Where's the global economic meltdown? We're 3 months into a war with Iran, the Strait of Hormuz closed. 20% of global LNG is shutdown for the next 3 years, 20% of global crude oil production is being affected, 30% of global fertilizer supply is shut off, and roughly a third of global helium supply is bottled up in the gulf. [...]
Nicholas Mutton / A fork in the road The future is already here – it's just not evenly distributed. - William Gibson, author of Neuromancer Those who cannot remember the past are condemned to repeat it. - George Santayana, The Life of Reason We are in the midst of an unprecedented boom. A technological revolution that [...]
Because the goal of investing is to accumulate real wealth—an enhanced ability to pay for goods and services—the ultimate focus of the long-term investor must be on real, not nominal, returns. - John Bogle, Common Sense on Mutual Funds There is a robust debate these days about whether today's high stock market valuations are justified. On one side are more [...]
“You pay a very high price in the stock market for a cheery consensus.” — Warren Buffett The inflation figures released last week were not particularly good. Consumer prices rose 0.6% in April and the year-over-year change is now 3.8%. The core numbers were better at 0.4% for the month and 2.8% year-over-year, but those were still higher than expected. [...]
Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject [...]
So we’ve never had people in a more gambling mood than now. But that doesn’t mean that investing is terrible. It does mean that prices for an awful lot of things will look very silly. Warren Buffett, CNBC interview, 5/2/26 If you've been reading these weekly missives for any length of time, you know I've been ranting about gambling for [...]
Trump, The Sequel: The First 15 Months The first 15 months of President Trump's second term has seen a whirlwind of policy changes, many of which have been notable for their extreme nature. President Trump's style, his modus operandi, is capricious and so are his policies - unpredictable, impulsive, and often a result of anger at some perceived slight. To [...]
Stock markets the world over celebrated the end of the Iran War last week with many closing the week at all-time highs: Large cap (S&P 500, Russell 1000), Small cap (Russell 2000, S&P 600), NASDAQ, Emerging Markets, Asia ex-Japan, Latin America 40, Canada, Australia, Israel, Poland, Italy, Netherlands, Austria, Spain, Singapore, Taiwan, and Brazil all closed at all-time highs (based [...]
Stocks were up nearly 4% last week due to a ceasefire between the US and Iran that was supposed to open the Strait of Hormuz and allow oil to start flowing again. Crude oil fell 14% while the GSCI commodity index fell almost 7%. The dollar, which really hadn't rallied much during the conflict, fell 1.3%. All of this despite [...]
The Post-COVID Volatility When one thinks back on all that has happened since 2020, it is, I think, amazing how little the US economy has changed over that time. Obviously, the economy was volatile during the shutdown of the economy during COVID and during the period when the economy was re-opening. Real GDP fell over 7% in the second quarter [...]
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