Archive for the
‘Investment Thinking’ Category

During the first quarter, we experienced the fastest ever 35% decline from an all-time high in US equity market prices. The subsequent remarkable recovery rally regained most of the lost ground in barely a month and a half. Commentators are currently marveling about the disconnect between aggressively rising stock prices and the weakest economic data [...]

As the month of April closed last week, Wall Street celebrated the S&P 500’s powerful 12.7% advance, the strongest monthly gain in 33 years. Whether that success points to continued gains in the short run, however, is open to question. Looking back, two even more profitable months saw slightly varied outcomes. The most profitable month, [...]

Two articles from The Wall Street Journal weekend edition struck me as particularly helpful to readers seeking insight into prospects for the pandemic, the economy and the investment markets. Relative to the coronavirus pandemic and its potential effect on the economy, let the authors Louise Radnofsky and Ben Cohen speak for themselves: There has always [...]

In our January Commentary, we noted that the Fed had dropped short-term interest rates in late-2019 in three distinct quarter point increments to the year-end level of 1.50-1.75%. As the coronavirus spread around the world in early-2020, the central bank cut interest rates on March 3 by half a percentage point, its biggest single cut [...]

Readers of our reports over the past few years know that we have described the condition facing investors as a bet. Older market veterans who have lived through a number of market cycles would tend to bet on what has always ultimately played out-- that the equity markets would eventually revert to their historically normal [...]

In my 52 years in the investment industry, I have never seen anything like the stock market activity of the last month. From its Feb 12 all-time high, the Dow Jones Industrial Average declined by more than 35% (about 10,500 points) to its Wednesday low, just below 19,000. That significant decline was the fastest in [...]

On Sunday evening of this week, the markets experienced a brief dip into negative yields for the 3-month US Treasury bill. Once again on Wednesday, bills with maturities from four weeks to three months were slightly negative. In other words, investors were willing to pay the US Treasury to hold their money for the next [...]

As we head into the decade of the twenties, welcome to the casino! You can double your money on red or black, or you can lose it all. Never in the lifetimes of people living today have speculators faced the alternative of investments so ripe with positive potential while simultaneously saturated with the risk of [...]

Over the past year, the major factors affecting stock market movement—expectations of Federal Reserve policy and administration comments about the China trade dispute—have remained largely the same. What has changed is that market reactions are unfolding in an increasingly compressed time frame. At the long end of a three-year process of Fed interest rate “normalization”, [...]

“Is the market going up just because of the Fed?” – asked of an investment strategist by a CNBC announcer. “No, the economy is incredibly strong.” This interchange took place immediately following the strategist’s prediction that the Fed will lower short-term interest rates in July by 25 basis points, possibly by 50. Even if illogical, [...]