Ten Commandments for Investors (Part 4)

By |2014-09-09T15:49:00+00:00June 13th, 2012|Global Market Update|

The principles of The Ten Commandments can be instructive us in many different endeavors, including investments. The Fourth Commandment is no exception. The Fourth Commandment has to do with the Sabbath: “Remember the Sabbath day.” It was an injunction to the ancient Hebrews to stop work for at least one day and remember how they had been delivered from slavery. It hearkens back to the account of Creation in Genesis, where God is described as creating the world in six days, and on the [...]

Ten Commandments for Investors (Part 3)

By |2014-09-09T15:48:37+00:00June 12th, 2012|Global Market Update|

The Third Commandment is not to take the name of the Lord in vain. How does this apply to investors? The Third Commandment is often viewed as a proscription against cursing and profanity, and it certainly is that. In modern culture, certain words and phrases are off limits. Even more significant to the ancient Hebrews, however, was the actual name of their God. For in the ancient world, to name something was to have power over that thing—thus the Third Commandment was an exhortation [...]

Ten Commandments for Investors (Part 2)

By |2014-09-09T15:48:03+00:00June 11th, 2012|Global Market Update|

The Ten Commandments provide guidance for the Faithful. With a little understanding, they can guide investors as well. The Ten Commandments have been described as “negative morality.” They lay out a series of proscriptions and “Thou Shalt Nots” that keep followers of Jehovah from straying. With investors, negative exhortations and prohibitions are similarly useful. Much of investing is a loser’s game, in which you win by not making mistakes. “Thou Shalt Nots” keep us from making simple, unforced errors that cause many investment losses. [...]

Ten Commandments for Investors (Part 1)

By |2014-09-09T15:47:17+00:00June 8th, 2012|Global Market Update|

Charlton Heston made the Ten Commandments famous on the big screen. But they can be practical for investors as well. A classical approach to investing recognizes that investing is just part of life. Markets reflect human nature, with all its strengths and weaknesses. And the great works of civilization—in literature, art, music, and religion—can also illuminate our character. So it shouldn’t be surprising if we can divine investment lessons from some of our great cultural icons. Without a doubt, the Ten Commandments rank as [...]

Cross (Border) of Gold

By |2014-09-09T15:45:56+00:00June 7th, 2012|Global Market Update|

If I owe you a thousand dollars and can’t pay, I have a problem. But if I owe you a million bucks and can’t pay, you have a problem. That’s the logic behind the deal brewing between Spain and Germany. Spain’s banks are overextended and undercapitalized, an artifact of a real-estate boom and bust that was especially sharp. The risk that systemic bank failure in Spain could trigger financial contagion across Europe is real. A run on Spanish banks could easily trigger a run [...]

Company Policy

By |2014-09-09T15:45:20+00:00June 6th, 2012|Global Market Update|

Why do big companies exist? It’s not a trivial question. In theory, we could all work as independent contractors, offering our labor to one another and gaining by exchange. But we would have to devote a lot of time to finding markets for our work, negotiating prices, and getting paid—administrative tasks that aren’t productive. Those kind of transaction costs act like sand in the gears of an economy, and companies eliminate them, or at least reduce them to a minimum through their organization. Still, [...]

Getting to “Ja”

By |2014-09-09T15:44:22+00:00June 5th, 2012|Global Market Update|

Are the Germans coming to the table? Throughout the Euro-zone crisis the question has always been, “Will the Germans be willing to support the smaller countries like Greece and Portugal” Just as in 1789 the key to the fledgling American republic wasn’t Delaware and Rhode Island, but Pennsylvania, Virginia, and New York, the key to the stability of the European experiment isn’t the peripheral countries, but the core: Germany and France. And getting the Germans to agree to a closer fiscal union has always [...]

Spanish Fleas?

By |2014-09-09T15:43:51+00:00June 4th, 2012|Global Market Update|

What’s up with the markets? Once again Europe appears to be ground zero in the global economy. Like last August, concerns about contagion within the Euro-zone are encouraging investors over there to move their cash to safe havens in Switzerland, Japan, and the US. We’ve seen the dollar rally against the Euro, as our stock market pulls back and our bond market flirts with record low yields. Greece, while problematic, isn’t the major issue. It’s Spain. After their government took over one of its [...]

Talent Search

By |2014-09-09T15:43:26+00:00June 1st, 2012|Global Market Update|

It used to be that who you knew mattered more than what you knew when it came to finding a job. But it turns out that where you live matters even more. Today the Labor Department will publish its monthly jobs report. That report combines a survey of businesses with a survey of households to give us the unemployment rate and an estimate of how many jobs were created or eliminated last month. It’s important, as the dynamics of the labor market are a [...]