On the Horizon

By |2017-12-29T07:46:32+00:00December 29th, 2017|Global Market Update|

What does 2018 look like? Photo: Dave Meier. Source: Picography On its face, next year looks a lot like this year, just starting from a higher level. The economy – already growing well – should accelerate. A coordinated global expansion is currently underway. This will lead unemployment to fall and wages to rise. That will push inflation marginally higher, but not too high. The Fed will respond with a couple of rate hikes, but new Fed Chair Jerome Powell will have his hands full. [...]

Making Records

By |2017-12-28T08:31:59+00:00December 28th, 2017|Global Market Update|

What kind of year was 2017? Vinyl record-cutting machine. Photo: JacoTen. Source: Wikipedia Looking back, it was a year of records. The stock market is closing at or near its all-time high; the Dow hit a record level 69 times this year (so far). And for the first time in a long time, the US wasn’t the strongest large market in the world. While the S&P 500 is up 22%, the Chinese stock market is up 24% in local terms and 31% in dollar [...]

Do You Hear?

By |2017-12-20T06:51:10+00:00December 20th, 2017|Global Market Update|

Have you heard the music this year? G.F. Handel by Philip Mercier. Source: Wikipedia The lights dim, the audience hushes. The notes of the overture begin. As the symphonic introduction winds down, anticipation builds. Soon the words to the first air ring out: “Comfort ye, comfort ye my people. Speak comfortably to Jerusalem and cry out that her warfare is ended, that her iniquity is pardoned.” For three centuries listeners have thrilled to the music of Handel’s Messiah. Its initially modest reception has grown [...]

She Sells Sushi Made by What?

By |2017-12-19T08:02:15+00:00December 19th, 2017|Global Market Update|

Are sushi robots coming? Photo: Alpha Lau. Source: Wikipedia Sushi is everywhere: in sushi restaurants, in grocery stores, even in gas stations. And it’s easy to see why. The bite-sized rice-and-fish combinations are convenient and savory. By virtue of the rice, vinegar, and soy sauce used in it, sushi is rich in the “umani” taste, one of the five major taste sensations. Sushi is low in fat and high in protein. It can be made with vegetables and brown rice, rather than fish and [...]

Nation Building, Nation Busting

By |2017-12-18T07:38:08+00:00December 18th, 2017|Global Market Update|

Why do some nations prosper, while other languish? North and South Korea from space. Source: NASA A common way for medical researchers to differentiate between genetic and environmental factors is to study identical twins. Identical twins share the same genes, so the effects of different factors can be evaluated. For example, scientists examined 79 pairs of adult identical twins where one twin had smoked at least five years longer than the other. They found that the smokers had more wrinkles, bigger jowls, and bags [...]

Getting Savings Right

By |2017-12-15T06:33:58+00:00December 15th, 2017|Global Market Update|

Why is it so hard to save? Photo: GeorgHH. Source: Wikipedia We often hear that there is a retirement crisis in this country. People aren’t saving enough today to fund their retirements tomorrow. Our national savings has declined from 10% in the 1980s to around 2.5% now. And if you save 2.5% of your salary for 40 years and put it in the bank, by the time you retire you’ll have set aside an amount equal to your salary. That’s not enough to retire, [...]

China Futures

By |2017-12-14T07:27:09+00:00December 14th, 2017|Global Market Update|

What’s happening in China? Pudong Skyline. Photo: Pjt56. Source: Wikipedia China is the second largest single economy in the world and over half the size of the US economy. It’s home to some of the largest – and fastest growing – tech companies: Tencent, Alibaba, Baidu, and others. And of course, over 1.4 billion people live there, the most populous nation on the planet. They import and export over $3.7 trillion of products every year. China’s growth over the past 30 years has been [...]

Making the Grade

By |2017-12-13T05:45:03+00:00December 13th, 2017|Global Market Update|

Can investors learn something from test-taking strategies? Public Domain. Source: US Navy It may be close to the end of the year, but it’s also college application season. A lot of high-school seniors are filling out the Common App, writing and re-writing essays, and anxiously awaiting their latest test scores. And there’s a test-taking technique that kids use to improve how they do on standardized tests that can help investors. It’s called elimination. When they come to a question where they haven’t got a [...]

Gold, Lead, and Collateral

By |2017-12-12T06:19:55+00:00December 12th, 2017|Global Market Update|

Collateral dominates structure. Page from Alchemy treatise, c. 1300. Source: Wikipedia That’s an investor’s way of saying that you can’t turn lead into gold. It’s been an investment theme of mine for as long as I’ve been managing money. I started my investment career trading bonds in the mid-‘80s. Mortgage-Backed Securities were a new thing. Investors were starting to learn about prepayment risk, as interest rates fell and borrowers refinanced their double-digit mortgages. All those full-faith-and-credit Ginnie Maes were paying off early, and investors [...]