Do we have the capability to eliminate booms and busts in economic activity? The answer in my judgment is no, because there is no tool to change human nature. Too often people are prone to recurring bouts of optimism and pessimism.
September 20, 2022
As I pulled into the parking lot of Pier 4 on the Boston harbor, I was stunned by what I saw. To my right were two colossal ocean liners, each about 1,000 feet long. The ships had large flags reading, “Welcome to DEC World.” It was 1987 and Digital Equipment was then a 14-billion-dollar computer company, second in size only to IBM. The ships...
August 22, 2022
Since 1956 there have been 10 bear market cycles when the market declined 20% or more. The first one led to the ensuing 1957 bull market that would give birth to the modern investment business. It also pioneered a new sector, then called electronics, now known as technology. In 1958, Jerry Tsai was chosen to manage the new Fidelity Capital Fund...
July 25, 2022
It is always after a stock’s decline that one discovers the reason it had previously been going down. The more parabolic (straight-up) a stock’s previous assent has been, the greater the need for a sell discipline. If you’re an investor on your own, or are looking to hire a portfolio manager, you or they must have a SELL discipline. We...
June 13, 2022
The last time the Federal Reserve was faced with raising interest rates - on a secular basis - was almost 60 years ago. Of course, no one could have imagined, three generations later, it would happen again. Both times it was thought to be a cyclical or “transitory experience.” In 1965 Fed funds were 1% on a 17-year journey to 20%! This resulted...
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