The Highs and the Lows

By | 2018-04-20T07:42:25+00:00 April 20th, 2018|Global Market Update|

Quality is destiny. Joe Kittinger’s 100,000 foot jump. Source: US Air Force Aldo Gucci, the Italian fashion king, is supposed to have said, “Quality is remembered long after price is forgotten.” People may forget how much they paid, but how a product performs is in their face every day. That cheap suit doesn’t look thrifty, it just looks cheap. The same can be said of investments. How much you pay for your investments matters a lot. The price you pay is a big factor [...]

Hardware and Software

By | 2018-04-19T06:38:55+00:00 April 19th, 2018|Global Market Update|

Hardware makes the future possible. Software make it happen. Public Domain. Source: NASA That’s what I think about when I think about the robotics innovations that are poised to change our lives: drones, driverless cars, virtual assistants. These technologies are built around things we already know pretty well: cars, helicopters, and our smartphones. But by adding sophisticated software, they are about to make a big difference in the world. Take driverless cars. I had a personal driver once, and it was great. I temporarily [...]

Odds-On Investing

By | 2018-04-18T06:27:32+00:00 April 18th, 2018|Global Market Update|

“Don’t tell me the odds.” Photo: Michael Parzchowski. Source: Unsplash That’s how a lot of people approach gambling. For them, it’s entertainment. The risk associated with placing a bet and waiting for the outcome creates a certain exhilaration, independent of the outcome. It’s why slot machines and horse tracks are so popular, even people know that the odds are against them. People don’t want to know the odds because that information detract from the excitement. It’s fun to dream of making that big score, [...]

Investing by Starlight

By | 2018-04-17T06:50:01+00:00 April 17th, 2018|Global Market Update|

Every decade or so, a new investment star is born. Van Gogh’s “Starry Night.” Source: MOMA In the ‘60s it was growth stocks. In the ‘70s it was gold. In the ‘80s we all turned Japanese. The ‘90s had the Nasdaq. The ‘00s saw China’s growth. And now we have the data giants. Each one of these markets rallied some 10-fold during its heyday. What’s next? One approach is to look for the asset that no one wants. In the early ‘80s Japan just [...]

Facebook – Naughty or Nice?

By | 2018-04-16T07:36:19+00:00 April 16th, 2018|Global Market Update|

What does Mark Zuckerberg know about us? Photo: President of Mexico. Source: Wikipedia During the financial crisis we learned that some banks are TBTF, Too Big To Fail. They’re so critical to the global economy, with assets and liabilities in so many places that they’re essential to our financial plumbing. Lehman’s bankruptcy proved this, rippling through the system and leading to millions of layoffs. Then, when officials failed to indict HSBC and other global banks for money-laundering violations, they were called TBTP – Too [...]

Riding on Air

By | 2018-04-13T07:00:49+00:00 April 13th, 2018|Global Market Update|

Is our economy enjoying economic tailwinds right now? Illustration of the polar jet stream. Public Domain. Source: NASA/Goddard Space Flight Center A few months ago, I flew from LA to Boston and the flight took a lot less time than I anticipated. The reason was the polar jet stream had shifted south, and our ground speed was over 100 miles per hour faster than normal. The jet stream can make your average airliner perform much better than expected. Recently, Fed Chair Jerome Powel, Vice [...]

Coffee Cup Retirement

By | 2018-04-12T06:54:57+00:00 April 12th, 2018|Global Market Update|

Can we retire on our latte’s? Photo: Engin Akyurt. Source: Pixabay You’ve heard the advice: “Put enough aside when you’re in your 20s, and you can have retire with millions by the time you turn 60. Just give up your daily latte, and you, too, can be a millionaire.” But let’s do the math. Suppose we give up that daily latte and save $5 per day. If we invest that in the stock market at the long-run return, after inflation return, we’ll end up [...]

Hearing the Sirens’ Song

By | 2018-04-11T05:42:39+00:00 April 11th, 2018|Global Market Update|

Investing is an odyssey Photo: Gerhard Bögner. Source: Pixabay There’s a passage in Homer’s Odyssey that describes the Sirens – beautiful creatures with the faces of girls and the bodies of birds. Their magical song promises untold, wonderful knowledge, but it will actually lure sailors to their deaths upon the reefs that surround the Sirens’ island. Watch out, Odysseus is warned. If he listens to them, he’ll never get home. But Odysseus wants to hear their song. When he gets close to the island, [...]

I Love to Tell the Story

By | 2018-04-10T07:47:09+00:00 April 10th, 2018|Global Market Update|

We live by the stories we tell. Photo: Rawpixel. Source: Pixabay Every day we take in petabytes of data. What the weather is, how we’re feeling, what the coffee tastes like. But we simply can’t process all the information. Even with built-in DNA computers and quantum computations, our brains can only handle so much. So we construct narratives to put the information into context – to give it meaning – and to help us remember the details. The problem is, some of those stories [...]

Searching for Inspiration

By | 2018-04-09T06:05:27+00:00 April 9th, 2018|Global Market Update|

Why do our best ideas often come to us when we’re least looking for them? Photo: Composita. Source: Pixabay Creativity is a funny thing. Creative people are at the heart of technological progress, whether it’s science, engineering, or art. Ancient cultures saw inspiration as a gift from the gods, a literal bolt out of the blue. That’s why great works of literature often start off with a prayer to the gods. But creativity is a disciplined process as well, where people have to exercise [...]