I strive to be smart, wise, analytical, creative, intuitive, and informative. I hope to help make you a better active investment management pro.
I recommend you start with the Best of the Blog.
no news at cnn
HAPPY HALLOWEEN TO EVERYONE. Have you noticed increasingly that there is no news on the news? Below I have quoted the headlines from today’s front page of CNN.com (sorry Time Warner). As you read through the list of headlines make a note of those which you feel are actual news that could affect you personally. So much of what passes as news is not news, but celebrity gossip, crime news that affected people you will never ever meet, human interest stories that aren’t so interesting, and stuff that has been reported just...
read morea Brush with reality
Today’s post is about an article written by Michael Brush writing for MSN Money. The title of his article is: “5 ways to fix Wall Street.” The story can be found at: http://articles.moneycentral.msn.com/Investing/CompanyFocus/5-ways-to-fix-wall-street.aspx?page=1 The lead in to the article says, “Billions of our dollars are flowing in to save the financial system, but investor confidence won’t return until trust is restored. Here’s the work that is needed for real reform.” Brush is described...
read morewhen logic & proportion have fallen sloppy
Big numbers are difficult to grasp…and here is an exercise to demonstrate this fact. For those of you who know me then you have probably been through this before – sorry, in advance. ***** Question 1: If you had exactly a million dollars and spent a dollar a second, how long would it take for you to spend the whole million? Answer: Approximately 11 days. ***** Question 2: If you had exactly a billion dollars and spent a dollar a second, how long would it take for you to spend the whole billion? Answer: Approximately 31.7...
read moreholy matrimony
Another dismal, doggy Dow day. Two things to talk about today: First, the fact that the stock market is starting to reflect the recessionary financial results coming out of businesses is a good thing. Why? Because the financial markets have not reflected actual value for many years – see my post about the solid footing lying underneath all economies as well as the posting about the fact that the level of financial markets does not often reflect the actual value of the underlying assets. The more that the financial markets reflect...
read moreaccountability
In my posting entitled, “changes,” I stated the conditions that needed to be present to know definitively that a market bottom had been reached. Because this information is so important, I want to reiterate the conditions and also to provide an update that affirms that progress (thankfully) is being made. The reason that there is so much uncertainty is that we are confronted with problems right now that: our old ways of solving problems cannot correct; our old institutions cannot resolve; and our leaders cannot solve. For...
read moredemand > supply = higher prices
demand > supply = higher prices The general assumption about markets is that they fairly price assets and that they are a true reflection of the success of those assets in generating returns on capital. However, these two functions of the markets are not the same thing. What is more, they are frequently not in alignment with one another. Why is this so? The short answer is that the demand for investments very frequently far exceeds the supply of investments. And as you know, when demand exceeds supply, prices rise. That is, there...
read moreshoegazing
Shoegazer music is one of my favorite sub-genres of music. Its progenitors are obscure 1960’s bands, such as Austin, Texas’s, “The 13th Floor Elevators,” and New York City’s, “The Velvet Underground.” The music is typified by repetitive rhythms that drone in a similar fashion to Indian Classical music. Not surprisingly, this music can induce trance-like or, if you prefer, meditative states. And that is precisely why I like it. The droning task is most frequently taken on by the bass players of these bands, but sometimes other...
read moremark to market
There was an excellent question in the “comments” section that I wanted to bring out to the front page area. I responded to the question posed in the comments section, but for clarity wanted to put it in the main section of the blog, too. From an anonymous poster: “Care to discuss the issue of “Mark to Market” and its role in perhaps creating a great deal of the mess. I have read (which is always dangerous) that less than .5% of households are in foreclosure and something like 3% of mortgages are in default ( I admit...
read morea little gloating
Today’s post is necessarily short because I am currently onboard a motor home in Palm Springs as we move down East Palm Canyon Drive. Yes, I am on the road with my gorgeous, wonderful wife, Dawn. However, lest you think that I am not paying attention, I saw the Dow Jones’s fall yesterday of over 700 points due to bad economic news. I won’t say I told you so…just take a look at the previous post. We have a lot of blood letting still to take place before real meaningful change has taken place. Next post will be about...
read morestock market runup is unwarranted
The news today that the Dow Jones Industrial Averages was up 936 points, or 11.1%, has spread like wildfire. NASDAQ was up 11.8%. The S&P 500 was up 11.6%. Wow! That felt good, didn’t it? Problem is…not much has changed. In my last post I said that certain conditions had to be met that would ensure that a bottom had been reached in financial markets and that it was safe to invest again. Those conditions have not entirely been met. Since last week there has been a one-page agreement signed by the G-8 nations that they...
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