terrifying 17 percent drop in the stock market during the fourth quarter, then economic datapoints weakened during the first half of 2019. To make things worse, the political atmosphere was terrible, with Brexit, Mueller/impeachment, Korea and a very real trade war. A recession looked inevitable at that point. An inverted yield curve during the summer seemed to confirm this. Fortunately,…
The Wall Street Journal runs a small cartoon in every issue, which are usually worth a chuckle or two. One from late 2009 still hangs in my office. It shows a sad, forlorn financial advisor looking out his window, saying “It’s hard enough accepting that I let my clients down. It’s even worse knowing the system I believed in . . . let EVERYONE down.”…