A recent column in The Economist suggested that Apple is testing the natural limits of company size. It’s not a new idea. It seems natural to expect that something would happen eventually after a company gets so big and dominant – something like market saturation, competition, backlash, missteps, or product obsolescence. Every age has had its […]
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The 2-Minute Thought: Mid-Year Market Review
The pink chart below from last Friday’s Financial Times tells us a lot about where we are in markets now: Source: Financial Times The indomitable FANG or FAANG stocks remain indomitable (that’s Facebook, Apple, Netflix, Google – plus Amazon if you do the double A). Though there was a brief moment of doubt earlier in […]
The 2-Minute Thought: When to Heed Advice from Others
In her 2013 book, Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan, Harvard Business School professor Francesca Gino describes an experiment she did with Don Moore, a colleague at the University of California, Berkeley. In the study, participants were shown pictures of people and asked to estimate their weight. […]
Some Things We Have Run Across Recently…
The demilitarized zone between North and South Korea has always interested me, not because of the military standoff but because of its ecological history and now, its economic development. The DMZ is not a fence or a Berlin Wall. It is an enormous swath of land, 528 square miles in size. Because there has been […]
Investing is Just Like Gambling With One Big Exception…
If you play long enough in Las Vegas you will eventually lose. The odds are stacked against you. In the stock market the opposite is true. Stock prices are based on corporate earnings and over time corporate earnings go up. Historically they have increased approximately 7% per year over ten-year or more periods. The amount […]
Why we Make Suboptimal Decisions…
In ice hockey, if you’re down by one goal and the clock is ticking down, should you take the chance of pulling your goalie to get a sixth attacker on the ice and increase your chances of scoring? And if you decide to go for it, when is the optimal time to pull the goalie? […]
Go Ahead and Spend a Little!…
Retirement planning is difficult for a very simple reason. In most cases, it requires deferring consumption today in order to fund a goal sometime in the future. This effort requires a well developed sense of self-control. Self-control comes more easily to some people than others, but for most it is emotionally difficult. A wide range […]
The 2-Minute Thought: On Investment Errors – Part II
When do you know your investment decision was wrong? That was the topic of my post last week. I wrote that you may not know if you are right or wrong at a given moment, but eventually you will — after enough time has passed. As part of my examination of our errors among the […]
The 2-Minute Thought: When Investments Go Wrong
Columbia Business School professor and investing guru Bruce Greenwald has said that you do not need to be right all the time to be a good investor. He has said that if you can get things roughly right 60 – 65% of the time, you’ll end up in the top 1% of investors. That would […]
Not a Matter of If but When…
I am talking about the next Bear Market. The stock market has been going up pretty much non-stop since March 2009 (see below). Stock market advances do not end just because of old age, but nothing grows to the sky and eventually we will get a recession and a market downturn after this impressive expansion. […]
Why China May Very Well Win a Trade War…
In a recent New York Times International piece (May 4, 2018) Thomas Friedman noted that America and China are coming at the current trade discussions from very different angles. The Trump Administration wants to draw the line now on trade before it is too late, before China gets too big. The Chinese believe they are […]
What the S&P 500’s Composition Tells Us…
The S&P 500 is an index of 500 large U.S. stocks weighted by their market capitalization or market value. We know it today as one of the most important gauges of U.S. stock performance, covering a broad swath of 11 sectors. But when the index started in 1957 in its current form, its composition was […]
