• Current Events,  Mile High View

    The Truth About 2017

    One of the things that I believe sets me apart from other talking heads commenting on the state of the markets is that I hold myself accountable for my predictions. 2017 is over now, and that means that most people are talking about 2018, and prepared to let bygones be bygones – whether they were right or wrong. I think it is important to take stock of what I said back in 2016 about the year just passed, and critique myself. I said at the end of 2016 that I believed 2017 would see the stock market continue to grow, not from any short-term political ramifications, but because we are…

  • Return on Investment

    When To Sell a Stock

    I got my MBA at Carnegie Mellon University back when it was Carnegie Institute of Technology, and the MBA was called a Master of Science in Industrial Administration. Carnegie is located in Pittsburgh Pennsylvania, where the Monongahela and Allegheny Rivers meet to former the Ohio River. In those days, one of the most beautiful sites, in my opinion, was to take the tram up Mt. Washington and look down into the city. Mt Washington is not really a mountain, it’s only a hill, but the vista was so impressive. The smokestacks of Jones and Laughlin Steel spewed tongues of dancing fire streams in hundreds, if not thousands, of colors. It…

  • Return on Investment

    Investing Tips We Can Learn from Imperial Russia

    In my opinion Modern Portfolio Theory is a Potemkin Village. What does that mean? In the 1700s Catherine the Great, ruler of Russia, invited a number of foreign dignitaries to visit Russia. But in viewing the countryside she saw the villages of Russia were unimpressive to say the least. So, she commissioned Field Marshall Griorgi Potemkin to build all new villages to give the impression that the citizens of Russia lived a comparatively good life. It was completely illusionary. A “Potemkin Village” is something made to look elaborate and impressive but has no substance at all. Modern Portfolio Theory sounds like it is new and rational and “modern.” In fact the concept…

  • Current Events

    The Truth about the Commodities Drop of 2017

    2016 has been off to a rough start – in fact it is the worst start in history and for many, 2016 is stirring up memories of 2008. I believe that this fear is unfounded and stemming from misinterpreting the oil and commodities drop. They are symptoms, I believe, of the credit bubble bursting and the overproduction which stemmed from futures contracts in the 1990s and 2000s. Despite this, I still think that we are in a super cycle, and as with previous super cycles, there will be some winners and some losers. We wouldn’t be in a super cycle if everything was going smoothly. Where oil and other commodities…

  • Current Events

    Mute the T.V.

    As of January 14, the stock market had its worst start in history. Are we headed to another 2008? NO! In fact, I believe we will probably see a decent to very good market in 2016. But is that what you will hear during the presidential and congressional campaigns? No, you will be hearing doom and gloom. But how accurate is all the doom and gloom? Last December, Richard Bernstein published an article in Financial Advisor Magazine titled “Mute the TV,” in which he said “…2016 might be a difficult year for investors…not necessarily for investing.”[1] Again, it could be a hard year for investors, but not for investing. Why…

  • Return on Investment

    Common Mistakes New Investors Make

    Imagine you are invited to play a game. You are given $20,000, and can bet $1,000, you win based on the flip of a coin. Heads, you would win $1,500; tails, you lose your $1,000 bet. Imagine you agree to the game and bet $1,000. The coin comes up tails. You bet again and the coin comes up tails and you lose another $1,000. Would you continue to play? If you do and the next flip comes up tails, would you continue? You have lost three straight times. Would you stop and walk away with your $17,000? What if you tried one more time and again lost. Would you call…

  • Current Events

    January 2016

    The outlook and predictions for 2016 are, frankly, awful. Between oil prices dropping, China’s repeated troubles, and the market opening only to drop 400 points, no one seems to have anything good to say about 2016. But how accurate is all the doom and gloom? Last December, Richard Bernstein published an article in Financial Advisor Magazine titled “Mute the TV,” in which he said “…2016 might be a difficult year for investors…not necessarily for investing.”[1] Again, it could be a hard year for investors, but not for investing. Why will it be so hard to be an investor, and why is the best advice you’ll get “mute the TV”? Because…

  • Current Events

    Chinese Mercantilism and Yuan Devaluation

    Only 40 years ago, China was an agricultural nation, and yet in what seems like no time at all they have become the world’s second largest economy – second only to the US. How is this possible? I have drawn the comparison both on About Money and on my blog about the methods China has used to burst into heavy industry and those Louis XIV and John Baptist-Colbert employed in 17th century France. In fact, there are many, many parallels that help us understand why China is where it is today. Like France in 1661, China’s economy was agricultural and found it difficult to compete on the world market. Both…

  • Return on Investment

    Conferences and Comparative Money Making

    Every year, I go to several investor conferences with 2,000 to 3,000 of my closest friends. Each conference has companies who underwrite part of the cost by taking the opportunity to hawk their products at exhibitor booths. I am always attracted to the trading booths with their elaborate displays – multiple computer screens displaying the latest technical analysis of stocks and markets, the latest prices, and charts with all the most sophisticated analytical tools. There are the stochastic charts, the candlestick trend lines, the moving averages, and on and on. Surrounding the screens are the testimonials of who have made money using the tools and programs the vendors are showcasing.…

  • 401ks,  Current Events,  Return on Investment

    Lessons Investment Advisers Need to Learn from Robo-Advisers

    On May 1st, 1975 the government deregulated fixed commissions in the brokerage industry. At the time, I don’t believe many in the industry would have said this would make any great impact on revenues, and history shows most chose to carry on with the status quo. Few stock brokers (that was the title financial advisers used back then) felt there would be much change in their business. One man did see an opportunity, though, and moved to found a firm that charged significantly less in transaction fees. That man, of course was Charles Schwab, who would build a significant and competitive that would capture one-third of portfolios by 1999. I…