Week of December 18, 2023 The sharp rise in the Standard & Poor’s 500 stock index since the latter part of October has coincided in lock-step fashion with the equally sharp fall in the yield on the US 10 year Treasury Bond.  Inflationary pressures in the US have abated of late and this spurred the … Continued

Week of December 11, 2023 Have interest rates peaked, at least in the short term? Are equity prices poised to exceed former highs? Or are equity prices riding a “sugar high”? Does the recent resignation of the president of the University of Pennsylvania signal a movement away from extreme partisanship as both democrats and republicans … Continued

According to Wikipedia, an actuary is a professional, with advanced mathematical skills, who deals with the measurement and management of risk and uncertainty.  For this reason, actuaries are essential to the insurance and reinsurance industries.  Based on actuarial estimates, insurance companies can calculate premium levels that can be expected to meet future claims. Investors and … Continued

Week of December 4, 2023 Busting the “price gouging” myth. The deli pays $1 for bread/turkey, $1 for labor, and $1 for rent, meaning total costs are $3. The sandwich sells for $5 and profit is $2. Suppose, however, that the cost of materials, labor and rent double, totaling $6. But, the deli owner only … Continued

On July 20, 2017 we posted a blog titled, “Is Big Pharma A Pinata?’ It appears that the answer may be yes.  While healthcare availability and costs remain a major issue, it appears that government is disproportionately focused on prescription drugs. Milliman, a large independent actuarial and consulting firm, annually publishes the “Milliman Medical Index (MMI)”, … Continued

Week of November 27, 2023 The holiday-shortened week proved relatively uneventful in the capital markets, although equity prices continued to trend upward and interest rates on longer dated US Treasury securities stayed relatively flat. Our Signals remained unchanged. Bob Bilkie, CFA

According to press reports, Panasonic’s new Kansas 4-million-square-foot battery plant will double the local electric utility’s load, requiring significant upgrades to infrastructure.  In addition, Evergy will have to keep a coal-fired plant operational until at least 2028, after which the utility plans to transition from coal to natural gas, by the end of the decade.  … Continued

Week of November 20, 2023 The growing importance of social rifts and the declining importance of China as it relates to investment decisions are both reflected in our Signals this week. The larger Social/Culture Signal highlights the growing divide among Americans and their opinions on the two wars occurring in the world today. It appears … Continued

Week of November 13, 2023 The Standard & Poor’s 500 stock index closed at within 10% of its all-time high on Friday, November 10.  Clearly, the equity markets have climbed the proverbial “wall of worry” given the harsh geo-political risks that have arisen, punctuated by the Hamas massacre of Jews which led to Israel’s war … Continued

We have previously posted a number of blogs outlining California’s water problems.  We have noted that the issue of adequate fresh water supplies tended to reflect a lack of concerted political effort and the cyclicality of rain and snow fall. State officials recently reported that, as of the end of the September fiscal year, the state’s reservoirs … Continued

Week of November 6, 2023 We are moving our Monetary Policy Signal from yellow to green, following the announcement by the Fed that they will not be engineering another interest-rate increase before year end. Shortly on the heels of that announcement, the October employment data was released showing a reduction in job gains versus the … Continued

We appear to be at an energy crossroads as reliance on fossil fuels may be on the way out, presumably offset by an ascension of renewable energy.  At least that seems to be the conventional wisdom. Investors might want to take another look. All comments and suggestions are welcome. Walter J. Kirchberger, CFA