As Time Goes By – Technology and Emerging Markets

By |2017-07-17T12:21:22+00:00April 14th, 2017|Global Market Update|

Technology advances are swift in the emerging markets. Photo: David Wilson. Source: Wikipedia The Templeton Emerging Markets Group recently noted the evolving make-up of the emerging market technology sector. In theory, an emerging market is an economy in transition from state controlled to one with increasing economic freedom. Along comes integration in the global marketplace and greater standards of living. A more familiar imagining of the emerging market is one of extraction: both of resources (commodities and labor) and cheap, manufactured goods. Global investment [...]

The Art of Economics

By |2017-07-17T12:21:22+00:00April 13th, 2017|Global Market Update|

What can art teach us about economics? Portrait of Joseph Haydn. Source: Royal College of Music People often discuss the economics of art – how supply and demand can raise the prices of Renaissance or Impressionist works to insane levels, or how ironic it is that great paintings can’t be sold for much while the artists are still alive. But art has something else to tell us about the productive process. There’s a lot that we just don’t understand. For example, in history we [...]

Make Banks Safe Again

By |2017-07-17T12:21:22+00:00April 12th, 2017|Global Market Update|

Are the big banks finally safe? Picture: New York Fed The Financial Crisis put bank safety and soundness fully in view. The serial bailouts or failures of Bear Stearns, AIG, Fannie and Freddie, Lehman, Merrill, and Washington Mutual put the global economy at risk. The problem was systemic: all the big banks were affected, because investors weren’t certain where their money would be safe. Bank stocks fell about 70%, and yields on their bonds rose about 4%. When this happens, banks cut back on [...]

Fishing for Value

By |2017-07-17T12:21:23+00:00April 11th, 2017|Global Market Update|

Is investing like fishing? Photo: João Pacheco. Source: Picjumbo In 1653 Izaak Walton published “The Compleat Angler,” a short treatise on fishing. In this little book he explains that fishing is a pursuit that can never be truly mastered. When you go fishing, there’s always a new lure or a new location or some other shiny new toy to try out. “But he that hopes to be a good angler,” Walton continues, “must not only bring an inquiring, searching, observing wit, but he must [...]

Benefits to Trade

By |2017-07-17T12:21:23+00:00April 10th, 2017|Global Market Update|

What’s your favorite business movie? Fair Use. Source: Wikipedia One of the best is “Trading Places,” a modern take on Mark Twain’s Prince and the Pauper starring Dan Ackroyd and Eddie Murphy. It tells the story of a privileged commodities broker and a homeless street hustler who are thrown together when they are made the unwitting subjects of an elaborate bet. Apart from a minor role by now-Senator Al Franken, it also includes a fairly accurate description of the commodities business, with scenes from [...]

Taxes, Income, and Freedom

By |2017-07-17T12:21:23+00:00April 7th, 2017|Global Market Update|

It’s April. Do you know where your income taxes are? Photo: Steve Buissine. Source: Pixabay Around the country people are reviewing their income from last year and calculating their taxes. Tax day is an extraordinary event: a couple years ago 140 million Americans told the government that they earned $9.7 trillion and paid $1.4 trillion in taxes. The lion’s share of those taxes came from the highest earners: the top 50% of taxpayers paid 97% of the taxes collected, and the infamous top 1% [...]

Homeward Bound

By |2017-07-17T12:21:23+00:00April 6th, 2017|Global Market Update|

Is now a good time to start international investing? Photo: Victor Hancek. Source: Picjumbo Most investors have a home-bias in their portfolio. That is, they own a higher percentage of domestic stocks than a globally diversified portfolio would indicate. This is true for folks who tout indexing as well as for active managers who pick stocks. US-based investors prefer US stocks; UK investors prefer shares listed in London; Japan-based investors prefer Japanese stocks, and so on. There are several reasons behind this. Familiarity bias [...]

Price, Quality, and Value

By |2017-07-17T12:21:23+00:00April 5th, 2017|Global Market Update|

Which is more important: price or quality? Photo: Victor Hanacek. Source: Picjumbo Ideally, you’d like to have both. But there’s an old saying in business: quality is remembered long after the price is forgotten. This quote is frequently attributed to Aldo Gucci, the founder of the Italian fashion company, but it had been a marketplace maxim long before he was around. It presents a bit of business common sense: people often forget how much they paid, but how a product performs is in their [...]

Risky Profiles

By |2017-07-17T12:21:26+00:00April 4th, 2017|Global Market Update|

What’s a risk profile? South face of Annapurna I. Photo: Gianni Scopinaro. Source: Flikr A risk profile is one of those questionnaires you fill out when you open an investment account. To many people, the task seems silly. We just want our money to work for us. And we often have multiple goals: saving for retirement, preserving a nest-egg, maybe a down payment on a house. The questions seem to push us into a box. Like many apparently pointless things in our lives, these [...]

Mile High Munchies

By |2017-07-17T12:21:26+00:00April 3rd, 2017|Global Market Update|

Well, no one saw this coming. Denver skyline Photo: Larry Johnson. Source: Wikipedia There’s a touching scene in Peter Hessler’s book “Country Driving” where a family in a small Chinese village receives a gift from the local Communist Party. It’s a framed skyline of a gleaming foreign city with a digital readout of the temperature, time, and date. The unnamed city was supposed to represent China’s bright future. The city was Denver; the year was 2005. Through foresight or good fortune, the Chinese Communist [...]