I write an overview of the economy about once a month and for the longest time the entire thing could have been summed up in a single sentence: nothing has changed since the last time I wrote about the economy. Of course, over a month we shouldn't expect much change but even over longer periods, the economy is remarkably consistent. [...]
Faced with a choice between changing one's mind and proving there is no need to do so, almost everyone gets busy with the proof. J.K. Galbraith I've learned so much from my mistakes, I'm thinking of making a few more. Anonymous I was prepared to dislike our new Fed Chairman, Kevin Warsh. His past track record at the Fed stood [...]
You can't take the same actions as everyone else and expect to outperform. In order to outperform, by definition, you have to depart from the crowd. You have to hold a different position. If your portfolio looks like everyone else's, you may do well, or you may do poorly, but you can't do different. And being different is absolutely essential [...]
Economic Stability One of the remarkable things about the US economy is how stable it has been over the last 4 years. I know it doesn't feel that way sometimes - most of the time? - but from an aggregate viewpoint, that is the reality. We can see this stability in a variety of economic reports as well as in [...]
In Congress, July 4, 1776 The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of [...]
All About The AI? It's an AI stock world and all the other stocks are just living in it, right? That is the persistent narrative we've been hearing for at least a couple of years and while the story is starting to see some cracks, it is still widely believed. There is still an underlying whiff of FOMO surrounding the [...]
Can Tech Stocks Keep Outperforming? Technology stocks have been outperforming for a long time. That's how technology gets to be nearly 40% of the S&P 500 and the Russell 1000 and 60% of the NASDAQ 100. The concentration of the indexes in technology stocks is a function of how well they've performed and the performance has solid, fundamental roots. They [...]
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. [...]
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. [...]
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