Performance, like beauty, is in the eye of the beholder. Both are very difficult to define and do not lend themselves to all inclusive metrics. Think about it. The market is up, your portfolio is up, how is it doing? Compared to what? The Dow Jones Industrials, the S&P 500, small caps, mid caps, EAFE, … Continued
Markets may again be reflecting concern over a renewal of the rancor and wrangling over budgets and debt limits in Washington, which suggests that investors should focus on the potential impact on portfolios. Budgeting is simple in theory but difficult in practice. Spending more than you are taking in, whether it results in a budget … Continued
Lost in the hoopla of Obamacare website failures, government shutdowns and the Detroit Tigers playoff chase, are economic developments that deserve greater attention and scrutiny. One of the services we subscribe to, Stratfor Global Intelligence, has recently been publishing essays regarding prospective positive developments on the African continent. This region is known for its rich … Continued
I am somewhat bemused by today’s market action. Earlier today, ADP reported that U.S. companies added 215,000 jobs in November, the biggest monthly rise in over a year. This was much better than what economists had anticipated. At the same time, new home sales also posted a large percentage increase albeit from a low base. … Continued
This is not a prediction but may be a plausible possibility. Consider: § With oil currently trading at approximately $95.00 per barrel (down from a recent high of $110), gasoline is approaching $3.00 per gallon. § Natural Gas, at approximately $4.00 per MCF, is trading at a heating energy equivalent of $24.00 per barrel of … Continued
Many couples when celebrating an anniversary exchange cards and go out for dinner. When a company celebrates an important milestone, generally they choose to throw a gala celebration and wine and dine their clients and colleagues. Late last year the Sigma team discussed our 40th anniversary approaching and how we would choose to celebrate it. … Continued
Wise old farmers are believed to have long had a saying: “Don’t eat your seed corn.” In other words, every seed that comes into your hands has the potential to be planted and provide more corn in the future, or to be consumed. The analogy for investors is: Every dollar that comes into your hands … Continued
The stock market is generally considered to be a leading indicator. That is, current market action reflects future expectations. The stock market largely shrugged off the government shutdown and the hyperbole surrounding a possible default. The apparent resolution of the October 17 “crisis” was to do it all over again early next year. Talk of … Continued
Recent polls taken during the ongoing government slowdown indicate that the US citizenry is losing confidence in most federal government leaders (President Obama, Republicans, Congress, etc.). At the same time, the prices of common stock indexes are near all-time highs. In elections, voters make their choices by casting their ballots. In investment portfolios, investors signal … Continued
The US Government’s annual budget is approximately $3.5 trillion. When we dig deeper, we find the following expenditures, expressed in $ (billions) and %: Medicare and Medicaid $802 23% Social Security $768 22% Defense $670 19% Discretionary $615 17% Other Mandatory $461 13% Net Interest $223 6% From this perspective, it seems highly unlikely that … Continued
Wikipedia defines hyperbole as the use of exaggeration as a rhetorical device or figure of speech. It may be used to evoke strong feelings or to create a strong impression. In the current heated political environment, hyperbole seems to be the primary method of communication. Investors need to be very careful to parse what is … Continued
According to a report in Yahoo! Finance on September 30, 2013 and quoting Sam Stovall, “The peak-to-trough decline associated with the shutdown of the U.S. government between 12/16/95 and 1/6/96 saw the S&P 500 decline 3.7%, only to witness a jump of 10.5% in the subsequent month.” Comments and questions are welcomed. Bob Bilkie, CFA
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