Archive for the
‘Markets & Economy’ Category

In just under two months, stock prices worldwide have plummeted from historic highs to bear market lows and have rocketed part way back up again. The coronavirus has infected nearly 2 million people, killing over 100,000, and shut down vast swaths of the world economy. In less than one month, our way of life has [...]

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 [...]

“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, [...]

For the past several years, we have been profiling the dilemma facing investors as a “bet” between: 1) Reliance on traditional investment fundamentals reverting to their long-term means, which has always ultimately proven successful; or 2) Reliance on central bankers continuing to prevent securities prices from a reversion to historic fundamental averages, the approach that [...]

Nothing very serious here. Just a few musings on the silliness of some of the nonstop commentary we hear on financial TV. Wall Street commentators have a large bag full of descriptions and definitions that defy common sense. One that has gained great currency over the past couple of decades is the definition of a [...]

2018 proved to be a difficult year for investors throughout the world. Nothing performed well, and there were very few places to hide. In the United States, the majority of stock indexes reached all-time highs in January, only to suffer sharp declines over the next two months. A negative first quarter accompanied by worrisome foreign [...]

Notwithstanding brief periods of weakness, both stock and bond markets have experienced remarkable success for more than seven years running. Through that period, those who have continued to highlight various dangers as reason for caution have been perceived as boys who cried "wolf." Copious quantities of newly printed money have flooded the equity and fixed [...]