Facebook – Naughty or Nice?

By |2018-04-16T07:36:19+00:00April 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+00:00April 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+00:00April 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+00:00April 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+00:00April 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+00:00April 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 [...]

Trading Perspectives

By |2018-04-06T05:55:45+00:00April 6th, 2018|Global Market Update|

Are you a trader or an investor? Photo: Jakob Halun. Source: Wikimedia I started out in the financial business as a trader. A mid-sized bank I worked for put me on its trading desk – buying and selling Treasury Notes, futures, and options just about every day. It was addictive. I used technical and fundamental analysis, subscribed to charting services, and practically lived on my phone lines. Trading got into my blood. I moved on to dealing foreign exchange overseas for a big bank. [...]

Of Chaos and Control

By |2018-04-05T07:10:45+00:00April 5th, 2018|Global Market Update|

How do you deal with chaos in the market? Photo: Raj Vitthalpura. Source: Free Range Stock Photos It’s easy to freak out when you see how volatile the market has been, lately. One day the market is down 3%, the next it’s up. Yesterday the Dow was down over 500 points in the morning. Traders were freaking out over the prospects of a trade war. By the afternoon, folks had calmed down and the average was up a couple hundred points. How do you [...]

Upside-Down Investing

By |2018-04-03T07:24:06+00:00April 3rd, 2018|Global Market Update|

Invert. Always invert. Public Domain. Source: US Army Inversion is a solid analytical technique. Some problems are best solved by thinking backwards. The Stoics used this approach 2000 years ago. They called it “premeditatio malorum” – imagining what could go wrong. That way, they considered, you won’t be shocked and appalled when life sends you unpleasant surprises. We’re taught to do this behind the wheel. My instructor called it defensive driving, imagining what unpredictable moves other drivers might make. The NPR call-in show “Car [...]

Jujitsu Economics

By |2018-04-02T06:57:36+00:00April 2nd, 2018|Global Market Update|

How do you make use of something else’s strength? Photo: Pixabay When Wikipedia first came out, many educators panicked. They were threatened by the universally accessible source of detailed information, and told their students not to use it for primary research. But a few clever teachers found a way to make use of the service’s own inaccuracies. They started assigning their students Wikipedia entries – not to cite, but to fix. A similar thing is happening in health care. We have more of our [...]