Investors from Mars and Venus

By | 2017-07-17T12:21:18+00:00 June 7th, 2017|Global Market Update|

Can we ever understand one another? Photo: Amshudhagar. Source: Wikipedia In 1959 English novelist C.P. Snow gave a lecture on “The Two Cultures,” bemoaning the lack of understanding between literary intellectuals and scientists, between science and the humanities. At the time, folks were worried that scientists had never read Shakespeare or Dickens, and that the Atomic Age would usher in a technocratic tyranny, along the lines of Huxley’s “Brave New World.” But to these humanities scholars Snow asked, “Can you describe the Second Law [...]

Running With The Herd

By | 2017-07-17T12:21:30+00:00 January 25th, 2017|Global Market Update|

Are investors just herd animals? Source: South Dakota Department of Tourism Investors have to wrestle with lots of issues—economics, financial reporting, asset structure, valuation—but perhaps the most difficult factor they face is their own nature. People are naturally social creatures, something Aristotle noted 2500 years ago. We like to do what other people are doing. Going against the crowd can feel like standing up against a herd of charging buffalo. But strategists have long seen the advantages of going against popular opinion. “Never follow [...]

Not Free Parking

By | 2017-07-17T12:22:25+00:00 October 8th, 2015|Global Market Update|

How much should parking cost? Source: Wikia A recent story in the New York Times describes a 10-unit luxury condo building in New York’s Soho district. Parking is so scarce that the developer is asking $1 million for a single parking spot. The living units upstairs will cost between $8 and $13 million, so the buyers can probably afford the additional expense. But $1 million seems outrageous. At that price, the parking spot costs over twice what the living space goes for, on a [...]

Prices and Memory

By | 2014-01-21T11:14:57+00:00 January 21st, 2014|Global Market Update|

Do prices matter? That’s the question investors have to ask all the time. Is gold a good investment? Depends on the price: if you bought it at $1000, you’re still happy with the metal trading at $1250. If you paid $1800, you’re just waiting for it to go back up so you can get “your” money back. But an investment doesn’t know that you own it, and the universe doesn’t owe you a living. If a stock goes down after you buy it and [...]

What About the BRICs?

By | 2014-01-03T10:41:40+00:00 January 3rd, 2014|Global Market Update|

Whatever happened to emerging markets? Amid the shining stars of investments in 2013, emerging markets stand out. Not as bright points, but as black holes. China was flat. Russia was down 10%. Brazil was down 25%. An emerging market composite declined 6%. After a decade of being the investing world’s darlings, these markets are struggling. The catalyst appeared to be the “taper talk” last May. Of course, that discussion was no real surprise. We’ve known that ultra-low interest rates couldn’t last forever, and that [...]

Lehman Lessons (Part 4)

By | 2013-09-16T10:35:06+00:00 September 16th, 2013|Global Market Update|

After five years, what have investors learned from Lehman? Lehman's bankruptcy and the pricking of the housing bubble created chaos, disruption, and market opportunities on a scale that hasn't been seen in the markets for decades. Indeed, not since 1974, with double-digit inflation at home and foreign policy failures abroad had the market been so cheap. The bear market of the '70s offered its own lessons to investors--inflation matters, price matters, government policies can change--which were incorporated into the bull market of the '80s. [...]