Fed Chair Janet Yellen’s early May pronouncement that “…equity market valuations at this point are generally quite high” caused quite a stir with investors concerned that another market “correction” was just around the corner. Many who believe that stocks are overvalued today point to recent readings of the Cyclically-Adjusted Price to Earnings (CAPE) ratio. This […]
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Investment Success
“Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ… what you need is the temperament to control the urges that get other people into trouble in investing.” Warren Buffett Professional money managers need to become proficient in a wide range of subjects including statistics, accounting […]
The State of your Wallet
Yogi Berra, the New York Yankee catcher/philosopher once said, “A nickel ain’t worth a dime anymore.” Prices just keep going up, up and up every year. Well there is some good news on this front in this year’s edition of the Hanson Index of Essential Burlington Prices. First, the Consumer Price Index (CPI- all urban […]
It’s More Important Than You Thought
The first Social Security check was mailed in January, 1940 to Ida May Fuller of Ludlow, Vermont. She received a monthly benefit of $22.54. Times have changed and Social Security is now an even bigger part of everyone’s life. It is estimated that a married couple who have earned at or above the payroll tax […]
A Look at the Short and Long Term
In an era of ever improving living standards, it’s hard to believe that growth was non existent for most of human history. But take a look at the very long run – and by that, I mean a few millennia – and that is what you’ll see. The chart below, from a speech by Andrew […]
Where You Stand Depends On Where You Sit…. Literally
This is a bit of a different page for us. The International New York Times (formerly the International Herald Tribune) had two stories, three pages apart on February 20, 2015. They couldn’t deal with more different worlds. The first story is about King Salman, the newly installed king of Saudi Arabia. The ruling families in […]
Measuring the Market
“So how’s the market?” Most likely whoever you ask will tell you how the Dow Jones Industrial Average is doing. The Dow has been around since 1884 when Charles Dow first published a list of stocks in his Customer’s Afternoon Letter. The Index morphed into the Industrial Average in 1896 (see below) and the Dow […]
Thinking… It’s Not as Easy as You Thought
There was a wonderful article in The New Yorker recently (February 2, 2014) titled, “The Pursuit of Beauty.” It is about a Chinese mathematician at the University of New Hampshire who received a MacArthur Award for solving a problem in pure mathematics that has baffled theorists for 150 years. Pure math is done with no […]
Strange Developments Across the Pond
What if someone told you that your savings, instead of making money, actually cost you money? As strange as it may sound, this is what is going on in many European countries today. Instead of paying money on deposits, many central banks are charging fees to hold their big bank customers’ excess deposits. Several high […]
Global Communication and Thoughts From London
I always like to read ‘farewell’ comments by truly exceptional thinkers. When the editor of the single best publication we read (The Economist) retires, we pay attention. John Micklethwait has headed The Economist since 2006. In his farewell editorial (January 31, 2015) he notes that there are two great debates going on in the world […]
Get the Important Things Right
There are only two reasons why an economy grows and only two reasons why stocks go up in price. I know this is overly simplistic, but not by much. An economy will grow if the workforce grows and if each worker produces more widgets per hour (productivity). Historically the US economy has seen work force […]
Globalization: Dormant But Not Extinct
In the late 1990s and 2000s up to the financial crisis in 2008, globalization seemed a powerful inexorable force. The world was becoming more interconnected. Goods, services, capital, and people were moving ever more freely around the globe without regard to borders. The world was getting flatter. Global champions, we were told – whether companies […]
