For years I have been warning that during the age of permanent stimulus (which began in earnest with the Federal Reserve’s reaction to the dotcom crash of 2000), each successive economic contraction would have to be met with ever larger, increasingly ineffective, doses of monetary and fiscal stimulus to keep the economy from spiraling into depression.
Neil Howe foresaw a global crisis that would upend society. He didn’t know it would be a pandemic, but, throughout his career, he has been predicting a “fourth turning” – an event that would reshape societal norms and usher in a new generation of leaders.
We are big fans of Buffett’s theories about businesses with low capital requirements and the ability to throw off cash to owners. Unfortunately, he recently emphasized indexing and didn’t shy folks away from today’s glamour tech stocks which require more and more capital
A compassionate society has both economic reason and ethical responsibility to provide a social safety net to its most vulnerable members. It is an act of both economic insanity and ethical corruption to provide a financial safety net to its most reckless speculators.
The economic effects from COVID-19 will be devastating. Stock and asset prices will fall dramatically and will take years to recover. U.S. Treasury yields will turn negative. Sell “risk-on” assets, increase cash, and buy Treasury bonds.
This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham. I interviewed six members of Tweedy, Browne’s investment committee.
The bitcoin halving that occurred this past Monday is only the third such event in the cryptocurrency’s 11-year history. In the months following the first and second halvings, bitcoin prices surged as it became abundantly clear that at some point in the near future, new bitcoin issuances will come to a halt.
Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.
In terms of the long-term effect on economic outcomes, the disease is likely to be anything but an equalizer.
COVID-19 makes 2020 a good year for clients to consider a Roth conversion, says leading financial advisor Elizabeth “Lizzie” Evans.
The economic calendar is a normal one and is beginning to include data from after the start of the crisis. This week includes small business and consumer sentiment surveys, as well as April data for retail sales and industrial production. I will also be watching jobless claims, both new and continuing.
The recent market volatility has caused stress, fear and even panic. But that emotional toil can be alleviated by constructing what we call “dedicated portfolios,” rather than blindly following the precepts of modern portfolio theory.
For more than a couple of months now, I’ve said that gold mining companies will have a strong first (and second) quarter thanks to higher metal prices. Stock prices, as you know, are largely driven by revenues and free cash flow (FCF).
Will inflation soar? Will monetary policies work as intended, and what precedent are they setting?
Last week I ran across a powerful essay by Morgan Housel, whom I knew when he wrote for The Motley Fool. He is now a partner at The Collaborative Fund and still writing. His article looks at five lessons from history that, on the surface, have nothing to do with coronavirus, Trump, China, the Fed, or any of our other usual topics.
This article describes the components necessary for special-needs planning.
You may not need to be active on every social media platform. It depends on the niche you target.
I examine new research that offers a way to algorithmically determine how to draw down one’s savings.
In response to the COVID-19 pandemic governments imposed shelter in place rules for their citizens and issued orders to close all but essential business in their country. The collective impact resulted in an unprecedented global plunge in economic activity that threatens the existence of many small and medium size businesses...
Today is “reopening” day for Texas, home state of U.S. Global Investors. Restaurants, retail stores and malls can now open their doors to customers again, so long as occupancy is kept at 25 percent of what it normally would be.
Why is it that a fire on the other side of the planet attracts far more attention than a new innovation about to be rolled out, and how can investors take advantage of that? This is a question more relevant than ever, given the impact of the current Covid-19 outbreak.
Over the next several quarters, monetary conditions will likely be set not only by Fed balance sheet policies, but also by the expected path of interest rates.
COVID-19 has affected the data collection process for the major economic reports, including employment, consumer prices, retail sales, and industrial production. However, the incoming economic figures imply a stunningly swift, sharp decline in economic activity.
We need to fight the virus before we open the economy, according to Larry Summers.
You have to love The Wall Street Journal writer, Jason Zweig. His extremely inciteful “Intelligent Investor” column could be called “Jason’s Wet Blanket,” because he seems to throw a wet blanket on most investment disciplines in U.S. stocks. This week’s wet blanket is designed to create even more desperation for value investors via his interview with Charlie Munger.
Closed-end funds are currently trading at a discount as equity markets have dropped. Here’s where to spot opportunities.
The Fed’s $5 trillion bazooka, helicopter drops of cash, and a tripling of deficits over the next two years imply a future bout of high and volatile inflation unless fiscal policy nimbly pivots to help prevent the toxic side effect of a spike in inflation. Is that expectation realistic?
Read Howard Marks's latest memo, in which he discusses the notion of making informed guesses regarding the future and shares his questions about re-opening the U.S. economy and the latest Federal Reserve moves to help the economy combat the coronavirus.
If you are hoping the “bear market” is over, and have jumped “back in” with all your capital, you are in “good company,” as many others, judging by my twitter feed, have done the same. Just be prepared to be disappointed in the months ahead.
Rick Rieder, Russ Brownback and Trevor Slaven contend that even as markets are gripped with the trauma of wild swings, and continued uncertainties, the seeds of future investment opportunity are being sown.
Contact your clients and prospects at a rate you have rarely done before. But you must use the right script.
With recent data showing a coronavirus-driven recession in the United States appears inevitable, the question for many investors is how long it will last. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, weighs in on the differences between this one and other recessionary periods—and whether policymakers can engineer a recovery.
Below is a letter we recently sent to clients about how we are responding to the recent market selloff.
A head-spinning 6.6 million Americans filed new claims for unemployment benefits this week bringing the two-week total to 10 million. That’s more than the combined populations of Los Angeles and Chicago.
How should investors think about the economy and asset values when faced with unprecedented uncertainty surrounding the effects of the coronavirus and a complete absence of guidance from analogies to the past? Read Howard Marks’s latest memo, in which he lays out the views of both the optimist and the worrier.
Our baseline economic forecast is a U-shaped global recovery, but substantial unknowns remain.
According to John Sheehan, the recent selloff in Investment Grade fixed income was exacerbated by technical factors. In his view, regulatory changes implemented after the 2008 crisis removed a critical shock absorbing mechanism that caused spreads to spike.
Much will depend on how fast businesses bring back jobs.
On Friday, Congress approved and President Trump signed into law a $2.2 trillion emergency stimulus package, the largest in U.S. history. Most American adults will be receiving a one-time payment of $1,200 in cash.
With the economic and market situation changing by the day, I decided to approach this letter a little differently. Rather than go deep on one topic, I’ll share brief bullets on the many points swirling in my mind. Think of it as Postcards from the Frontline. These will be in no particular order and may generate even more questions.
Among other things, this commentary explores historical market sell-offs and how our emotional anchor points can influence our perception of those sell-offs.
The conditions for a relatively quick and robust rebound rest on the success in containing the virus within a reasonable horizon, and a well-calibrated economic policy response.
The government-mandated shutdown of business, and the massive drop in economic activity it is causing, may actually do more harm to the United States than the coronavirus itself. Early estimates suggest the U.S. economy will contract at a staggering 20% annualized rate in the second quarter, and the number may move even higher.
I’m providing some additional resources, where I took an even deeper dive into specific LinkedIn-related topics.
Research Affiliates assesses the potential impact of COVID-19 on economies and investments, and what it means for the All Asset strategies.
These extreme measures appear to be having great success, particularly in Asian countries. Whereas the number of cases continues to rise in Italy, Spain, Iran and elsewhere, the number has begun to stabilize, if not plateau, in Asian countries.
The European Central Bank (ECB) didn’t follow other major central banks and refrained from cutting interest rates in response to the coronavirus outbreak. This signals a shift in the central bank’s preferred policy tools – read more.
Compared to past viral outbreaks, COVID-19 appears to be less fatal, yet it has received far more media coverage. Paradoxically, that may be part of the reason why it’s had a much bigger impact on public health and the economy relative to those other diseases.
The coronavirus could take us all someplace we really don’t want to go.
Artificial intelligence has opened up the financial world to new opportunities. While an early focus has been on the role that AI plays in creating back-office efficiencies, we confidently explore the impact on asset management. A common approach is one in which AI assists the investment process, but further innovation addresses the impact of AI on decision-based trading. We conclude by suggesting that the industry is likely to grow comfortable with a hybrid approach to adopting artificial intelligence, with humans still driving the creative process, despite rapid AI adoption.
