While the rest of the world’s stock markets have struggled through snowy economic conditions, the US is enjoying Christmas while avoiding winter altogether.
In our most recent newsletter, we outlined one of the biggest challenges facing the US economy going forward: the debt avalanche. And there is no better example of the massive debt increase and it’s increasing risks than “zombie” companies.
Having an idea of where you want to go is great, but it isn’t the same as knowing where you are going. Many investors can articulate where they want their portfolios to go, but very few can follow the directions to get to their destination.
In his 2001 interview with Fortune, Warren Buffett pointed to what he called the “best single measure of where valuations stand at any given moment”. This metric has become known as the “Buffett Indicator”. It measures the total value of all publicly traded securities as a percentage of the countries total business (i.e. GNP). It is currently indicating something important.
There is an old adage that says “correlation does not equal causation”. Just because two metrics, or trends, move in the same direction at the same time doesn’t mean that one causes the other. But while we shouldn’t assume that correlation equals causation, there are times – on the margin – when interesting correlations should cause us to look deeper. This is one of those times.
Living in the San Joaquin Valley – in the heart of California – has it’s perks: centralized locale, mild weather, and fresh fruit. But one thing the valley isn’t known for is clean air. Smog is a way of life here. This is why many people take short drives to the coast to get some […]
While the broad economy has continued humming along for the last year or so, so have most people’s ‘inflated expectations’ about the direction of interest rates. Depending on how you look at the numbers, we might be in the best of times or we might be in the worst of them.
Occasionally, it’s important to review our investment philosophy. We do this in our newsletter as well as posts to this blog, and we do it for both our current clients and those who are looking for a different approach to investment management.
In 1989, the second installment of the Back to the Future trilogy came out. I still remember dreaming of owning Marty McFly’s hoverboard. Biff Tannen’s hoverboard was unsafe, obviously. And then, there was the garbage-powered DeLorean: Savings Equals Investment In my last post, we discussed the importance of saving in determining where we are in […]
The U.S. stock market is doing its best to imitate a rocket powered by the Energizer Bunny. Some might complain that, in light of this never-ending bull market, our caution is getting in the way of larger gains. That concern is worthy of a response, which I hope to briefly provide now.