With all the talk this week about stock market darlings, I thought it would be a good idea to talk about losses. Because losses can be temporary, just like gains, but losses tend to leave a scar. What’s amazing is how quickly losses are forgotten by investors, and the cycle repeats. Because, wait for it, “it’s different this time.” No, it’s not. Not to ruin your Friday, but emotionalism, greed, fear, and “hey, look how much that guy’s worth” have been around since the beginning of time. And it’s been shown by psychologists Daniel Kahneman and Amos Tversky that the pain from stock market … [Read more...]
Dow 38,000 and Beyond
Let’s not get too excited about Dow 38,000. Your Survival Guy remembers when we hit Dow 10,000 in 1999. As you can see, we crossed that bridge again and again. What’s always amazing to me is how short the average investor’s memory is (you’re not average, dear reader). Look how long it took for Dow 10,000 to gain some terra firma. Then, look at how long it took for NASDAQ. Not pretty, as an entire generation was lost to price wars—prices were stagnant. With the so-called Magnificent Seven running a third of the show for the S&P 500, let’s not forget that … [Read more...]
China Moves to Curb Stock Selloff
Jason Douglas of The Wall Street Journal tells his readers that the central bank of China is sending a signal that officials are eager to curb a stock selloff and support the economy. Douglas writes: China’s central bank announced new steps to boost bank lending to households and businesses, an early move in what is expected to be a broad but restrained campaign by authorities to prop up growth this year after a lackluster 2023. It comes on the heels of signs of gathering government support for China’s swooning stock market, with investors detecting a rash of share buying by pension … [Read more...]
“What Have You Done for Me Lately?”
In a “What have you done for me lately?” world, it’s easy for investors to see this year’s returns on the S&P 500 and compare their performance. That’s short-sighted. Because if we look over the last two years, for example, the S&P 500 has basically returned to where it was this time in 2021. What’s lost on many is that a dividend-centric approach offered a way to be paid while the market price spun its wheels. Now then, what’s not often discussed is how many investors bailed out of stocks on the way down and missed the rebound, and in their frustration, are now … [Read more...]
Time to Revisit Your Bond Portfolio?
In The Wall Street Journal, John Greenwood and Steve H. Hanke, both economists at Johns Hopkins, discuss the similarities of today's markets to that of 1987, and October 19 of that year, which is known as "Black Monday." They write: This brings us to the stock-market crash of 1987. In that year the key 10-year bond yield rose steeply from January onward (from 7% in January to 10% by Black Monday in October) and the money supply slowed sharply. In 1987 growth of M2 declined by almost half, from 9.7% year-on-year in January to 4.9% in September, while M3—no longer published by the Fed—slowed … [Read more...]
“Stocks Always Comeback,” They Say
“Stocks always come back,” they say. “Just look at the history of the markets.” OK, thinks Your Survival Guy. Let's. Take a look at how markets did from 1965 through the 70’s, a time not unlike today, where inflation soared, the country was in decline, and stocks did basically nothing good. That’s a long time for markets to do nothing—a good chunk of retirement for those who were retired. That’s why building a margin of safety is so important for the retired investor. You need to have a line of defense in case stocks don’t save the day. You need to understand risk and know that … [Read more...]
Has Tupperware Survived Its Brush with Death?
Tupperware was nearly out of business, but, reports The Robin Report, it may have been saved, for now. Arick Wierson writes: Way back in May of this year – I know that’s only a few months ago but with the entirety of summer sandwiched in between now and then it now seems like an eternity has passed – business scribes were getting ready to write their eulogies for the iconic American household brand Tupperware (TUP). Why? It had just announced that there was “substantial doubt about the company’s ability to continue as a going concern.” (In case you’re wondering, that’s business-speak for … [Read more...]
You Can’t Time the Market: When Hubris Fails
Originally posted on May 18, 2020. Coronavirus Infects Stock Market: Part XLVIII You can’t time the market. Don’t even try, because you just might end up being wrong. Consider commercial real estate, for example. Anyone want to buy a high rise in Manhattan? Let’s hop in our time machine and look back to 2018 when the stock market was having a rough year. The DJIA ended the year down close to six percent. Big bad pensions wanted nothing to do with stocks. They wanted the “safety,” the “reliability of,” wait for it—commercial real estate. Let’s roll the footage (WSJ article Nov. … [Read more...]
Is this the Dawn of the Ex-China Investment Age?
Investors are looking for investment opportunities in Asian markets that exclude China. Fear of geopolitical risks surrounding China has created the demand for investment opportunities in countries deemed safer. Hudson Lockett and Leo Lewis report in the Financial Times: Global fund managers say they are rushing to meet client demand for new Asian investment products that exclude China, as investor appetite for the region’s largest economy is hit by slowing growth and mounting geopolitical risk. Fund managers said requests for “ex-China” products included the possibility of “Asian allies” … [Read more...]
Forbes Global 2000: The Bigger They Are, the Harder They Fall?
This from Forbes; "Every year since 2003, the Global 2000 has ranked the world’s publicly traded companies by sales, profit, assets and market value, with all four variables given equal weights. This year’s ranking looks far different from the list’s first installment 20 years ago, when Citigroup was No. 1 and AIG, Fannie Mae and IBM were among the 10 largest companies in America. None are in the top 20 today." These are the twenty-five largest publicly traded companies by sales, profit, assets, and market value [with all four variables given equal weights] in the world. JPMorgan … [Read more...]
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