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INSIGHTS Blog

What is a Stock?

After doing a quick Google search, I found this commonly used definition of a stock: ownership share in a company. Others have described stock as a way to have part ownership of a business that someone else manages for you. But do these definitions tell the full story?
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The Good Mutants

Delta is sweeping the world, and unless you've been out of the loop for months, you already know quite a bit about it. Covid-19 is changing so fast that by the time you read this, there may already be new variants.
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Growth, Growth . . . and more Growth!

If you're reading this, I'm guessing you're not the type to be bored by finance and economics, so here goes the thrilling story of the business cycle. To see the business cycle in action, we need to go back to the years 2005 to 2007. In case you've forgotten, that was the period of house mania and liar's loans.
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The Economic Cost of Vaccine Reluctance

A friend came buy to drop off a camera lens he had borrowed. He knocked and left the lens on the door step. I came to the door as he was heading down the walk. He was masked and obviously intent on staying at the now roughly 30 feet away that he had walked from the door. "Why don't you just get vaccinated?" I asked him. "Because some people die from the vaccines and I've heard that you can still get Covid anyway even if you're vaccinated so it doesn't do any good."
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What’s in a Name?

"So, this fund has two completely different ratings." I was speaking with a few of my colleagues while on a Zoom call. We were several weeks into a research project comparing the ratings of various sustainable investment products. "This fund is rated an 'A' over here, while this other rating has it listed as a 'D'." In this instance, an A is a better rating than a D. Clearly there was a disconnect between the different ratings.
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Why Are You Telling Me This?

"No one loves the messenger who brings bad news." -- Sophocles 442 BC in the play Antigone. But what if the messenger is not telling the truth? What if he or she is exaggerating, or extracting parts of the truth and mixing it with outright lies and distortions to give an entirely different meaning to the message? Maybe we should kill the messenger sometimes, at least metaphorically.
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The Art of Critical Thinking

I saw it on Facebook. It made sense. I strongly agreed with it. I reposted it. Within minutes Facebook friends were informing me that, no, this actually was not true. Ever had that experience?
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What's Next

A few years ago Joan and I had dinner with clients in Puerto Vallarta, MX. The clients have a home there and were very friendly with people who owned and worked in local restaurants. On this particular night they introduced us to a young man working in the kitchen. This young man had moved back to Mexico after living in LA for some years. He said he had no interest in ever going back to the US. We asked why and his answer was clear. His family is in Mexico.
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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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Check the background of this financial professional on FINRA's BrokerCheck