Mile High View

Mike talks about big ideas and themes in modern investing.

  • Adams Financial Concepts,  Current Events,  Financial Planning,  Mile High View,  Return on Investment,  The Investment Industry

    Higher Returns

    I believe that higher returns do not mean higher risk. Let me say it again: I believe that higher returns do not mean higher risk. Albert Einstein stated: “No matter how, where or when or by whom measured the speed of light in a vacuum is constant.” That sums up the scientific method. There are no exceptions. NONE! If someone were to find an exception, the whole theory is invalid. Since Irving Fisher in the 1920s, economists have been trying to find the theories and laws that govern the stock market. The “Efficient Market Curve” has been proposed and is generally accepted as rational and logical. It is the concept…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Mile High View

    Climate & Migration

    No matter what you think of climate change, some facts are undeniable. That is to say, there are going to be investment opportunities, and if you want to benefit your investments by investing on the long side in those companies with the best chance to succeed and short those that won’t rise to the challenge, then I believe what I am about to share is important to understand. You have likely experienced a microcosm of how the greenhouse effect works in your daily life. During the summer, you have the air conditioning running in the car even when the temperature outside is a moderate 75⁰ F. Inside the car, you…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Financial Planning,  Mile High View,  Return on Investment,  The Investment Industry

    Is It Luck or Skill?

    Doesn’t it make you feel comfortable to live in an orderly and predictable world? Isn’t that especially true when it comes to investments? Haven’t you heard that the markets do not like uncertainty? But isn’t it also true that the only constant in the world is change? In spite of that, our human brains have evolved to downplay the role of luck in our lives. That is why most investors like a financial plan that lays out the next 20 or 30 or 40 years of our financial lives. There in black and white, or more probably in a rainbow of colors, is the map of our financial future. It…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Financial Planning,  Mile High View

    Change Is Difficult

    The question is this: does the value you are receiving now justify staying put. After all, change is usually difficult. Have you really evaluated what value you are receiving right now? Do you remember Harry Truman: not President Truman, but Harry Randall Truman? Harry Truman lived on the south end of Spirit Lake at the base of Mount St. Helens. He had owned and operated a recreation and fishing lodge for decades. He called the mountain his friend and claimed a deep relationship with it. He had watched the puffs of ash and had become an expert in the earthquakes. Those tremors had become more frequent in 1979 and 1980.…

  • 401ks,  COVID-19,  Current Events,  Financial Planning,  Mile High View

    Clouds on the Horizon

    Right now I am beginning to feel like the guy who jumped off the 50 story building. Half way down someone yells, “How are you doing?” “So far, so good.” While the S&P 500 is within ten percent of the end of last year and my clients are even with the end of last year, there are dark clouds forming. Will they blow over, dump some rain, cause a downpour, or turn into a thunderstorm? Will COVID-19 infections continue up? Will the government stimulus run out? With spending way down, how does that affect the overall economic outlook? What is China doing? How close are we to a vaccine? Those…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Mile High View

    Oil 2020

    What would you say if someone offered to pay you $37,000 to just take one single contract for 1,000 barrels of oil? All you had to do is find a place to store it. That actually happened a week ago. All you had to do was figure out where to put ten tanker trucks of oil until the market got better, and you would have been paid to take custody of the oil. It doesn’t take a rocket scientist to know that demand for oil fell off a cliff. Airlines were cancelling flights and leaving their planes on the ground. People were being ordered to stay home and shelter, and…

  • COVID-19,  Current Events,  Mile High View

    2020: DOW Down 2,000

    Hello 2018. Yes, 2018, not 2008. The drop has been sharper, but it feels the same. Computers panicked! This drop has been caused by panicked computers, not humans. Between 60 and 70 percent of all stock trades on normal days are made by computers. They can read the news in a fraction-of-a-second, and they have a list of rules on what is good news and what is bad. When the news falls into “bad” parameters, the computers sell. They don’t just sell once, but many times, and they make money on fractions-of-a-dollar, and then cover their sales a short time later – wash, rinse, repeat. The algorithms are not built…

  • COVID-19,  Current Events,  Mile High View

    The Coronavirus Is NOT The Great Recession

    The coronavirus is not the Great Recession. The cause of the Great Recession was a financial crisis whereas the cause of the coronavirus is a biologic crisis. The “cure” for the financial crisis is not going to be the same as the “cure” for the coronavirus. The impact on the market of the Great Recession is not going to be the same impact as the coronavirus. It is best to understand the difference between the two and the difference in strategies. The Great Recession was a financial crisis. It was essentially a worldwide burst of a credit bubble that had been building since the mid-1970s. Prior to the 1930’s Great…

  • Current Events,  Mile High View,  Super Cycle

    What in the World is Happening to the Stock Market?

    Did you know that 60% of the revenues for companies in the S&P 500 are generated overseas, outside the United States?[1] It is important when looking forward to stock market performance in 2020 and beyond to understand what is happening to the world GDP and world economy. This is the first of two eLetters in which I will give you my views on the stock market in 2020. The best analysis I have seen was done in 2011 and is, in my opinion, still valid today. Standard Chartered Bank, a large bank based in London, released a study in which they state that the world is in a “worldwide economic…

  • Current Events,  Mile High View,  Trade War

    We Are at War

    The late Chuck Knox, the first coach to get the Seattle Seahawks into the NFL playoffs, had a saying: “You have to play the hand you are dealt”. In football, that is to say, you have a limited number of players, some of which might be injured, the weather may be working against you, the rival team may be more skilled, but regardless you must do your best with your team. This eletter is neither political commentary nor meant to be political in any way, but as investors, we must address the trade war between America and China. Understand too this is not an easy exercise or simple analysis; I…