Twenty years ago China was already an export juggernaut but it was difficult to see it becoming a consumer powerhouse. It did not have credit cards, banks were backward in their technology, there was no credit rating system, and above all there was no delivery system for internet shopping – no UPS or FedEx. Well […]
News
A Beautiful Mind…
You’ve all heard of the placebo effect, where a patient is administered a fake medicine without knowing and then shows signs of recovery. That’s interesting on its own, but would you believe that they are now running tests where patients are told that the pill they are taking is fake and the results still show […]
Is the Whole Greater Than the Sum of the Parts?…
As value investors, we spend our time trying to identify firms whose shares are mispriced by the market. This work often leads us to examine companies that are responding to a range of challenges such as rapid technological change or intensifying competition. Under these circumstances, managers often turn to acquisitions as the best path forward. […]
Shifting Back To The East …
That chart at the bottom is from a recent Economist article. It’s interesting how economic power has shifted first from East to West and now back to the East. In the early centuries China and India were the largest economies, then Europe became preeminent. America’s turn came in the 1900s and with the exception of […]
Tax Talk…
The new tax law is in effect and there are changes to be considered. Spoiler alert, tax discussions can be sleep – inducing. You are forewarned! The standard deduction – the amount that all tax filers can deduct from their income each year – was doubled to $12,000 for single filers and $24,000 for joint […]
Remember the Big Picture…
All seemed good when the S&P 500 reached an all-time high on September 20. But by October 29, we were 9.9% lower, with a lot of up and down in between. Gulp? Yikes? If the market has been unnerving you, we understand. For one thing, before October, we enjoyed some pretty smooth sailing, and when […]
Rising Rates – The Good, The Bad and The Ugly…
Investors sitting on cash over the last several years finally have something to cheer about. Interest bearing deposits have inched up steadily over the last year with many today yielding over 2.0%. Unfortunately, these higher rates are not good news if you are the U.S. government, one of the biggest borrowers around. U.S. debt now […]
The 2-Minute Thought: Handling Investment Pain
I really enjoyed a recent blog by Cliff Asness of investment firm AQR Capital. It’s called “Liquid Alt Ragnarök?” and it’s on how to deal with the intense pain of investments going badly. Liquid Alt is the name of AQR’s investment strategy. It’s explained in the paper, but that’s not the important part. The important […]
The 2-Minute Thought: Extreme Stock Price Reactions
Recently, there have been some pretty extreme stock price reactions after earnings announcements. Why would Chinese test prep company New Oriental Education trade down by 17% after announcing a negative 2% earnings surprise — while the shares of apparel company VF Corp see a drop of 11% on a 9% positive earnings surprise and higher […]
Is Globalization Dead?…
The simple answer is no, globalization is not dead but we have to add some big caveats. President Trump wants to re-shore jobs lost to globalization in the 80’s, 90’s and 2000’s. If America can bring manufacturing back then we will be strong again. At least this is the theory. The problem, however, is that […]
Financial Freedom Under FIRE…
There is nothing new under the sun when it comes to financial planning. All you really need to know is that you should spend less than you make – at least that is what Benjamin Franklin believed. But much like diet fads, there will always be a new theory on how you can gain financial […]
What Amazon Has Done To Us…
The “Amazon Effect” usually refers to the way Amazon completely disrupted the retail market. It pushed some bricks-and -mortar competitors out of business and knocked others off their feet for a bit until they could regain their bearings in a changed world. It didn’t matter if a company competed directly against Amazon or not. By […]
