March 26, 2020
Markets have been relentlessly falling as the virus news worsens just like they said it would. The talking heads all pretend like they know how this plays out, but unfortunately when it comes to black swans the outcomes are unknowable. Our best guess is that great companies today, with iron clad balance sheets and strong brands, will be great companies when we come out of the other side of this. What might really get us out of this jam may be the 700 million babies that will be born, oh…in about 9 months from now. Now that is the way to stimulate the economy! Hang in there everyone and be safe.
February 18, 2020
According to BofA research, almost $24 billion of inflows went into bond funds for the seven day period ending 2-12-20. This represents the most net inflows since 2001 and has traders scratching their heads. Taken a step further, 30 year US government paper booked its lowest yield ever of 2.061%. There is now quiet talk of a huge bubble in the bond market as record assets flow into the lowest yields of our time. As for stocks, the bull keeps charging, even with a relatively small by comparison inflow into stock funds of just $8 billion in all of 2019. Imagine if that bond flow became stock flow? Grab your chair when the music stops.
January 22, 2020
In a classic case of too much government, last week marked the 100th anniversary of Prohibition. Now 100 years later, under the leadership of Governor Cuomo, New York State is by far the leader in providing government money to fund new craft breweries across the state, growing from 100 breweries in 2012 to more than 400 today. Yet on Thursday it was reported that American’s wine consumption dropped in 2019 for the first time in 25 years and that beer consumption fell 2.3% and cider dropped 3.8%. Everyone lines up to the trough when the money is easy, but we might suggest letting viable businesses run the economy, not the brilliant lawmakers who can’t see through the suds.
January 3, 2020
The Rolling Stones had the highest grossing concert tour in 2019. Joining them in the top ten money makers were Sir Paul McCartney and the boss Bruce Springsteen. The old rockers still rule. As for stocks, in 2019 Apple gained over 85% and Microsoft rallied over 55%. The old techers still rule. Even when investing, the more things change, the more they stay the same.
December 16, 2019
Jerome Powell and the Fed gave everyone a holiday gift as expected this week by keeping interest rates right where they were. After three defensive rate drops in 2019, and with unemployment low and earnings better than expected, it could be a green Christmas season for investors. Can the longest running bull market in history keep the conga line going in 2020?