Mile High View

Mike talks about big ideas and themes in modern investing.

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

    Do You Believe It?

    Peter Lynch said, “If you cannot convince yourself ‘When I’m down 25 percent, I’m a buyer’ and banish forever the fatal thought ‘When I’m down 25 percent, I’m a seller’ then you’ll never make a decent profit in stocks”.[1] Lynch was one of the greatest investors of all time. He was, of course, talking about a single stock, not an entire portfolio. But in a concentrated portfolio, a stock down 25% can drag down the short-term performance. For the first quarter, I expect that the total of my client portfolios will be roughly flat. That is after a 77% gain in 2020 and 40% gain in 2019. None of the…

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

    Should We Be Worried?

    What a week it was for the market! Up one day, down the next. Back up and then down and then down again! So what gives? Should we be worried? The latest data indicators painted a gloomy picture. If you assume the severe winter storms, including snow and freezing temperatures across much of the United States, are going to continue through the summer, and if you think no one is going to spend their stimulus checks, then things do look pretty bad. But the weather changes, bringing with it summer’s new perspective, and most recipients of stimulus checks and monthly child benefits are going to spend them. From that perspective,…

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

    Is the Bear Growling?

    There is a lot of talk today about the Buffett Indicator. The Buffett Indicator is the ratio of the market cap of all publicly traded stocks to GDP. Pessimists are saying the Buffett Indicator is predicting a bear market or even a crash. According to the indicator today, stocks are overvalued. There is no question that Warren Buffett has been a brilliant investor, but should we really use this indicator? He is a “bottoms-up” investor, as I am. But there are more problems with the Buffett Indicator. Almost half the revenues of all publicly traded companies come from overseas sales. The United States represents just 16% of worldwide GDP. So…

  • COVID-19,  Current Events,  Financial Planning,  Mile High View,  Super Cycle,  The Investment Industry

    Don’t Be Fooled!!

    The rapid recovery of the market in 2020 was exceptional. Don’t count on a repeat during the next big sell off. Instead, plan for a “Margin of Safety” in your portfolio. The bounce back of 2020 is the shortest on record. Most market recoveries take a lot longer. If counted in inflation adjusted terms, the drop that began in 1966 did not recover for 30 years. Stocks hits 1,000 on the DOW in 1966 and then bounced up and down for 16 years before going on to new highs. But inflation roared during that time and devalued the dollar by 70%. It took three times as many dollars on the…

  • Current Events,  Financial Planning,  Mile High View

    Inflation: Now Is the Time to Prepare

    Beware the slow “creep” that could devalue your investments. In their book, The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival, Charles Goodhart and Manoj Pradhan make the point that changing demographics has the potential to reduce the value of your portfolio.[1] Since the end of World War II, there have been several major changes in the supply of labor. First, there were the baby boomers born from 1946 to 1964; eighteen years later, they powered a surge of 75 million new young fresh faces that led a migration from cities to suburbs and prompted a building boom in housing, schools, fast food, and shopping malls. They…

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

    How We Achieve High Returns

    Peter Lynch called them “10 baggers”. Some people call them “home runs”. Some authors describe them as “long tails”. They have been called “high-fliers”.  What are they? They are stocks that will grow ten-fold or more. The strategy at Adams Financial Concepts, LLC (AFC) and for Mike Adams, even before founding AFC, has been to search for those companies with the potential to be 10-baggers and to do that in portfolios with a limited number of total holdings. When there are 300 stocks in a portfolio the 10-bagger will make little difference on the total portfolio performance. But in a portfolio of eight to ten stocks, one high flier can…

  • 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.…