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Getting Critical

By | 2017-08-08T07:35:08+00:00 August 8th, 2017|Global Market Update|

What is a critical mass? Photo: US Department of Energy. Source: Wikipedia A critical mass is the amount of fissile material needed to sustain a nuclear chain reaction. The amount depends on the nuclear properties, its density and shape, the surroundings, even the temperature. Enough atoms are splitting and spitting off energy and neutrons to make more atoms split and generate more neutrons and more energy. The chain reaction continues until all the fuel is consumed. In society, a critical mass is the number [...]

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Exchange Traded Funky

By | 2017-07-28T07:08:54+00:00 July 28th, 2017|Global Market Update|

Is there an ETF for everything? Photo: Jack Moreh Source: Free Range Stock Photo It sure seems like it. ETFs used to be primarily an efficient way to invest in a broad market index, like the S&P 500 or an aggregate bond index. Then they branched off into market sectors: small cap stocks, tech companies, country funds like the UK or China. All this seemed like a reasonable way to diversify a portfolio. And it’s so convenient: instead of trying to pick winning stocks, [...]

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PC David and Goliath

By | 2017-07-17T16:47:00+00:00 July 7th, 2017|Global Market Update|

Remember Compaq? Photo: Tiziano Garuti. Source: Wikipedia The PC maker was founded in 1982. It went from start-up to $1 billion in sales in only five years. It tripled that number in four more years, becoming the third-largest PC-maker – a leading producer of a revolutionary product. Compaq made a “luggable” computer – a PC that weighed 25 pounds or so. You could “lug” it from place to place, unlike desktops, which needed a lot more time to set up. It was one of [...]

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William Baumol, RIP

By | 2017-07-17T12:21:19+00:00 May 11th, 2017|Global Market Update|

Who was William Baumol? Source: Journal of Economic Perspectives, American Economics Association William Baumol was an economist who taught for years at Princeton. He died last week at the age of 95. He had a long and productive career, writing papers and books over the course of seven decades. He is perhaps best known for his theorem on wages, Baumol’s Cost Disease, which explains why cars and computers get cheaper while haircuts and college tuition get more expensive. Essentially, areas of the economy with [...]

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Market Dominance and the Winner’s Curse

By | 2017-07-17T12:21:20+00:00 April 28th, 2017|Global Market Update|

Do we live in a winner-take-all economy? Source: Latticeworks Increasingly, commerce seems dominated by a few big firms. We use our iPhones to search for stuff on Google; we buy it on Amazon; and we tell our friends about it on Facebook. These tech titans provide everything we need, and they’re incredible profitable. Normally, high profits would attract competitors, forcing down margins. Consumers would benefit, as companies vie for their business, either through lower prices, better service, or some other innovation. But that doesn’t [...]

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Robotic Taxes?

By | 2017-07-17T12:21:28+00:00 March 6th, 2017|Global Market Update|

Should we institute a tax on robots? Photo: Xavier Caré. Source: Wikimedia Commons That’s what Bill Gates thinks. When people fear what new technology is going to do to them, they’ll avoid it rather than try to shape it. If there’s a robot tax, that might allow countries to provide pensions and training so people can adjust to their new economies. If the robots are eating our jobs, then we need to find new jobs – like blacksmiths learning how to build and repair [...]

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The Prize Economy

By | 2017-07-17T12:21:34+00:00 December 14th, 2016|Global Market Update|

There’s a prize for that. Photo: Douglas Tengdin Increasingly, organizations are using prizes to encourage innovation. Know of a way to improve smartphone voice recognition? There’s a $10,000 price for that. Design a delivery drone? $50,000. Got a solution for how to repurpose carbon emissions to reduce the potential for global warming? That’s worth over $50 million. If you can think of a persistent, society-wide problem, there’s probably a prize associated with it. McKinsey & Co. estimates that there are over 30,000 significant prizes [...]

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Sustainably Stronger

By | 2017-07-17T12:21:36+00:00 December 5th, 2016|Global Market Update|

What makes some businesses stronger than others? Photo source: Morguefile Business analysts look for “moats”—competitive advantages that one company has over another, even when they’re in the same industry. Like the way brand-loyalty supports iconic consumer companies like Coke or Colgate. But those kinds of moats are rare. Usually, a smart product or business idea gets copied and commoditized. Those won’t give you a sustainable advantage. But there are some things that the competition isn’t always willing to do. Strategies or habits that—once adopted—make [...]

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Our Fibers, Our Selves

By | 2017-07-17T12:21:41+00:00 October 3rd, 2016|Uncategorized|

What do our clothes say about us? Illustration from “The Penny Magazine,” 1843, Source: Wikimedia For millenia, clothes have inspired new technology. Cotton has been spun, woven, and dyed since prehistoric times. Marco Polo pioneered the Silk Road and the Age of Exploration. Spinning mills in England and New England were at the center of the Industrial Revolution. Demand for “Basic Black” fashions stimulated the chemical industry in the 20th century. Everyone’s excited by the latest smart watch or FitBit, but clothes are the [...]

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The Myth of New

By | 2017-07-17T12:21:55+00:00 June 23rd, 2016|Global Market Update|

The Myth of “New” We’ve never seen this before! Meerkat. Source: Animal Photos That’s what people say when they run into a novel situation. Whether it’s Brexit or Venezuela’s economic meltdown or Puerto Rico’s default, people want to marvel at their situation’s unique status. But there’s nothing really new under the sun. The writer Malcom Muggeridge once observed that there’s no new news, just old news happening to new people. Take the immigration crisis in Europe. While millions of people coming into Europe from [...]

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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.

Copyright 2017 | All Rights Reserved
Nothing contained in this communication should be construed as investment advice.