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. […]
Anne Doremus
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 […]
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 […]
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 […]
When Will The Party End?…
By almost any measure, the U.S. economy is in great shape. At 3.9%, the U.S. unemployment rate is at historic lows. Inflation remains at reasonably low levels and economic growth, as measured by GDP, just hit its highest quarterly rate since 2014. But economies have a nasty tendency to go through boom and bust cycles […]
The Skinny on the Big, Fat Trade Dispute…
The current trade debate began back in January when the Trump administration, fed up with what it viewed as unfair trade practices, began threatening to levy tariffs against China. These threats became real in early July when U.S. slapped levies on $34 billion worth of Chinese goods. China responded by imposing tariffs on a similar […]
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 […]
Moving Things from Here to There…
By almost any measure Corporate America performed well in the first quarter. Revenues of S&P 500 companies grew on average 8.5% over year ago levels, and earnings before taxes advanced 13.2%. But behind these rosy numbers a few concerning items stood out. High freight costs weighed on results of a wide range of companies. Some […]
Charitable Giving Under the New Tax Act…
The Tax Cuts and Jobs Act passed at the end of last year did not bring good news to the non-profit sector. Historically, taxpayers could either itemize deductions such as mortgage interest, charitable donations and state and local taxes or take a standard deduction. In an effort to simplify and reduce taxes, the new tax […]
What To Do With All That Cash…
The Tax Reform Act passed last December was good news for Corporate America. Tax rates on profits earned at home dropped from 35% to 21% and levies on lower taxed foreign earnings were significantly reduced. But the biggest near-term positive impact may come from the provision that reduced taxes on cash balances held abroad to […]
What Japan And The Olympics Can Teach Us…
The U.S. economy continued to gain steam last year, increasing at a 2.5% inflation-adjusted rate. Exports grew nicely thanks to the dollar’s 7% decline, and on the consumer front, low unemployment and a buoyant stock market helped boost spending levels. Keeping our economic engine humming at this rate, however, will not be easy. In order […]
Expecting The Unexpected…
2017 turned out to be a banner year for investors. Stock markets around the globe produced stellar gains with limited volatility and even bonds inched ahead in the face of gradually rising rates. Understandably, most are wondering if this benign environment can continue in 2018. In a recent article, the Financial Times predicted that this […]
