Stagnation Nation?

By |2017-07-17T12:22:05+00:00April 15th, 2016|Global Market Update|

Why is the economy moving so slowly? Photo: Osvaldo Gago. Source: Wikimedia There’s no question that economic growth has slowed. Over the past decade, the US economy has grown about 1.5% per year. The decade before that, it grew 3.4%, before that, 3%, and so on. What could account for poor performance? A big part of any economy is labor growth. If there aren’t enough workers, the economy can’t grow. For all the talk about robots and self-driving cars, we still need people to [...]

Good, Bad, or Indifferent

By |2017-07-17T12:22:05+00:00April 14th, 2016|Global Market Update|

Are you a good person? Photo: Joe Murphy. Source: Pixabay Most folks think they are. In fact, ask a group to raise their hands if they’re more ethical than average, and almost all the hands will shoot up. Part of this is personal bias—we think we’re better than average at most things. But ethics is particularly important: so much of our economy depends on trust. From Enron to Bernie Madoff to the Panama Papers, that trust has been broken again and again. But sometimes [...]

Twilight of the Traders

By |2017-07-17T12:22:05+00:00April 13th, 2016|Global Market Update|

Twilight of the Traders Is trading going away? Photo: Phaedra Wilkinson. Source: Morguefile After decades of transmitting trades by phone, J.P. Morgan, Citibank, Morgan Stanley and other major trading firms may be getting close to cutting the cord. Some primary dealers are exploring moving their trading systems to an internet-based cloud computing service. The advantages are clear: better security, greater flexibility, and lower costs. For decades Wall Street relied on telephone lines, hoot-and-holler boxes, and local servers to transfer trading data and record phone [...]

Sticky Business

By |2017-07-17T12:22:05+00:00April 12th, 2016|Global Market Update|

Why is it so hard to communicate? Photo: Andrea Church. Source: Morguefile Anyone who’s ever tried to teach a complex idea has run into the “knowledge curse”—if you know something really well, it’s hard to think about it from the perspective of people who don’t have your level of understanding. My kids have this problem when they try to teach me about the latest app on their smartphones. It’s not that I’m dumb, it’s just that I don’t have their experience. Investment people face [...]

By Any Other Name …

By |2017-07-17T12:22:05+00:00April 11th, 2016|Global Market Update|

Do names matter? Photo: Laitche. Source: Wikimedia In Romeo and Juliet,Juliet famously questions if a rose would smell just as sweet if we called it something else. And the answer to that is, both yes and no. The fragrance would be the same, of course. But the “sweetness”? That’s purely subjective. It’s based on our experience and expectations, as well as what we might compare it to. In “The Hunger Games” the villain -- President Snow -- always wears a rose, and he uses [...]

Good Investors, Good Losers

By |2017-07-17T12:22:05+00:00April 8th, 2016|Global Market Update|

How can you improve your portfolio? Photo: Natureworks. Source: Morguefile One way is to limit your losses. In any portfolio, there will be items that go up and items that go down. We don’t know the future, and in spite of all our research, some investments simply don’t work out. Maybe the economy shifted in an unexpected way; maybe management paid too much for an acquisition. Whatever the reason, something goes wrong and you have a loss. What do you do? The first thing [...]

Retiring the Experts

By |2017-07-17T12:22:05+00:00April 7th, 2016|Global Market Update|

Why don’t people save enough? Photo: Dika Seva. Source: Unsplash You’ve heard the advice: “Put enough aside when you’re in your 20s, and you can have millions by the time you’re 60. Just stop drinking a latte, and you, too, can be a millionaire.” Okay, let’s do the math. Suppose you give up that latte and save $5 four days per week—you can have one latte. And let’s assume you do that 50 weeks out of the year. That’s $1,000. If you do this [...]

Riding the Tiger

By |2017-07-17T12:22:05+00:00April 6th, 2016|Global Market Update|

Whatever happened to Tiger Woods? Photo: Tom Hipps. Source: US Army I’ve written about Tiger before. The golfer has been truly phenomenal. In 1997, at age 21, he became the youngest golfer ever to win The Masters at Augusta National in Georgia. His driving, his short game, his putting—all came together, again and again, to deliver win after win. Those who saw him play were convinced they were seeing something historic: a combination of skills and strength not likely to be seen again. Tiger, [...]

Rich Land, Poor Land

By |2017-07-17T12:22:05+00:00April 5th, 2016|Global Market Update|

Why are some countries rich while others remain poor? Source: Growth Economics Blog Some countries are wealthier than others. This fact has inspired all kinds of discussion and analysis over the years, from Adam Smith’s The Wealth of Nations to Marx’s Das Kapital, to Jared Diamond’s Guns, Germs, and Steel. One factor is geography. Some places have more resources: fertile soil, natural ports, precious metals. But it’s not enough to have stuff. A society has to use it effectively. North America has always been [...]

Passion and Performance

By |2017-07-17T12:22:06+00:00April 4th, 2016|Global Market Update|

Why is passion so powerful? German Wright Flyer stamp. Source: Wikipedia In 1890 Samuel Pierpont Langley wanted to be the first man to fly a powered airplane. He did what many successful administrators do: he assembled the most powerful team he could think of. He got a grant from the War Department; he hired engineers, inventors, and a test pilot. What he didn’t understand—the internal combustion engine, for example—he contracted out. He courted the press and famous writers, like Rudyard Kipling. He had already [...]