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Category: Investment Philosophy

Investing in Hotel California

“You can check out any time you like, but you can never leave.” Hotel California, The Eagles

Last week it was reported that 45 people were killed while leaving a Jewish festival at Mount Meron. The annual religious festival attracts around 100,000 people. Its history dates to the Jewish resistance to Rome in the 1st century. Typical of the festival is dancing, singing, and bone fires. However, this year what began with joy and celebration quickly turned to tragedy. Although the massive crowds came a few at a time, most began leaving all at once.

The resulting crush – and the tragedy that accompanied it – was preventable. Inadequate facilities – specifically the size of the exits – were known to be a problem. But the pull of the festivities brought large numbers of people anyway. While incredibly tragic, the crush is a helpful illustration of what happens at the end of a stock market bubble. Irrational exuberance leads to the inevitable crush as everyone tries to leave the party at the same time. Today’s stock market is like investing in Hotel California. Checking out is easy – it’s leaving that’s difficult.

Beware the price you pay…or pay the price.

“The price you pay determines your future returns” is an old adage in financial literature. This is a simple way of saying that when you buy at high prices, your future returns are lower. Conversely, when you buy at low prices, your future returns are higher. Buy low, sell high. It all sounds right, but is it true? Or is this phrase just an antiquated relic of times past when money did not grow on government balance sheets, and asset prices didn’t always go up? That is a fair question, but it is not a simple one.

Jay Powell And The Chamber of Secrets

The question investors need to grapple with today is whether or not they believe in the government’s wizardry, or whether they accept the metaphysics of Parmenides and, well, the entire western tradition.

No Pain, No Gain

What comes to mind when you hear the phrase: no pain, no gain? Whatever it is that comes to mind, I have a feeling your investment portfolio is not among them.

Expect the Unexpected

In this Investment Insights, author and Chief Investment Officer, John R. Hooper, discusses when elites fail, populists need to avoid taking a wrong turn, central bankers have cultivated a casino-like atmosphere and to chase the future, not the past performance.

If Investing Were A Funny Bone

If investing were a funny bone, some cartoons hit it head on. They address several problems with how people think about investing, which is why its simultaneously funny and painful. Here, we analyze a couple of them.