Mile High View

Mike talks about big ideas and themes in modern investing.

  • 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…

  • Mile High View

    Climate Change and Energy Consumption

    Watching the reports on Irma and Harvey, rubbing my eyes from the haze that covered much of Seattle, and having the wettest winter in Seattle’s recorded history to this summer’s longest period without rain all feels like climate change to me. Yet we seem to be plunging forward into a future which will require more natural resources and more energy than ever. I am an optimist, and am confident that we will solve the problem – we will find a way to produce more energy with less damage to the climate. There will be investment opportunities on both sides (energy needs and climate change), and that is what I wanted…

  • Mile High View

    Inflation to Escape Depression

    Howard Marks, investor and writer, said “you can’t predict but you can prepare.” So, today I’m taking a mile-high view of the supercycle (what’s a supercycle? Read more about it in “The Third Supercycle Is Now”) and how I believe it will end, so that we can all be prepared. I believe that we will be able to speculate on how this supercycle will end by looking at previous cycles and the way they ended. By doing so, we’ll have the knowledge we need to prepare for whatever comes. Mind you – I believe that we still have a number of years left in this secular bull market, but it…

  • Current Events,  Mile High View

    The History of Crowdfunding

    In 1958, Harvard economist John Kenneth Galbraith published The Affluent Society, in which he outlined his belief that the US had reached the pinnacle of affluence – that American standards of living had risen as high as they ever would. Most families owned a car, their own 1,100 ft2 (on average) home, and even had refrigerators and telephones in those homes. This, Galbraith said, was as high as affluence in the US would rise. But we know that his assumption was wrong. Look at where we are today – smartphones and PCs and bigger houses and 3-car families, all concepts that Galbraith couldn’t predict. Society did not stagnate in the…

  • Mile High View,  Return on Investment

    The Myth of Excellence – Part Two

    I’ve been talking about how companies are seeing their lifespans shrinking – particularly how short the lifecycles of companies in the S&P500 have become. If you’re an investor that favors the buy-and-hold strategy, this is an intimidating prospect. The days of finding that perfect company, buying it, and tucking it away in the proverbial sock drawer are coming to an end. The average lifespan of a company in the S&P500, a study by Yale Professor Richard Foster found, was only 18 years!1 With such a daunting new world for investors to face, I’ve been studying good business practice, and found myself agreeing with some of the points made by Fred…

  • Mile High View,  Return on Investment

    The Myth of Excellence – Part One

    Buy and Hold was (and sometimes still is) a strategy to find great companies: purchase their stock and put it away to hold for decades. I still believe in buy and hold, but the timeline for the holding period has significantly shortened. I recently read a book by Fred Crawford and Ryan Mathews called The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything, and it got me thinking. In the 2010s, the lifespan of a dominating company is shrinking at a rate that CEOs find alarming. Today, the average lifespan of a company in the S&P 500 is only 18 years1. That is an…

  • Current Events,  Mile High View

    The Market Is Flat

    There has been no new market high since May 21st, 2015. That’s a reality that has some investors panicking; some are even dubbing this the “Twilight Zone” (do do do do). And yet – and yet, if we ignore the preemptive panic, we can see that for all the threat a flat market can present, there’s good news. If we look at global stocks, we find that as of the end of May they were off by 8%. Commodities have lost 22.8%. European bank stocks are back to 2008 Lehman Brothers lows; Japanese bank stocks are down 30% and Chinese bank stocks down 40%. Oil is down 60% and gold…

  • Current Events,  Mile High View

    Oil and Commodities Drop

    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 overproduction that stemmed from futures contracts made in the 1990s and 2000s, and the resulting credit bubble burst. Despite this, I still believe 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…

  • Mile High View

    Where Have the Jobs Gone?

    The common belief is US jobs are going overseas where labor is cheaper and restrictions are more lenient. Is this really the case? Based on Robert Lawrence and Martin Bailey’s study in 2006, only 10-percent of the jobs lost were exported. The other 90-percent were lost because of increased productivity and demand. What does this mean for US workers? It means education is even more important. As technology continues to increase machine driven production, more blue-collar jobs will continue to disappear. Their disappearance has caused the demand for continuing education to skyrocket. Just two generations ago, one out of every five people in the US went to college. Today 65…

  • Current Events,  Mile High View

    What Does Disruptive Technology Mean For an Investor?

    Disruptive technology shakes up the norm. It unexpectedly displaces an established technology and forces the standard man outside of his comfort zone. Often arising during financial crises, disruptive technology sprouts new inventions and increases efficiency. Often in the midst of this chaos wild predictions are made about the future. On March 22, 1876, the New York Times made this prediction: “Thus the telephone, by bringing music and ministers into every home, will empty the concert-halls and the churches.” For an investor, disruptive technology has the following important implications – big opportunities and accompanied with the need for intelligent deduction. The catch is, traditional Blue Chip companies usually make incremental changes rather…