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The Global Market Update is curated by Douglas Tengdin, CFA an employee of Charter Trust Company.
The opinions expressed herein are those of the author and do not necessarily represent the views of Charter Trust Company.
Investments may involve investment risk, including the possible loss of value.

The 3 Billion Dollar Question

By | July 18th, 2010|

What are they going to do with all that cash? Over the past 3 years, corporations have built up quite a nest egg. Over $3 trillion in cash sits on corporate balance sheets, the fruit of years of rising margins and a formerly booming economy. When the downturn came, corporations cut costs to protect themselves. Now they have a cash war-chest. What are they going [...]

The Rise of Policy

By | July 15th, 2010|

Trading is dead. Long live policy. Over the past few years we’ve seen the results of trading on the global economy. The trading mentality encouraged the big banks to relax their credit standards because they could always sell loans on the secondary market. The trading mentality caused buyout firms to pay ever-higher prices for ever-more questionable deals. The trading mentality caused Goldman to engineer a [...]

50/50 World

By | July 14th, 2010|

Well, we have another hung parliament. Earlier this week the Democratic Party of Japan failed to win a majority in their upper house elections. This is the latest 50/50 election. England, Canada, and Israel all have minority governments that require the leading party to form a coalition. Hung parliaments are often seen as negative. It’s hard for a coalition to make the hard choices necessary [...]

Northern Exposure

By | July 13th, 2010|

Can Canada serve as a financial regulatory model? At its heart, banking moves cash from those who have it to those who need it. It may be small depositors and large borrowers, or the other way around. This intermediation is essential. Otherwise, the cash can’t get where it’s needed and growth opportunities go undeveloped. The more sophisticated the economy, the more complex the banking system. [...]

Building Pressure (BP)?

By | July 12th, 2010|

Could BP go bankrupt? A lot of people are asking that question. The company has already spent $3.5 billion on the cleanup and has pledge to spend at least $20 billion on reparations. But since civil fines could total tens of billions, and punitive measures are often three times this, could a court decision force BP into bankruptcy? After all, the company has a net [...]

Exchanging Places

By | July 11th, 2010|

A lot of people are interested in currencies. With Exchange Traded Funds linked to currencies, it’s easier than ever to take a position on the dollar. For those folks, I have just one word: don’t. When you look at an investment, you need to understand what you’re buying. In a market economy, wealth is created by enterprise. Stocks represent ownership of those businesses. Bonds are [...]

Lake Wobegon Investing

By | July 9th, 2010|

“Raise your hand if you’re an above-average driver.” Ask that question in any group and see how many hands go up. Usually it’s way more than half. That’s because we’re pretty overconfident. We think we know more than we do, and we think that we’re better than we are. It’s not just because people are arrogant. It’s also because the folks who lack a true [...]

The Emotional Investor

By | July 8th, 2010|

“Don’t tell me not to be emotional!” How often have we heard these words yelled, implied, or quietly affirmed. But our own lack of rationality is often a major obstacle to our own success. Or at least, our failure to acknowledge our lack of rationality gets in the way. Let’s face it: we’re emotional creatures. We hope, dream, panic, and run away. We’re built that [...]

Successful Failures

By | July 6th, 2010|

Why is it so hard to invest successfully? Study after study has shown that the average investor doesn’t do as well as a low-cost index fund. Since low-cost index funds are everywhere, why is this? One reason is that we think that no one has faced what we’re facing. So don’t listen to those who have gone before. But we know that what has been [...]