Buy and Hold Investing: The Why and The How
June 5, 2023 Great Companies and the Power of Doing Nothing! Over 30 years ago, I entered the investment business after a two-year stint in graduate school. During these formative years, I developed a list of companies I thought were great growth opportunities based on their business models, brands, and competitive advantages. What follows is…
Risk and Return: Is the Juice Worth the Squeeze?
May 22, 2023 Below is a series of plots for the S&P 500 Index relating risk and return over three year “look back” periods beginning in 1990. Each dot represents the relationship between risk (the x axis) and return (the y axis) over a three-year period. As we roll through time, we add…
The Inflation Threat is Receding
May 15, 2023 We had two important inflation releases last week for inflation data through April. Looking at inflation expressed as a percentage change from a year ago, we can see inflation readings receding. The red line depicts the Consumer Price Index, and the blue line shows the Producer Price Index (commodities).…
Inflation Readings This Week
May 8, 2023 The stock market has been range-bound for the better part of two years. Here’s a picture below of the index going back three years. The S&P 500 Index today is trading at a level achieved about two years ago on its way to its all-time high. But, since reaching that high,…
Another Bank Seizure While Markets Yawn
May 1, 2023 First Republic Bank was seized by the Fed and taken over by JP Morgan this past weekend. JP Morgan CEO Jamie Dimon made a statement stating, “this part of the cycle is behind us.” While Dimon’s remarks were meant to sooth, and the market is up today, it is hard…
A Big Week for Corporate Earnings
April 24, 2023 This week, approximately 2,500 publicly traded companies will report Q1 earnings, and some will provide forward guidance. Given the heightened concerns about the potential for an economic recession, this is a pivotal time for earnings because this quarter, more than any other in recent memory, will indicate the likely depth…
ChatGPT: The Future is Upon Us NOW!
April 17, 2023 Author’s note: everything below that appears in italics in this research note was generated by ChatGPT. This entire exercise was completed in about one minute! It seems fair to say this part of my job (writing commentary) could be replaced by ChatGPT. ChatGPT, as a large language model based on the…
Positive Indicators for Prospective Inflation
April 10, 2023 Inflation has been with us for over two years and a central focus of the Fed since March of 2022. We have held the view that inflation is mostly a monetary phenomenon, meaning that excess money supply has been the primary cause of inflation. Thus, we’ve seen the Fed’s…
Mixed Messages: A Review of the First Quarter 2023
April 3, 2023 There were many eye-grabbing headlines related to the economy and capital markets in the first quarter. We continue to face uncertainty in the inflation outlook. The Fed’s rhetoric continues to be hawkish as it views inflationary pressures as the most significant threat to the economy and prosperity currently. Thus, during…
Did We Just Have a Banking Crisis?
A mere three weeks ago we were confronting a run on Silicon Valley Bank followed by a bank bailout orchestrated by the FDIC, the US Treasury, and the Fed. The official response was swift and robust. The Fed opened the discount window, member banks took advantage of the liquidity, banks across the country took…
The Shape of Things to Come
March 20th, 2023 What is a Treasury yield curve and why does it matter? There’s been a lot of attention from economic pundits and the financial press on the so-called “yield curve inversion” as an indicator of impending recession. Many people don’t know what the yield curve is and why inversion matters. The picture is…
A New Bull Market?
June 12, 2023 There have been several high-profile pronouncements that the stock market has begun a new bull market. Our view is that while this may be true, it is yet too soon to draw that conclusion with high conviction. First let’s look at the chart below. There are some positives, no doubt. But…