Tensions with North Korea have been escalating in recent months. The regime has tested missiles and claims to be capable of building nuclear warheads, and thus there is rising concern about an American military response.
Because of the secular headwinds facing global economies, currently labeled as the “New Normal” or “Secular Stagnation”, investors have resorted to “making money with money” as opposed to old-fashioned capitalism when money and profits were made with capital investment in the real economy.
At last month’s NATO meetings, President Trump called the Germans “bad” for running trade surpluses with the US, causing a minor international incident. Although such incidents come and go, it did generate a more serious question…are German policies causing problems for the world? In this report, we review the saving identity we introduced in last month’s series on trade and discuss how Germany has built a policy designed to create saving. We discuss the Eurozone and the impact that German policy has had on the single currency. Lastly, we address the question posed in the title of this report.
We thought it would be very helpful to review Warren Buffett’s argument in 19991, the last time there was very high expectations attached to technology stocks and to the overall level of common stock prices. We will reference Buffett’s quotes by the year he said them. The sections labeled 2017 offer our current observations on the markets and thoughts from respected experts.
This is the final report of our four-part series on trade. This week, our discussion on trade continues with a look at the relationship between trade, employment and inflation. We also conclude the series with market ramifications.
In this multi-part report, we offer reflections on trade to provide insight into how to use macroeconomics to judge the veracity of certain claims.
In this multi-part report, we offer reflections on trade to provide insight into how to use macroeconomics to judge the veracity of certain claims. In Part I, we laid out the basic macroeconomics of trade. In Part II, we discuss the impact of exchange rates and examine the two models of economic development, the Japan Model and American Model.
Each year we like to drill down on the wisdom imparted by Warren Buffett and Charlie Munger at the Berkshire Hathaway Annual Meeting. This year, we thought there were four key takeaways we can consider in running our portfolio of common stocks at Smead Capital Management.
The general consensus among economists is that free trade makes the economy more efficient and supports global stability, but the steady erosion of US manufacturing jobs and the shrinking middle class have called this view into question.
As many of you know, we admire Warren Buffett and his “sidekick,” Charlie Munger. They seek out quality businesses at bargain prices and have a stunning record of success. Both personally and with stock ownership, they are notorious tightwads with their own money and the money of our common stock holding, Berkshire Hathaway (BRK.B).