We've heaped a lot of criticism on the dominant model of the financial services industry in the past, a model which we call "The Intermediary Trap."We believe that the current system, which separates investors from their money managers and interposes an intermediary between the client and the manager, leads to performance which can be far worse than...
Tuesday, January 27, 2009
Schumpeter, Creative Destruction, and your Portfolio Recovery Plan
With "government stimulus" dominating most of the discussion in the pages and on the screens of the financial media right now, we would advise investors to focus their attention in an entirely different direction, towards an area of enormous importance that is all too often overlooked.Investors should carefully consider the critical importance of...
Wednesday, January 21, 2009
It's a panic, not a Great Depression
We have previously written in some detail about our assessment of the events leading up to the current economic situation.Our analysis is that the overall economy, outside of housing and the financial sector, was not in recession prior to September, and would probably have avoided a recession altogether had certain steps (such as the removal of...
Thursday, January 15, 2009
The consumption / production distinction with regard to stimulus plans
Today, the House Appropriations Committee announced details of the largest economic stimulus legislation ever proposed by the federal government.Many believe that in a financial crisis, the best way to get the economy moving is for the government to "prime the pump" by putting money in the hands of consumers. In his remarks from last Thursday, President-elect...
Monday, January 12, 2009
The Unstoppable Wave
The news today is full of speculation over the future of the economy. Will the recession run on "for years"? What kind of government stimulus should be applied? Are the proposed actions going to be too big, too small, too focused on this group or that group?While these are important questions, and worthy of analysis by investors, there is a much bigger...
Tuesday, January 06, 2009
The Investment Climate: January, 2009
We recently published "The Investment Climate: January, 2009" in the commentary section of our website.In it, we summarize the current situation and provide some perspective on where we stand today.For later posts dealing with this same topic, see also:"It's a panic, not a Great Depression" 01/21/2009."Managing Investments in the New Era" 02/18/2009."Great...
Monday, January 05, 2009
New Year's Resolution: swear off snake oil
One of the central themes of the investment philosophy that we espouse is that the average individual, given a reasonable amount of intelligence and discipline, can manage his own investments.This concept is contrary to what Wall Street has been selling for decades, which is that there is a magic to it, that you need to tap in to the Street, where...
