During periods of above average market volatility, or sharp moves in either direction, investors and advisors are likely to wonder if some action might be appropriate or expected. This natural reaction may be exacerbated by an endless stream of punditry and suggested strategies from CNBC and other media outlets. In most cases, the most appropriate … Continued
According to Wikipedia, misdirection is a form of deception in which the attention of an audience is focused on one thing in order to distract its attention from another. While misdirection has generally been associated with magicians, CEOs have not been immune to the opportunity. Investors should be careful in reacting to corporate announcements that … Continued
It is now clear that congressional budget compromises are an excuse to spend more on everyone’s wish list rather than to make hard decisions regarding appropriate priorities. Running up the deficit is not a recent phenomenon. Adding to the national debt has been the reality of both political parties for a long time, as no … Continued
The full quotation, attributed to Mike Tyson is, “everybody has a plan until they get punched in the mouth.” While Mr. Tyson was obviously talking about boxing, the same concept is probably equally relevant to investing. A sudden and sharp correction in the stock market, can feel like kick in the stomach. Most investors start … Continued
Often, governments start out trying to be all things to all citizens. Unfortunately, governments have a history of falling short on initial promises for a variety of reasons including, political bickering and trying to do too much at the cost of often not doing some things well. One might think that providing its citizens with … Continued
According to Wikipedia, saber rattling originated in Chile in 1924, when a group of young military officers protested against the political class and postponement of social measures by rattling the scabbards of their sabers against the floor. The term is now applied to cover any indication of military aggressiveness. Saber rattling currently can include such … Continued
In September 1986, “The Economist” introduced the Big Mac Index, as a semi-humorous illustration of purchasing power parity (PPP). PPP provides a test of the extent to which market exchange rates result in goods costing the same in different countries. The objective was to attempt to make exchange-rate theory a bit more understandable. PPP can … Continued
According to Wikipedia, wealth effect is the change in spending that accompanies a change in perceived wealth. Usually the wealth effect is positive: spending changes in the same direction as perceived wealth. People typically spend more overall when one of two things occur: when people actually are richer, or when people perceive themselves to be … Continued
According to Wikipedia, “in marketing strategy, first-mover advantage is the advantage gained by being the initial significant occupant of a market segment”. The first entrant often gains a competitive advantage and can be rewarded with exceptional profit margins and a monopoly-like status. However, not all first-movers are rewarded if the first-mover does not capitalize on … Continued
It is abundantly clear that society needs rules (regulations) in order to function. However, the rules need to be rational and serve the greater good rather than a means to achieve objectives that are not acceptable to the majority. Over the last year, the current administration, through executive orders, has been actively rolling back a … Continued
Meriam-Webster defines “coin of the realm” as: 1. The legal money of a country, or 2. Something valued or used as if it were money in a particular sphere. Investors and cryptocurrency enthusiasts should also consider another possible definition. A country’s coin of the realm (legal tender) is what the government (King) says it is. … Continued
Investors may want to consider the affect of too much information (TMI) on investment decisions. With CNBC broadcasting more than 12 hours every business day, it is easy to binge watch an endless flow of “news” which is often only someone’s opinion and frequently almost immediately contradicted by another commentator. Over the last several years … Continued
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