Home 2018-05-14T12:08:11+00:00

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 Only Game in Town?

By | May 23rd, 2018|

Should we invest in monopolies? Photo: Matthew Hull. Source: Morguefile A monopoly exists when a company is the only provider of what we need. The electric company in your area is the only way to get electricity for your home. The cable or phone company is the only way to get high-speed internet service. Companies that enjoy a huge market share have one less thing [...]

Revolution and Flood

By | May 22nd, 2018|

Where did we come from? “Washington Crossing the Delaware” by Emanuel Leutze. Source: Metropolitan Museum of Art Every society has stories of its founding. In school, we learned about the American Revolution, how a rag-tag band of settlers were able to hold the field against the strongest army in the world. This story has given Americans a sense of identity and direction. My own family [...]

Go with the Flow

By | May 21st, 2018|

What is “free cash flow”? Photo: Redmark. Source: Wikipedia Free cash flow is an accounting term that measures how much cash a company can generate from its business after taking out capital expenditures – money spent for new computers or new buildings or new delivery vehicles. It’s the cash that’s left over after you spend what you need to keep the business going and growing. [...]

Hostage-Taking Bond Markets

By | May 18th, 2018|

Is the bond market holding Italy hostage? “Hostages” by Laurens. Public Domain. Source: Wikimedia Over the past few days the Italian bond market has sold off. Market participants have been spooked by the prospect of a political alliance between the two major populist parties there – the Northern League and the Five Star Movement. The leaders of the parties have been in talks for months, [...]

The Player’s Dilemma

By | May 17th, 2018|

What is “Pay to Play”? Photo: Dodger Harrison. Source: Morguefile “Pay to Play” is a pernicious system where nonprofits use their business needs to generate donations. Periodically, a nonprofit will ask vendors to submit business proposals – say, for snowplowing services, or investment management. When the proposals are evaluated, the nonprofit also examines the record of charitable contributions they may have received. Unless a business [...]

Lessons from Global Conflicts

By | May 16th, 2018|

What is the “Thucydides Trap”? Map of Ancient Greece. Source: Wikipedia Thucydides was an ancient Athenian general who wrote about the Peloponnesian War between Sparta and Athens. Sparta had been the dominant power in Greece. They had a harsh military culture built around their seemingly invincible army. Athens was a rising power, commercially and at sea. They had built the most powerful navy in the [...]

Real Returns, Real Differences

By | May 15th, 2018|

Why have US stocks done so well? NY City by Night. Photo: Paul Barcellos, Jr. Source: Wikimedia Since 1900, US stocks have grown 6.4% per year, on average, after inflation. 2% of that has been capital gain, and over 4% has been dividends and reinvested dividends. A dollar invested in 1900 would have grown to be more than $1,400 today. By comparison, a dollar invested [...]

Bicycles for our Brains

By | May 14th, 2018|

What good is technology? Photo F. Muhammad. Source: Pixabay A couple of decades ago, Scientific American published a study, where the researcher measured how much energy it took various types of animals to travel. In the results, the California Condor was the most efficient, soaring on wind currents and thermals. People were more efficient that dogs or rabbits or bees, but not as efficient as [...]

Foolish Wisdom

By | May 11th, 2018|

Would you rather be the Leader or the Leader’s fool? “The Court Jester” by William Merritt Chase. Source: Wikimedia There’s a tragic cycle in human affairs. A leader solves a problem and is cheered for wisdom or decisiveness or practical understanding. They’re given authority, perhaps political leadership. The adulation becomes intoxicating. They don’t want to hear bad news – no one does – and they [...]