• Adams Financial Concepts,  Current Events,  The Investment Industry

    The Biggest Stock Market Loss Ever

    Archegos, a $10 billion fund, may have lost $100 billion. The final number is not yet settled and may not be for several months, but the loss is huge and it all seems to have happened within 48 hours How did it happen and who is Archegos, anyway? And how could a fund worth $10 billion lose $100 billion? Archegos is a Greek word for “one who leads the way”, and what a way it turned out to be. Archegos was founded as a family office by Bill Hwang. Hwang cut his teeth as one of the so-called “tiger cubs” of investing. Julian Robertson ran the very successful Tiger Management…

  • 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,  COVID-19,  Return on Investment

    Following 2020, A Little January Dip

    Almost three times the original investment in ten months! Check the graph! Three new profit-sharing accounts and a little dip. Mid-February both the Profit Sharing and Growth Accounts are up double digits according to internal estimates. We are off to what appears to be another very good year. Given the probable passage of the $1.9 trillion stimulus package, the increasing vaccinations, the reduction of COVID-19 cases, and the reopening of the economy, I am guardedly optimistic for 2021. I spent considerable time reviewing the 2020 77% increase in the composite of client growth accounts following the 40% increase in 2019. I reported my findings in a previous newsletter. Both look…

  • 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…

  • Current Events,  The Investment Industry

    GameStop – What Happened?

    “Things that have never happened before happen all the time,” wrote Scott Sagan, and while he was referring to mismanagement of nuclear materials, I think his words are certainly applicable to recent market events.[1] There are two lessons, maybe three, we ought to learn from GameStop’s shocking rise last week. First, that unexpected “black swans” seem to happen almost on a regular basis. In the last 40 years, the market dropped 22.6% in one day, October 19, 1987. In 2000, the dot-com crash took the NASDAQ down 80%. In 2008-09 the Great Recession took the market down 37%. And, of course, 2020 saw the pandemic. Things that have never happened…

  • Adams Financial Concepts,  COVID-19,  Current Events,  Return on Investment,  The Investment Industry

    5 Lessons from 2020 Hindsight

    Do you know of anyone who predicted the pandemic? Anyone who guessed we would enter 2020 and within months see a pandemic that would result in over 1.6 million deaths? Who could have predicted that the United States would be the country with the highest number of cases and the highest number of deaths? Who could have predicted the market would drop 34%, only to recover to an almost normal ~14% gain by the end of the year? Frankly, no one. Looking back on 2020, here are five important lessons that I and all investors should learn: 1. Black Swans happen. Every so often in a bevy of white swans,…

  • 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…