October 31, 2023

The Mendoza Line

The Mendoza line is baseball jargon from the seventies for the supposed threshold for offensive futility of hitting at an average of .200.  Players can be above or below the Mendoza line (named for major leaguer Mario Mendoza, a lifetime .215 hitter).  There are several Mendoza lines on Wall Street currently…lines that when crossed get everyone’s attention.  For example, the Mendoza line for the ten year treasury appears to be 5%, above that and money flows from stocks to bonds.  Gasoline has a Mendoza line at $4 per gallon, above $4 and the economy begins to slow.  Bitcoin has seen somewhat of a Mendoza line at $26,000 and has made a recent significant rally to $34,000 plus.  For stock traders, the 200 day weekly average is at 3945, which is a line we do not want to see crossed.
August 30, 2023

Beware the Man Behind the Curtain

The finance industry has always made investing seem complicated and mysterious to many of us.  As a form of job security, the more dependent their clients are, the more “silver bullet” products and plans can be sold.  But like the Wizard, once the curtain is pulled back, investment success can be relatively simple…spend less than you make, have a financial plan with the guidance of someone that understands your goals, and invest in great companies and mutual funds.  The first step is to do the simple things that you can control and then ignore the man behind the curtain.
July 25, 2023

Rags to Riches

The world lost an iconic legend last week when Tony Bennett passed away at 96.  Tony Bennett captivated the nation, most notably a young Frank Sinatra, who famously claimed in a Life magazine article that “for my money, Tony Bennett is the best singer in the business.”  Speaking of money, Tony Bennett represented everything good about successful investing.  He was innovative, with an incredible knack for re-creating himself time and time again.  He thought long-term, achieving 19 Grammys, with 17 of them coming after he reached his 60’s.  He was frugal, as he and his manager son mapped his 200 appearances a year to perfection.  From Ray Charles to Lady Gaga, he was diverse and willing to take a little risk.  Cheers to a national treasure.
June 23, 2023

FOMO You Don’t

“We would be careful not to give in completely to FOMO (fear of missing out), as a skipped hike is not a pause, inflation still handcuffs the Fed…” Benjamin Bowler, BofA Securities.  The FOMO is definitely out there, what with Morgan Stanley upgrading Nvidia, this past Friday no less, to overweight.  Thanks for the update guys, the now trillion dollar chipmaker’s stock is up 193% year to date.  And FOMO is finally reaching out to the broader market, with all 11 S&P 500 industry sectors up during the month of June.  It may be ok to join the party now, who doesn’t like a good party, but again, they say nothing good happens after midnight…
May 31, 2023

Narrow Roads Take Me Home

“When you come to a fork in the road, take it.” Yogi Berra.  The stock market road typically has plenty of forks to take, but this year we have seen a road that gets narrower and narrower.  For example, If not for the seven largest tech stocks, the S&P 500 would be negative for the year and not up over 9%.  The AI inspired gold rush into tech has been pretty remarkable and continues with the recent push in Nvidia, now a Trillion dollar company.  Narrow stock market leadership has not always bode well for diversified portfolios and we need to battle the FOMO of the artificial intelligence crowd.  Sometimes it is good to stay in your own lane.