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 […]
News
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 […]
An Approach that Still Works…
Investors’ love affair with bonds has likely come to an end. The yield on the 10 year U.S. Treasury bond peaked at just under 16% back in 1981. Over the next 35 years, this rate dropped continuously reaching a low of 1.375% in the summer of 2016. This decline fueled perhaps the longest bull market […]
The 2-Minute Thought: Sticking with Emerging Markets
If you own emerging market stocks, you know it’s been painful this year. The chart below from McKinsey shows just how wide the divergence has been between emerging markets and the stellar S&P 500. Source: McKinsey Global Institute To say that emerging markets are out of favor now is a bit like saying water seems […]
The 2-Minute Thought: Geopolitical Risk Declining?
Believe it or not, attention to geopolitical risk seems to be declining — in spite of trade tensions, saber-rattling between the U.S. and China, and emerging markets turmoil. That at least is according to BlackRock and its quantitative tool, the BlackRock Geopolitical Risk Indicator (BGRI). The BGRI attempts to measure the amount of attention geopolitical […]
Time To Question The Middle Kingdom?…
I have been an admirer of China’s growth for a long time. The doomsayers predict it will come to an end and maybe soon, but with a nearly forty-year track record of solid results, I will stick with China until they stumble. Call me stupid. However, today there may be reasons for me to second […]
The Longest U.S. Stock Market Rally Ever…
From the lows in early 2009, it has been up, up and away for Wall Street. The market has not suffered a decline of 20% (the Bear market definition) in over nine years. However, this market has not been loved. Stock prices have risen less on an annual basis than the average Bull Market and […]
What We’re Hearing from Management…
It’s been another interesting season of listening to corporate earnings calls, and getting management’s take on their companies, industries and the world at large. What have we learned? Here are a few selected themes: Underlying demand in the U.S. is good. As hard as it is to generalize, things look pretty good for U.S. companies. […]
Cleaning up the World’s Oceans…
In the 1967 movie The Graduate, recent college graduate Dustin Hoffman is advised to pursue a career in plastics. As it turns out, this was probably good career advice. As the chart below shows, the production of plastics globally has increased more than 20-fold since then. But what has made plastic an ideal input to […]
The 2-Minute Thought: When the Robots Come, Human Hearts Will Matter
In a recent speech called “The Future of Work,” Bank of England Governor Mark Carney addressed how artificial intelligence, automation, interconnectivity, and other elements of the Fourth Industrial Revolution will change the way we work. The way we work already has changed enormously. In Carney’s words, economies are being reorganized into “a series of distributed […]
