The essence of market economies is that millions of individuals making profit-oriented decisions, for the benefit of themselves, their families and communities, will allocate resources significantly more efficiently than government bureaucrats making the same decisions on behalf of millions of individuals. One of the key reasons is everyone’s circumstances are different and can therefore make […] Read more
Free money … what’s not to love?
Investing for Fun and Profit: Leading to my 2021 market predictions
Titanium-Strength Portfolio continues to live up to its name
It could also be called the do-nothing portfolio
It has been a little over a month since the turn of the calendar, but I am writing this the day after the Washington siege as my first column of the new year. What other zaniness might occur between day of writing and day of reading remains to be seen, but a constant has been […] Read more
“He who lives by the crystal ball will eat shattered glass”
Neither seer skill nor mathematical acuity are very important for market success
The quip in my column title was authored by Ray Dalio, a highly successful hedge fund manager, founder of Bridgewater Associates and successful author. I am writing near the end of a tumultuous year for a publication date early in what will hopefully become a year when life and the markets return to some level […] Read more
Why is simple so difficult?
Following a consistent approach helps to simplify
In my former corporate life, I frequently lamented needless complexity with the refrain, “They have a never-ending ability to turn simple stuff into rocket science.” At one point, a CEO made the infamous statement that “complexity is our friend,” releasing a torrent of complexity from minions aiming to please. It is my belief that complexity […] Read more
The difference between an investment and a speculation
Speculations are often described as investments because that word has a more positive connotation
Differentiating between investments and speculations is more nuanced than distinguishing investments from expenses. Speculations are often inappropriately referred to as investments with the main similarity being both are purchased with the intent of profiting. The allure of speculations is their potential for quick and dramatic profit, but quick and dramatic losses are more probable. Let’s […] Read more
Why investment is one of the most overused words
To be a true investment, the purchase must meet three criteria
Our city cousins almost unanimously believe a house is likely to be the biggest investment they will ever make. We have all heard this and many believe it to be true. Then, after purchasing a house, they often invest in renovations to increase its value, and, of course, they must invest in furniture to make […] Read more
The Presidential Cycle and other regularly promoted phenomena
Can they help time your investments?
The publication date of this article is election day in the United States. By the time you read this we may know the outcome of another bizarre election. Much will be written about how the outcome will impact our investments, yet in reality it will have surprisingly little impact, and not in any predictable way. […] Read more
Growth stocks have outperformed value by a wide margin … but will it last?
Slow and steady wins the race
Market action this year has confounded and perplexed. Meaning, it has been pretty much business as usual, although with more exaggerated swings. The action should demonstrate more than ever that short-term market gyrations are completely unpredictable. Anyone who in late March publicly said the market would hit new records by summertime would have been promptly […] Read more
Value versus growth company valuations
Being viewed as a growth versus a value stock is one reason why stock prices can be significantly more volatile than underlying earnings or cash flow
Companies are broadly divided into two categories: value stocks and growth stocks. Value stocks generally pay higher dividends, have slower growth rates and sell for lower valuations based on traditional metrics like earnings yield (the inverse of the more popular but less easily understood price/earnings ratio), cash flow yield and price-to-book ratios. Growth stocks exhibit […] Read more
Titanium-strength portfolio lives up to its name
Record-setting market turbulence tests portfolio’s mettle
As I write, it is almost the second anniversary of the titanium-strength portfolio. I am updating as of May 4, 2020, due to publication timelines. With the topsy-turvy nature of markets lately, the details may have changed by publication date, but the key message will remain the same. The normally volatile markets have been unusually […] Read more
Cyber-Savvy Farmer
