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
This is a debate that has been going on since the invention of index funds and is likely to remain unresolved. An article in last weekend’s Wall Street Journal suggested that this is no stock pickers market. Perhaps, perhaps not. There is probably no right answer and, even if a strong argument can be made … Continued
Last Thursday Ben Bernanke surprised investors by announcing the Fed was going to indefinitely continue its efforts to stimulate economic growth. It has been doing this by buying $85 billion per month of bonds and keeping long-term interest rates low. Earlier in the year, Bernanke, citing an improving economy, hinted that the Fed may taper … Continued
As we mark the five year anniversary of the financial crisis we have many reflections. I will spare myself and readers a rehash of the gut wrenching feelings most of us had at the time and instead reflect on some of the progress we have made. Five years ago there were many companies in Corporate … Continued
Yes and Yes. But I think most observers would agree that a Rolex is much more than a time piece. For some it may be a fashion statement, a status symbol, a store of value, or something else. At a time when wearing a watch seems to be giving way to personal time keeping by … Continued
Based on the latest government data, the US economy is barely limping along, despite near record low interest rates. While the unemployment rate has fallen moderately, it is not reflecting the large number of citizens that are underemployed or have essentially “given up”. Perhaps a more realistic view of the job situation is the percentage … Continued
It seems that dithering is going around. In my experience, investors can be particularly prone to dithering, especially during periods of dramatic headlines and above average market volatility. My suggestion: Stay the course! You or you and your advisor(s) should have previously developed well-thought-out, long-term portfolio objectives, specifically tailored to your long-term goals. Decisions in … Continued
Much is being written about the dilemma that President Obama faces on what to do about Syria. This issue has far more to do with politics, both domestically and globally, than it does with investing. From an investment perspective, the more perceived risk (wars, strife, economic imbalances, etc.), the higher the discount rate and vice-versa. … Continued
According to Wikipedia “In parliamentary systems of government, the term loyal opposition is applied collectively to the opposition parties in the legislature that indicate that the non-governing parties may oppose the actions of the sitting cabinet while remaining loyal to the source of the government’s power.” This suggests that the majority party also owes a … Continued
I was stunned last week by this event. Not the event itself but rather coverage of it. To help me keep abreast of market activity during the day I keep CNBC on in my office (albeit on mute after nine am). However, I was driving in my car listening to CNBC when the outage was … Continued
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