Substance and Signals

By |2018-06-29T16:39:20+00:00June 29th, 2018|Global Market Update|

What is college good for? Photo: Javier Capella. Source: US Navy As millions of parents around the country face billions in tuition bills for the coming school year, it’s a question worth asking. The answer seems obvious: the financial benefits from college appear greater than ever. The earnings premium from a college diploma is now 73%: folks with undergraduate degrees earn 73% more, on average, than those who never went to college. This is up from 50% in the 1970s. Of course, your mileage [...]

Self-Driving Groceries?

By |2018-06-29T05:23:27+00:00June 29th, 2018|Global Market Update|

Remember WebVan? Photo: Mark Coggins. Source: Wikimedia The now-defunct grocery-delivery service has become an example of some of the excesses of the dot-com era. Executives with no experience in the grocery business were going to undercut and revolutionize how we buy groceries by offering consumers a check-the-box website and home delivery. The company was founded in 1996, went public in 1999, and declared bankruptcy in 2001. At its peak, they employed 4,400 people, had $180 million in sales, and served ten major metropolitan areas. [...]

Helping Habits Succeed

By |2018-06-27T15:02:27+00:00June 27th, 2018|Global Market Update|

How can we establish good habits? Photo: Jack Moreh. Source: Free Range Stock Photos The key to reaching long-term goals is establishing good, sustainable habits. Whether it’s saving for retirement or losing weight or improving your smile, we have to adjust our daily routines in order to reach our final destination. Habits can be powerful and empowering. Along the 2,600-mile Pacific Coast Trail, scores of hikers quit right around mile 100, just where the mountains start to get big. They hadn’t established the routine [...]

Up-Shift or Down?

By |2018-06-26T08:06:37+00:00June 26th, 2018|Global Market Update|

Where will autonomous vehicles (AVs) take us? Waymo AV. Source: Wikimedia Self-driving cars are in the news. In Phoenix last month, Waymo – Google’s autonomous vehicle project – announced they have plans to let everyone in the Arizona city request a driverless ride before year-end. They’ve ordered thousands of electric Chrysler Pacifica minivans and Jaguar I-Pace SUVs. They trick them out with lidar and other sensors, tied in with sophisticated AI algorithms and servo controls. GM has plans to start a ride-hailing service using [...]

Receiving Guidance

By |2018-06-25T17:01:00+00:00June 25th, 2018|Global Market Update|

Why do companies provide quarterly earnings guidance? Photo: Michael Richter. Source: Morguefile Every few months we hear about companies that beat expectations for their quarterly earnings, or fall short, or do something different. Sometimes there are business combinations or spin-offs that confuse the issue. Other times the accounting profession changes the way corporations need to report their financial numbers. Some CEOs criticize the market’s quarterly earnings derby. They note that quarterly earnings reports are more art than science. Quarterly numbers aren’t even audited – [...]

Libraries and Lions

By |2018-06-22T08:59:08+00:00June 22nd, 2018|Global Market Update|

Are libraries becoming an endangered species? Marble lion outside NY Public Library, Public Domain. Source: Wikimedia Public libraries have been a staple of American life since Ben Franklin helped found the Library Company of Philadelphia in 1731. He and his friends started their membership-based library to pool their resources and acquire and curate a collection of books and papers. In its founding document, the Company could lend books to non-members if they put up a security deposit. The deposit was returned when the books [...]

Emerging from Where?

By |2018-06-21T06:18:11+00:00June 21st, 2018|Global Market Update|

Are the wheels about to fall off Emerging Markets? Photo: Alvimann. Source: Morguefile Two decades ago, emerging countries were facing economic pressure from a rising dollar, slowing domestic economies, and huge financing needs. The Asian Financial crisis caused local stock markets and currencies to plummet. There was massive economic hardship, with riots and political turmoil in Indonesia and the Philippines. Developed markets looked like they might catch the “Asian Contagion,” and our stock markets fell by 20% or more. Is something similar happening now? [...]

Extrapolating the Future

By |2018-06-20T06:59:16+00:00June 20th, 2018|Global Market Update|

Remember 2001: A Space Odyssey? Fair Use. Movie poster by Robert McCall. Source: Wikipedia The movie was released in 1968, and was both praised and panned at the time. Some critics called it the most extraordinary movie of any time or place, while others said that it was only extraordinarily dull. The file did run almost 3 hours, and contains no dialogue for the first and last 20 minutes. It made less than $5 million on the weekend when it opened. Now it’s recognized [...]

Consuming Liquidity

By |2018-06-19T10:04:12+00:00June 19th, 2018|Global Market Update|

What is a liquid alternative? Coffeeshop in Greenwich Village. Photo: Joe Mabel. Source: Wikimedia Alternative investing is investing in something other than traditional stocks, bonds, and cash. It can include real-estate, commodities, precious metals, or collectibles, like art and wine. Its appeal is their lack of correlation with the major asset classes. If these assets rise in price but zig when other things zag, they should be able to reduce a portfolio’s risk while still contributing to its return. That’s how it’s supposed to [...]

Wealth Wanderings

By |2018-06-19T10:03:45+00:00June 18th, 2018|Global Market Update|

Is the wealth effect real? Photo: hcmholms. Source: 500px It makes some sense. After all, wealthy people spend more than poor people. And they buy fancier clothes, fancier food, and fancier toys. So if the Fed wants to boost the economy – which is 70% consumer spending – why wouldn’t they try to lift asset prices and juice people’s wealth? But just what makes someone wealth? Is it their assets? Or their income? Let’s try a thought experiment. Imagine you have a $5 million [...]