17
Jul
2023
You Better Think (think!) About Estate Planning
The Queen of Soul, Aretha Franklin, died in August 2018. Five years later, the battle over her estate ended after a two-day lawsuit that should allow her estate to finally settle. At issue was that Franklin left two wills behind, both handwritten (one tucked in a notebook under a couch cushion), and they were contradictory. Initially, her four surviving adult children thought there was no will since they couldn’t find… Read More
10
Jul
2023
Lessons from the Land of the Rising Sun
When I was in high school, Japan Inc. seemed invincible. Their economy was booming, which pushed up their real estate and stock markets, and a handful of over-the-top events like the purchase of Rockefeller Plaza by Japanese investors and the sale of Van Gogh’s Portrait of Doctor Cachet sold for $82.5 million (or $189.5 million in today’s dollars). From 1970-1989, the Japanese stock market, according to MSCI, gained 16.9 percent… Read More
26
Jun
2023
Decoding How the Mighty Greenback Shapes Your Investments
Last week, I was asked to consider writing an article about how the dollar’s strength or weakness impacts a portfolio. I’ve covered it a bit over the years, but I thought now would be a good time for an update, and I’m always interested in writing about what readers want to read about, so I try to address specific issues whenever possible. I will illustrate later how the dollar has… Read More
20
Jun
2023
The McNealy Problem
James Grant is one of my favorite market gadflies. He is the editor of the eponymous James Grant’s Interest Rate Observer, a columnist for Barron’s, and host of the Grant’s Current Yield podcast. Grant is intelligent, funny, and a long-term market skeptic. I’ve heard him say he doesn’t like being described as a perma-bear, but he’s been bearish for as long as I can remember and seems a true gold bug. So,… Read More
12
Jun
2023
The Bond Market is of Mixed Minds about a Recession
One of the things that I hear all the time these days is that the bond market and the stock market aren’t in agreement about whether a recession is coming. Usually, I hear this from someone who thinks that the bond market is right and that the stock market will correct sharply when the recession comes. And in fact, bond investors are giving strong signals of a recession from the… Read More
5
Jun
2023
The Market Has Bad Breadth
The S&P 500 is up 12.4 percent year-to-date as of Friday, which is excellent news. Less excellent, however, is that just a few stocks are powering the entire return. The half-dozen largest stocks in the index are worth about 25 percent of the index, and they are up 67.9 percent on average. They are all up by over one-third, and two have more than doubled. My back-of-the-envelope calculates that the… Read More
22
May
2023
Debt Ceiling Crisis in Perspective
Chris and Cliff forwarded me an article last week asking: what would you do with your portfolio if you knew what was coming? The article referenced the still unresolved debt-ceiling situation and proceeded to list many pretty lousy events over the past 30 or so years. It made me think of a chart we made when we started Acropolis with small images depicting awful news with the growth of a… Read More
15
May
2023
America & the PIIGS
A little more than ten years ago, Greece almost left the European Union (EU) because the longstanding structural weaknesses of the Greek economy were hit hard by the 2008 global financial crisis. The crisis was called Grexit, which should sound familiar since it was adapted a few years later for the Brit’s departure from the EU. Greece wasn’t alone, though. Several EU countries were in trouble: Portugal, Italy, Ireland, and… Read More
8
May
2023
Stock Buybacks: Finding Common Ground Amid Controversy
Companies’ capital decisions aren’t usually very controversial, like paying down debt, paying another quarterly dividend, or upgrading the facilities. Stock buybacks, however, are another story: they generate a lot of controversy. Before getting into the debate, let me take a minute to describe a buyback. When companies have extra capital, they sometimes go into the open market and buy back their own stock, hence the name (although they are sometimes… Read More
1
May
2023
How to Avoid Disaster
September will mark the 25th anniversary of the failure of the massive hedge fund, Long-Term Capital Management (LTCM), and my podcast feed is filling up with retrospectives. One podcast featured Roger Lowenstein, the author of When Genius Failed, which is considered the definitive work on the subject. I read it when it came out in 2000 and once again in subsequent years, and it’s a great book that I thoroughly enjoyed…. Read More