The financial transaction known as an “inversion” is designed to take advantage of lower corporate tax rates outside the United States. While the practice has been subject to an increasing level of political criticism, there does not appear to be any credible evidence that it is a violation of current tax law. Despite the political rhetoric, … Continued
It is fairly well established that no one has been able to consistently pick market tops and bottoms. Of course, that is not stopping people from trying. One anecdotal clue, that has some currency in the investment community, is the concept of cyclical companies announcing headquarters upgrades and expansions at or near the top of … Continued
This is a country music song written by David Allan Coe and popularized by Johnny Paycheck. Perhaps you should be careful what you ask for. Between the increasing use of automation and rising minimum wages, the potential for reduced employment opportunities may make it increasingly important to hang on to the job you have. There … Continued
Argentina is a serial defaulter. Argentina’s most recent default, more than $80 billion, began in 2001, and was only recently fully resolved after various classes of debt holders accepted significant losses. In April 2016 Argentina sold $16.5 billion of new dollar denominated debt ranging from three to 30 years, with a yield of 8% on … Continued
Over the past few years, clients have asked on occasion about the merit of including hedge fund investments in portfolios. At its extreme, I sat in the living room of a very wealthy client in North Carolina in 2007 and was politely dressed-down by a money center bank product salesman for not being bright enough … Continued
Money not only talks, but it sings and dances. Therefore, when the Federal Reserve Bank talk’s people not only listen, but they analyze, strategize, speculate, and more. The Fed’s power has significant influence over global financial markets and the world, making their words and actions of the utmost importance to us all. Given the recent … Continued
Investing in industries that enjoy significant subsidies may carry additional risks. Subsidies, typically granted by government to support desired public policy, can also be revoked or materially altered. For example, home solar panel systems have seen considerable growth, particularly in states that have mandated large payouts to residents who generate more renewable energy than they … Continued
A recent article in The Wall Street Journal indicated that banks have become more aggressive in pursuing home equity loans. According to new data from mortgage data firm CoreLogic Inc, lenders extended just over $156 billion in home equity lines of credit in 2015, the largest dollar amount since 2007, the beginning of the housing … Continued
A recent headline in the Sunday Free Press, “Does MDEQ (Michigan Department of Environmental Quality) Put Economic Growth Ahead of People?” suggests that the writer may not fully understand the importance of economic growth and the extent that individuals benefit from a strong economy. Responsible and informed regulation should be able to protect the public … Continued
Last May my colleague Marisa Bradbury wrote a great piece titled, “Putting Investors First,” in which she articulated the title as the principle of the fiduciary standard. Please read it if you have not had a chance and you are interested in this hot topic, https://sigmainvestments.com/wp-content/uploads/2015/05/May-SigSumm-2015.pdf. In the investment advisory business, there are two standards … Continued
According to Wikipedia, the term saber-rattling, was based on an incident in Chilean history that took place on September 3, 1924, when a group of young military officers protested against the political class and the postponement of social measures by rattling their sabers within their scabbards. The term is now applied generally to cover an … Continued
The world is awash in irresponsible borrowing. Governments, companies and individuals borrow money without a clear path to repayment. In addition, governments and companies commit to long-term obligations, primarily in the areas of retirement and health care, without appropriate funding. Unfunded liabilities are, for all practical purposes, debt. This tendency has been exacerbated by unusually … Continued
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