Newsletter
The Case For Stock Selection
The performance of our stock portfolios is largely dependent on the performance of the broad stock market. This is not an accident. We purposely select stocks that represent the market and diversify by industry and market capitalization. We do this because modern history tells us that the stock market provides the best and safest return…
Where do we go from here?
Since the onset of Covid 19 the US government earmarked $5 Trillion for financial relief, small-business loans, bailouts, PPE, state aid, and vaccine development. That is a remarkable 22% of expected 2022 US GDP virtually borrowed from a digital printing press at the Federal Reserve. This is on top of a US economy that was…
Is It Supposed To Be This Easy
Should Tesla be worth more than Wal-Mart and JP Morgan combined? Should just six stocks make up nearly 30% of the value of the S&P 500? Should bitcoin, a “currency” with no government backing and subject to massive swings in value be worth one trillion dollars? Should it be possible to bring companies public based…
The Pandemic Adds to Bifurcation
The gap between the rich and the poor in the US has steadily increased for many years, but the Covid 19 pandemic accelerated the pace of divergence. Service and nonessential manufacturing workers are suffering the brunt of the economic dislocation, while highly paid office workers, and most professionals and retirees have escaped relatively unscathed. The…
Stocks Only Go Up
If you follow the financial media you’ve come across numerous stories on day traders taking over the stock market on their Robinhood app. People with little investment knowledge making large and loud bets on airlines and cruises using scrabble tiles to pick tickers. The line has been drawn between “Davey Day Trader” and his army…
The Mind of the Market
What is the stock market thinking? The world economy is nearly shut down, with no idea when it will get back to normal. Unemployment is the highest since the great depression. Few companies can predict next quarter’s earnings, much less next year’s. Still the stock market is barely in correction territory and pricing in business…
Is it Time to Panic?
Common sense, simple math, or just a basic understanding of history should have told us that the stock market would have a correction at some point. The problem was deciding when it was going to happen. Before the market went up 30% last year? Before it went up 60% in the last five years or…
The Most Powerful Force in the Universe
According to Albert Einstein, the most powerful force in the universe isn’t nuclear fission, electromagnetism, or particle physics; it is compounding, the ability of things to grow exponentially. This phenomenon allows for something small to expand into something massive, even if growing very slowly. A 10-inch plant growing at a barely noticeable 20% a year…
Diversification
IS THE ONLY PROVEN WAY TO REDUCE RISK WITHOUT SACRIFICING LONG TERM RETURNS. It’s obvious. Own one stock or bond and a single event can change your net worth in seconds. Own a couple dozen diversified by industry and a single event has much less impact. True, a single positive event will also have less…
The State of the World
Here is a little test to see how much you know about the state of the world. Is it getting better or worse? Is there hope for humanity or are we on a slippery slope to extinction? In 1950 the average length of human life in the world was 35 years. What is it today?…
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