Back on March 4, we pointed out a troubling quotation by Fed Chairman Ben Bernanke, in which he indicated his opinion that slowing economic growth could lower inflation and moderate energy prices.In light of the market turbulence in the wake of this week's Fed decision, that post from March 4 is worth a second review. In it, we stated that a belief...
Wednesday, June 25, 2008
On any given day in the markets . . .
Richard C. Taylor had a saying that "On any given day, one percent of the owners of a stock set the price for all the other owners."He was advising owners of shares in good businesses not to become flustered by the market moves of their stocks in the short term, because those moves are driven, on any given day, by only a very small percentage of the...
Monday, June 23, 2008
A hawkish Fed or a dovish Fed? There can only be one. . .
Two weeks ago, on June 9, Fed Chairman Ben Bernanke indicated that the Fed would get tough on inflation, in a speech we discussed in this previous blog post, which also contains a link to the full speech by the Fed Chairman.Since then, doubts have arisen as to whether the Fed is serious about actually pulling the trigger, based on dovish statements...
Thursday, June 19, 2008
Managers who hate their own cooking
It should go without saying that the money manager you entrust with the task of managing your money should believe in the investment process he uses to manage your portfolio.In fact, we would go further and say that he should be convicted that the investment discipline he is following is the very best process that he could possibly use for the objectives,...
Monday, June 16, 2008
A critique of The Big Switch, by Nicholas Carr
Nicholas Carr's The Big Switch: Rewiring the World, from Edison to Google (Norton: New York, 2008) is a well-written and fascinating analysis of the enormous paradigm shift taking place in technology, one that he rightly observes will have enormous sociological ramifications beyond merely changing corporate data centers and the business models of...
Friday, June 13, 2008
Two important data points to be aware of from this week
One week ago, the non-farm payroll report sent the unemployment rate higher by 0.5% to 5.5%, sending the markets into a steep dive and reviving cries of recession from the demand-side pundits and economists who were having a hard time supporting such talk recently.Since then, two important positive pieces of information deserve note: one is the Fed's...
Wednesday, June 11, 2008
An economist looks at populism
Economist Brian Wesbury's comments in the editorial page of today's Wall Street Journal describe the current condition better than anything we have seen lately.His analysis reveals that we must be careful in our choices. While it is easy to follow a path towards dismay, the most important point he makes is a positive one: thanks to the dawning of...
Tuesday, June 10, 2008
Wall Street firms back at the well
This week, Wall Street brokerage firm Lehman Brothers* announced that they will be seeking an additional $6 billion in capital to shore up their balance sheet.This is in addition to the $4 billion they raised just over two months ago. Just prior to that March capital raise, the firm's CFO had stated that the $1.9 billion they raised in February of...
Wednesday, June 04, 2008
A hard look at the current price of oil and gasoline
Everyone's talking about the price of oil, and why not? With gasoline prices above $4 per gallon in many parts of the country (this photograph was taken this week at a gas station in the San Francisco Bay Area), the cost of driving has increased tremendously in a few months.With crude oil futures contracts currently above $135 a barrel, many consumers...
Monday, June 02, 2008
The zero-sum connection
In our most recent post, we outlined some significant developments investors should be aware of, developments that will likely initiate a paradigm shift not just in technology-related industries but also in many other areas of life.As professional portfolio managers, we would be foolish to publicly share such specific ideas on a blog -- or even outline...
