“My Kingdom for a Forecast!”

By |2014-09-18T09:58:40+00:00July 16th, 2014|Global Market Update|

Are equities facing a “Summer of Discontent?” After rising 5% since late May, equities can’t seem to get out of their own way. Fed Chair Janet Yellen explained yesterday that while the economy still needs a lot of support from monetary policy, it is improving. There’s still a lot of slack in the labor market, but if the labor market improves faster than expected, they may raise rates more quickly than most folks anticipate. Unemployment is currently just above 6%, but its fall from [...]

Yielding Risk

By |2014-09-18T09:59:00+00:00July 11th, 2014|Global Market Update|

What can investors do about low interest rates? It’s no surprise that interest rates are at record low levels. Over the past decade, 10-year government bonds in the US, Germany, and England have fallen from 6% to almost 1%. The drop in yields has provided great opportunities for capital appreciation from long-term bonds, but investors now are faced with a dilemma: continue to invest in long-term bonds and run the risk of a price decline, or go with short-term instruments that don’t even earn [...]

What a Work is Research!

By |2014-07-10T10:46:50+00:00July 10th, 2014|Global Market Update|

How do you know what’s happened? That’s what investors need to understand. How many cases of Coca-Cola shipped last year? How much new cash did Apple generate? How is trend for tax revenue in Puerto Rico? Current investments and future market values depend on the answers to these questions. But as hard as investors try to find the answers, there are managers who want to hide them.. It might be to qualify for an incentive payment, it might be to avoid an embarrassing conversation. [...]

What’s In A Bull Market?

By |2014-07-09T11:32:55+00:00July 9th, 2014|Global Market Update|

Is the stock market in a bubble? The US stock market has been rising now for 5 ½ years. It’s hitting record levels. Mergers and acquisitions are taking off. The S&P 500 is up 190% from the bottom it recorded in March 2009. And a lot of folks are worried. Headlines tell investors to move to cash. Charts come out that compare the current market to 1987, warning people that a 30% correction could be in the works. What to do? By some measures [...]

Investment Models

By |2017-07-17T12:34:16+00:00July 8th, 2014|Global Market Update|

Do you have any heroes? Dante’s final volume is filled with heroes of his faith. Because the Paradise is an allegory of the soul’s pilgrimage towards God, he describes heaven as filled with all kinds of good examples: theologians, jurists, rulers, philosophers, and so on. They advise Dante along the way. Similarly, investors can gain wisdom from examining the lives and approaches of investors who have taken various approaches to their art: value investors, growth investors, quantitative managers, shareholder activists—there are many ways to [...]

Dante: Making It

By |2017-07-17T12:34:16+00:00July 7th, 2014|Global Market Update|

Greed isn’t the only investment sin. One of the pleasures of reading the classics is being reminded of things we know but can’t call to mind right away. Such is the cash with Dante’s Purgatory, the second, and perhaps least-read volume of his Divine Comedy. That’s a shame, because the Purgatory is filled with practical advice. The Inferno is peopled with folks Dante didn’t like, and Paradise is filled with saints and other heroes, but Purgatory seems to deal with the trials and troubles [...]

Dante’s Inferno: Greed

By |2014-07-02T10:42:48+00:00July 2nd, 2014|Global Market Update|

Is greed good? That was the proposition Gordon Gekko put forth in the Oliver Stone movie Wall Street. But most people don’t think so. We see that greed was at the heart the recent financial crisis, where a real-estate bubble fed by easy credit almost brought down the entire global banking system. Five years later, the economy still seems stuck in second gear. Which is why there is so much emphasis on wealth inequality now. The very rich—the .001 percent—control a huge portion of [...]

Dante’s Inferno: The Loser’s Game

By |2014-07-01T11:09:46+00:00July 1st, 2014|Global Market Update|

What can go wrong, will go wrong. That’s something we learn every day. Even when we establish investment goals and plan how to meet those goals, there are myriad details that can trip us up. Whether it’s recordkeeping or settlement or trade execution or custody, little things matter—and little things add up to big things. Dante’s Inferno presents a picture of what can go wrong. Mid-way through his life’s journey, exiled and unable to return home, he looked at the problems in the world [...]