Einstein famously said his theory of relativity applied to physics, not ethics. We’re reminded of this quote when reading Nassim Taleb’s blog recently on the Huffington Post. Taleb tells a story of being pitched a financial product by former Fed Governor Alan Blinder. Blinder was able to use his knowledge and experience as a former … Continued
The price of gold declined rather sharply over the past several days. The July 26, 2010 Wall Street Journal Commodities headline read “Gold Sinks as Market Worries Ebb.” Investors typically use gold and the common stocks of gold mining companies to hedge their portfolios against inflation and/or political risks. Political risk can take many shapes … Continued
On July 14th, we hosted a group of clients and friends at one of our favorite places, the Detroit Institute of Arts. We had the good fortune of being able to view the DIA’s current special exhibit “Through African Eyes” with a preview by curator Dr. Nii Quarcoopome. Dr. Quarcoopome gave us some perspective on … Continued
On July 2, 2010, the Campbell Soup Company re-marketed its 3.5% bonds due 2015. Stunningly, the yield represented NO PREMIUM versus what US Treasury Bonds were paying on that day for the same maturity! Campbell is considered a very strong company and, if the ratings agencies can be trusted, its bonds are considered investment grade. … Continued
An amusing chart courtesy of our friends at WallStreetCheatSheet.com. http://wallstcheatsheet.com/trading/your-cheat-sheet-to-the-psychology-of-market-cycles-infographic/?p=13570/ Funny how true it is!
The debate over Keynesian orthodoxy is raging. Most recently, in a NYT op-ed, Paul Krugman suggested we are in the beginning stages of The Third Depression. http://www.nytimes.com/2010/06/28/opinion/28krugman.html We do not fully subscribe to Krugman’s analysis for a number of reasons. First and foremost, the Keynes prescription to spend to spur aggregate demand assumes borrowing capacity … Continued
This blog has precious little to do with the economy or markets. I will start by saying that human error is present every day in markets. We sell when we should have bought or bought when we should have sold. We order too much inventory. Perfection is never guaranteed. One of my “bucket list” desires … Continued
This discussion relates to our blog posting of May 26, 2010 about the unraveling social contract in Europe. Since that time, “austerity” has become the policy prescription of choice by the governing classes to fix the budgetary ills of Europe generally and Greece specifically. Elected officials, for the most part, do not like to impose … Continued
We would like to use our blog forum today to extend a warm, and heartfelt congratulations to our colleague Marisa Lenhard, CFA for her election as the incoming President of the CFA Society of Detroit. Her acceptance speech can be accessed by clicking here – Marisa’s speech We feel strongly that any successful investment counseling … Continued
Gene Epstein, economics columnist for Barron’s Magazine, has proven remarkably adept at dissecting the employment readings put out by the US Government and assessing underlying trends with a reasonable degree of accuracy. In this week’s magazine, he points out that notwithstanding the dramatic negative impact that the employment numbers had on the stock market on … Continued
Market volatility is back in vogue. We were just beginning to find comfort in the calm when instability returned. It is often difficult to discern the differences between “noise” and true fundamental shifts that would warrant large price moves in the major stock indexes in a single day. A war in the Korea’s – that … Continued
The May 23, 2010 New York Times most emailed article was Europeans Fear Crisis Threatens Liberal Benefits http://www.nytimes.com/2010/05/23/world/europe/23europe.html It was an eye-opening piece, clearly reflecting the shifting sands in the social safety net that defines most of Europe. There are implications for the United States and other similar economic systems, the repercussions of which portend … Continued
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