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.
January 12, 2023
As you might recall, we identify the period of 1955-1956 as the beginning of the modern investment era. Prior to that, stocks had yielded more than bonds as they were deemed inherently riskier. It was a belief that changed in the 1950s with the arrival of Jerry Tsai at Fidelity Investment Management. His mother, who had influenced him...
December 08, 2022
“The Road to Hell is Paved with Good Intentions.” Such is the old (1828) Portuguese proverb. It would seem to be a reasonable description of the Federal Reserve’s prior policy for 12 years with interest rates at 0%. Ironically, there are also 12 Federal Reserve Governors on the Federal Reserve Board. These board members have more than 400 Ph.D...
November 16, 2022
Mansions result from great partnerships. It was a lesson I first learned as a 12-year-old caddy. I would always ask the person I caddied for what he did for a living. To me, he was rich, and I also wanted to grow up and be rich. However, my father had inculcated me in the belief, that if I wanted to succeed, it would be solely up to me...
October 13, 2022
Price distortion in the stock market started in 2005 with the impact of high-frequency-trading. Three years later the Fed responded to the debt crisis with 0% interest rates. Both events would lay the groundwork for price distortion. Zero percent would obliterate active stock managers and give rise to trillions in index funds. The zero-interest...
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