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

    SHOW ME THE MONEY!

    One of the most famous movie quotes comes from Jerry Maguire: “Show me the money”. In my industry, I hear so many stories about making money in stocks that make me want to shout at the teller “Show me the money!” I want the authors or story tellers to show me their strategy really works. Recently, I received a new white paper from Northern Trust that was titled “Getting Paid to Lower Your Risk”.[1] The authors were credentialed (PhD and CFAs); These are intelligent people. I wanted to see how Northern Trust was paying their clients to lower their risk. I custody my client accounts at Interactive Brokers, who started…

  • Uncategorized

    What Happens Now?

    “It ain’t over till it’s over,” said Yogi Berra, the legendary New York Yankees catcher, and it’s hard to argue with his logic. He, of course, was talking about the 1973 pennant race, but I believe it applies to the economy and the stock markets today: “It ain’t over till it’s over”. There is good news and bad news. First the bad news: The unemployment rate came in at 14.7% with over 20.5 million jobs lost since the pandemic hit. There are over 33 million people who have filed for unemployment. Not since the Great Depression have we seen these types of unemployment numbers. The economy is staggering under the…

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

    When Is the Best Time to Sell?

    When is the time to sell and liquidate portfolios? Most advisors, according to a recent study by Howard Schneider of Practical Perspectives[1], says most advisors have seen little impact from the stay at home orders and they perceive the market will return to normal in six months. I have considerable concern. Yes, I am staying the course today and am optimistic that we will be back to normal by the end of this year. But I am not blindly staying the course. Usually, I try to accomplish at least five tasks every day. On March 12th, I spent the entire day on one task and that was to determine when…

  • COVID-19,  Current Events

    What Just Happened?

    On Friday, the DOW fell 361 points and then yesterday the DOW gained 1,627 points. That is a sign that the market probably bottomed on March 23 and is beginning a climb back to new highs. It is a pattern that we have seen before. Let me give you the explanation of why I say this. The easiest illustration is Black Monday, October 19, 1987, when the DOW plunged 508 points – 22.6% in one day. People remember Black Monday, but what might have been more important was April 20, 1987. When the markets fall like they did on Black Monday, or over several days in March 2020, almost all…

  • 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…

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

    What Is Factor Investing?

    The latest fad in investing is “Factor Investing”, according to the August edition of Financial Adviser Magazine. Like a bad fad diet, these investment methods come around every few years (factor investing dates back to the 1970s[1]) and claim to have found a method for stock picking that will win every time. Factor investing relies on five genuine factors which are, according to academics, Value, Quality, Momentum, Size, and Volatility. When it comes to understanding investment methodologies, I find it helpful to imagine them along a line: I am an active investor. Does this top-down investment methodology work? I don’t think so; as an active investor with a bottoms-up approach,…

  • 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…

  • Adams Financial Concepts,  Current Events,  Mile High View

    How Will This Bull Market End?

    How will it end? Will it end in another Great Recession? Will it end with a bout of high inflation? Or will it just continue on and never end? The Great Depression of the 1930s, like the First Great Depression of the 1830s and the long-lasting Depression of the 1870s to early 1900s, was credit-related. During those economically stressful times, bank runs became panics. When a bank was in trouble, individual depositors, fearing the loss of their money, would rush to the banks to demand their money back. When the panic affected only one bank, that institution could sometimes borrow cash from other banks or sell their loans to raise…

  • Current Events,  Mile High View

    Beware!! The Unicorns Are Coming!

    That’s right, the Unicorns are coming. As an article in The Economist[1]pointed out, we use a lot of animal names: bull, bear, dog, hawk, dove, lion, and – in the last few years – unicorn. Unicorns are private companies that are valued at $1 billion or more. Lyft recently came public valued at a $16 billion market cap. Uber has filed and more will follow: Airbnb, We Work, Pinterest, Slack, and a host of Chinese unicorns. I live in Seattle and remember when Microsoft came public. It was a small startup and already profitable, but nothing close to the size of a unicorn. Starbucks had just begun to expand outside…

  • 401ks,  Adams Financial Concepts,  Current Events,  Return on Investment

    A Shocking New Trend

    Last fall, CNN opened an article with the story of Jeff Regan, who received a phone call informing him that his 94-year-old aunt was being evicted from her home in an assisted living facility. The next day, he received legal notice of the eviction.[1] If the number one fear of most people is outliving their money, this is validation. Studies are showing evictions top the list of assisted living grievances. If you google “assisted living evictions” you will find lists of “How to Evict a Resident” and “How to Write the Letter of Eviction – including templates” and “How to Take the Legal Steps to Evict Residents”. It is becoming…