Category: Adapting to Change
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What is the Phillips Curve?
There’s a lot of talk about the “Philips Curve” in regard to the Fed decision. What is the “Philips Curve”? First, keep in mind it is an economic theory. A theory an is idea that is… Read More
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Warren Buffett’s Berkshire Hathaway Hasn’t Managed Downside Risk
Stephen Gandel shares an interesting observation in Fortune ” Warren Buffett’s Berkshire lost $11 billion in market selloff“. He points out that Buffett’s Berkshire Hathaway (BRK.A or BRK.B) is tracking the U.S. stock indexes on the downside. He says:… Read More
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Stock Market Decline is Broad
We typically expect to see small company stocks decline first and decline the most. The theory is that smaller companies, especially micro companies, are more risky so their value may disappear faster. Below, we view the… Read More
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Using the Month of September to Understand Probability and Expectation
September is the month when the U.S. stock market’s three most popular indexes usually perform the poorest. So say the headlines every September. I first wrote this in September 2013 after many commentators had published information about… Read More
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U.S. Sector Observation
I don’t often comment on a day’s price action in the stock market, but thought I would. The U.S. stock market reversed up somewhat today. Market trends swing up and down on their way to… Read More
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Global Markets Year to Date
This is a quick year to date observation of some global market trends. First, we start with the popular U.S. stock market indexes. The Dow Jones Industrial Average is down -9.6% YTD. S&P 500 is… Read More
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Why Index ETFs Over Individual Stocks?
A fellow portfolio manager I know was telling me about a sharp price drop in one of his positions that was enough to wipe out the 40% gain he had in the stock. Of course, he had… Read More
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Uncharted Territory from the Fed Buying Stocks
I remember sometime after 2013 I told someone “The Fed is buying stocks and that’s partly why stocks have risen so surprisingly for so long”. He looked puzzled and didn’t seem to agree, or understand.… Read More
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Fear is Driving Stock Trend…
Fear is now driving the stock market. As prices fall, investor sentiment indicators suggest that fear increases as prices fall. When sentiment gets to an extreme it often reverses, or it can become contagion and drive… Read More
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Global Stock Market Trends
Stock markets around the world declined -2% or so arguing over which flag to fly. It was a good day for a cash position, or something other than U.S. and International stocks. Below is a table of U.S.… Read More