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 [...]
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