Remembering Lehman Brothers: What Have We Learned?
Five years ago, at the five-year anniversary weekend remembering the collapse of Lehman Brothers, I wasn’t ready to deal with the bad memories of that terrible time. Granted, what happened 10-years ago in financial markets was not like being in a war, a natural disaster, sick with a terrible disease or the victim of a terrible crime, but it was still upsetting to me (no doubt because I live in… Read More
How Much Will Retirement Cost? The WSJ May be Wrong
One of my favorite writers and thinkers is a behavioral economist named Dan Ariely. I heard him speak at a conference years ago, read his first book Predictably Irrational and am about half way through his most recent book, Dollars and Sense. It may be a little hard to tell from the photo, but if you look closely, you can see that his face is disfigured from a third-degree burn… Read More
Just How Rich Are You?
According to a Gallup poll last year, almost two-thirds of Americans identify themselves as middle class. Despite identifying as such, most Americans can’t define ‘middle class,’ which isn’t too surprising because the definition varies so broadly. I found a nice calculator on The Washington Post’s website that allows you to type in your income and your location to find out where you stand. Before going any further, I should note that I… Read More
Performance Like You’ve Never Seen
When I graduated from college and started working for Mark Twain Bank’s brokerage unit, there was an older gentleman who occupied one of the offices in the branch. I’m not sure he was actually employed by the bank at that point, but I was told that he had been an important executive at one time. He came in around nine, read the newspaper (we all did in those days), made… Read More
Turkey: Contained or Contagion?
Market risks often come from the most unexpected places. Last week, a possible economic meltdown in Turkey rattled global markets. I wouldn’t have guessed that as recently as a week ago, and while I still think that Turkey won’t affect US markets too much more than they did Friday, I also wouldn’t have thought that problems in Greece would have created an existential crisis for the euro. I am not… Read More
More Tax Cuts to Come?
There’s apparently plan floating around Washington that would dramatically change capital gains taxes, in my opinion, for the better. I try to be impartial about political matters (not always successfully, according to some readers), so for now, I want to leave aside the debates about whether the plan only benefits the rich, inappropriately adds to the deficit or whether it should be an act of Congress or a rule change… Read More
Trade Wars and Interest Rates
Every day brings another headline (or Presidential tweet) about escalating trade tensions between the US and the rest of the world. What impact could these tariffs have on the bond market? The most popular narrative is that prices may increase due to tariffs being passed through to US consumers. Higher inflation should lead to higher long-term rates and the potential of a more hawkish Fed. This “cost-push” view of inflation… Read More
Whither Value? Ask Warren Buffett
I feel as though I’ve written this article a few too many times: value investing is struggling. Pioneered by Warren Buffett’s mentor Benjamin Graham, value investing is the method of buying stocks inexpensively, with the hope that the current problems that’s causing the cheapness pass, and the stock will rebound sharply. Decades into Buffett’s illustrious career, finance academics found that the process of buying cheap stocks led to higher than… Read More
What’s Your China Exposure Amid the Trade Skirmish?
One of the interesting things about the current trade skirmish (I’m not willing to call it a war yet), is that we are fighting on multiple fronts. Even though we have tariffs on aluminum and steel from Canada, Mexico, and the European Union, we all know that the primary combatant in this altercation is China. Even more interesting, perhaps, is that we have more exposure to China than ever before,… Read More
Bond Yields: Still Crazy After All These Years
To my surprise, it’s been more than three years since I wrote about negative yields on bonds throughout the world. In my article, which can be found here, I wrote that bond yields could go a lot lower than I ever thought since I thought that they were ‘zero-bound.’ A year later, I returned to the topic when the yield on 50-year Swiss bonds had a negative yield. The article… Read More