This month's tumultuous trading has set records for volatility. The enormous swings in the market threaten to "desensitize" investors in the same way that numbing levels of graphic violence in film and video can desensitize viewers.Until recently, a three percent move in the stock market in one day (in either direction) would have been a significant...
Monday, October 27, 2008
Another important article from George Gilder
The latest Forbes magazine (cover date of November 10, 2008) contains an important article from George Gilder entitled "The Coming Creativity Boom."In it, the author highlights the critical role that creativity plays in a successful economy. Creativity is the heart of entrepreneurship, and entrepreneurship is at the heart of the economic success America...
Wednesday, October 22, 2008
"Great Depression" Update: iPhones selling like hotcakes
The news media is full of stories blaming the latest wild market swings on Wall Street acquiring "recession fears" and fretting about "weak earnings." The New York Times, for example, published a story entitled "Stocks Dive as Crisis Erodes Earnings" and cited weak earnings from Wachovia, Boeing and Merck as "major businesses across a range of industries."*Few...
Monday, October 20, 2008
Unleash the armies of accountants!
Over the weekend, the Wall Street Journal published an enlightening interview with economist Anna J. Schwartz, of the National Bureau of Economic Research.In it, Dr. Schwartz makes the important point that the current situation is not a liquidity crisis, as it is often described in the media."The Fed," she says, "has gone about as if the problem is...
Friday, October 17, 2008
He must've been reading our blog
Yesterday, we published a blog post entitled "The Business of America is Business," in which we reiterated the importance of focusing on the concept of the ownership of shares in a business, especially at a time when the gyrations of the stock market make it almost impossible to remember that the stock price and the business are two very different...
Thursday, October 16, 2008
The Business of America is Business
America's thirtieth president Calvin Coolidge (1872 - 1933) once famously stated that "the chief business of the American people is business." Coolidge did not waste words -- his nickname was "Silent Cal" -- and when informed of his death one wit (Dorothy Parker of Vanity Fair) unkindly asked "How can they tell?" So, people should give even more weight...
Monday, October 13, 2008
The Investment Climate: October, 2008
We recently published "The Investment Climate: October, 2008" in the commentaries section of the Taylor Frigon Capital Management website.In it, we sum up several of the streams of discussion we have published here over the past months and that have led up to this point.For later posts dealing with this same topic, see also:"It's a panic, not a Great...
Wednesday, October 08, 2008
Bear market anniversary reflections
The current bear market will officially be a year old as of October 09, 2008.As this chart demonstrates (click chart to enlarge for ease of reading), the Dow Jones Industrial Average reached its most recent peak on October 09, 2007 with a close at 14,164.53. Since that day, it has dropped 34.6%.During that time, most of the economy actually remained...
Monday, October 06, 2008
"A failure of government, not of private enterprise . . ."
In the fall of 1979, fifty years after the Great Crash of October 25, 1929, the Journal of Portfolio Management published a commemorative issue they had been working on since 1977 entitled "The Great Crash: Causes, Consequences, Relevance -- a fifty-year retrospective."It contained articles by economists such as Paul Samuelson (winner of the 1970...
Wednesday, October 01, 2008
Be centered, be still . . . revisited
Back on March 11 of this year, we wrote a post entitled "Be centered, be still" in which we cited research demonstrating that most investors make their most costly mistakes not only during downturns but after downturns. Often, mistakes after downturns come in the form of missing market recoveries, due to an earlier decision to bail out.The title of...
