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
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
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
I resisted downloading ChatGPT until last week because I’m increasingly skeptical about the benefits of technology. Don’t get me wrong; I love technology. I use my iPhone more than I care to admit and have to be mindful about not using it too much (and I still do). The problem isn’t technology – it’s people. It’s like food – we need it to live, and the right foods in the right amounts… Read More
Acropolis was an early adopter of exchange-traded funds (ETFs). As the name implies, an ETF is a fund that trades on an exchange. It’s like a mutual fund in that it is generally diversified, but like a stock, it trades throughout the day. When we got going in 2002, ETFs were about ten years old. The first version was State Streets Spyder, which still trades today with the ticker SPY…. Read More
After the market closed on Friday afternoon, I was sitting at my desk at the office, wondering what I was going to write about this week. I’m sort of tired of the banking crisis for the moment, even though it’s not over: Deutsche Bank was in the hot seat Friday. In any case, a terrific longtime client (and reader!) called to ask some questions about money market funds, and it… Read More
Even though the US banking system is still under strain, I said last week that the current circumstances were not like what happened in 2008, and I stand by that view today. The 2008 financial crisis started because banks, in the aggregate, made bad loans that couldn’t be paid back. We all remember the easy lending standards that went beyond subprime loans. Who can forget the NINJA loan? No Income,… Read More
On Monday, I wrote that I would do three days of Insights in response to the Silicon Valley Bank failure. First, I wrote about how we are protecting your cash in this environment. Next, I wrote about how the bank failure might impact the overall economy. Today, I’ll try to break down how Silicon Valley Bank (SBV) failed. I’m certain that more details will emerge in the coming days, weeks,… Read More
Yesterday, I wrote about how your cash is protected in the wake of Silicon Valley Bank’s (SVB) failure last week, and I promised to write about the potential impact on the overall economy today. Before I do that, I thought I would let you know that one of the two primary corporate bond funds that we use owned some SCV bonds that lost about half of their value since last… Read More
The Silicon Valley Bank (SVB) failure is a big deal. Big enough that I am going to tackle it over three days. Today, I’ll talk about your cash and how it is protected. Tomorrow, I’ll talk about what SVB’s failure could mean for the economy and why this failure differs from the 2008 financial crisis so far. And, on Wednesday, I’ll break down what happened at SVB that caused it… Read More
