Investment Insights, Inc.

The INSIGHTS Blog

Prediction is Difficult

I wish I could write two columns. One that would be published if Biden won the election and one that would be published if Trump wins. But this article, which will first appear on Nov 4th, is being written weeks in advance. So you, dear reader, have an enormous advantage over me. You know what happened.
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Less Bad

The recession is over. Recessions don’t end when the economy has fully recovered. They end when things stop getting worse and start getting better.
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Will We Get Inflation This Time?

In response to the financial crisis in 2008 the Federal Reserve crashed interest rates to zero and went about buying bonds at an unprecedented rate. These were necessary, important and effective responses to the unfolding crisis. But many, myself included, thought the long term effect would be inflationary. As a result the price of gold went on a tear and by 2011 had reached all time record highs. But a funny thing happened. There was no inflation. It never showed up.
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The Myth of The Free Lunch

"A chicken for every pot." - headline of a Herbert Hoover's 1928 presidential campaign ad. "From each according to his ability and to each according to his need." - Karl Marx, 1875. The great innovation of representative democracy is that we get to vote to choose our leaders and representatives, and that's great. I wouldn't have it any other way. As Sir Winston Churchill famously said, "Democracy is the worst form of government, except for all those others that have been tried."
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Trillions of Dollars?! What? Really? Where Did That Come From?

"A billion here, a billion there, pretty soon you're talking real money!" - Senator Everett Dirkson. Ted Turner was an Atlanta broadcaster that started CNN, TNT, TBS and others. He sold them all and walked away with about $3 billion, and gave $1 billion to the United Nations. When asked why he gave so much, he said, that spending a billion dollars was really hard.
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What Happened? That Was Really Fast!

The drop in both the stock market and the economy was breathtaking, and not in a good way. This is the kind of thing we prefer to read about in history books, but not actually experience! From February 19th to March 23rd the S&P 500 index fell from 3393 to 2191 - a drop of 35% in less than a month. By the time you read this, we will have a pretty good idea how bad the economy was hit, but even before the official numbers, we know its been historically bad.
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This Time Really Is Different

I am very fond of old sayings because they represent concepts that have stood the test of time. In the investment world, it has long been said that the four most dangerous words in the English language are "This time is different". This saying became especially popular in the early part of this century. In the late 1990's there was an idea going around that recessions were a thing of the past.
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This Too Shall Pass

Nothing has happened in during my life like we are going through right now. In my life we eliminated polio from the United States and most of the world. We beat back measles and other horrible diseases. Several new horrible diseases have come along - HIV and Ebola come to mind. MERS and SARS are terrible killers but they aren't very contagious. Neither is Ebola. But now we have a killer virus that aggressively spreads. Now we have mass hysteria.
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There’s No Such Thing As A Free Lunch

In October of 1968 I was excited as I sat in the first day of class of Economics 101 at Penn State. It’s hard to overestimate how much I got from that class – from the very first day! The professor turned his back to the class and walked to the blackboard, picked up a piece of chalk and in big letters wrote “There’s no such thing as a free lunch.”
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