Markets Confront Terror & Tragedy

This week’s Market Update is posted at Alpha Baskets and includes the following; Of course the big news of the week was the terror attack in Belgium on Tuesday. We will limit our discussion to the markets’ reaction to the event which was almost nil. When the September 11 attacks occurred the US market was closed for several days and when it reopened the S&P 500 fell approximately 10% which took three months to recover. Subsequent attacks have seen ever smaller reactions. Even the Belgium 20 Index was higher by Wednesday morning than where it had closed Monday, before the attacks. These events simply have not been reasons to sell. Please click through to read the entire update. To the above I would add that we’ve had many posts about markets not necessarily reacting to news the way people might think including how markets now react, or don’t react, to terror events and other external shocks. With the S&P 500 within 100 points of its all time high, there has been no external shock that has ruined someone’s chance for retirement (assumes proper diversification and asset allocation). If the market gets derailed by some event and takes six months to recover then the only threat is an investor’s behavior as a result of the event, not the event itself. I went to a car show over the weekend and took a few pictures including the Mustang Shelby GT 350.   The second picture is from the Mint 400 from early in March. The Trophy Trucks are just amazing to look...

Wednesday Twofer

My latest post for Alpha Baskets looks at both the current state of the equity market as it relates to sticking to investment process as well as an interesting opportunity close to home for someone newly retired to save a lot of money. From the post; Part of the plan is to have a volunteer live there while other volunteers come and “work” during the day. The person or couple living there would do so rent and utility free except for cable/satellite TV. It would be a lot of work without question but a great situation for a younger retiree or retired couple to simply save on rent for a few years or rent out a home they own for extra income. Please click through to read the entire post. The first picture is of Progressive Field, home field of the Cleveland Indians taken in 2014. The view from behind home plate with a skyline in the background is one of my favorites at ball parks.   The second picture is from the Phoenix International Raceway last...

It’s An Easy Planet

This week’s market update is posted at Alpha Baskets and includes the following; Further complicating the situation is the extent to which other central banks are increasingly easing their already accommodative policies. Japan and the ECB are moving further into negative (rate) territory and increasing their asset purchases. How complicated, maybe distorted is a better word, are things these days? Barron’s notes the recent strength in the Dow Transports in conjunction with a 33% rally in crude oil which becomes fuel which allows the transportation stocks to actually, you know, transport stuff. Please click through to read the entire update. Earlier in March I went with a college buddy to Las Vegas for the primary objective of going to the college basketball tournaments that happen there; specifically the West Coast Conference final, the Mountain West and the Pac 12. We did not go to the WAC. I am not a Vegas guy, I don’t enjoy gambling (no gambling at all my last two visits), but we had a blast. We planned the trip not knowing that the Mint 400 was running at the end of the week or that there was a NASCAR race at the start of the week. While I am not really a NASCAR fan, the spectacle of the races is epic and the pictures are fun to take. We didn’t get there in time for the NASCAR race and I left on Friday, the Mint 400 ran on Saturday, but as mentioned before I was able to check out the inspection day before I left. Maybe one year I’ll go for the entire week. This...

Your Strategy Will Sometimes Lag And That’s OK

My latest post for Alpha Baskets looks at the extent to which different strategies rotate in and our of favor. For example dividend strategies generally lagged the broad market in 2015 by a wide margin but so far in 2016 they are generally outperforming by a wide margin. Whatever your method for investing there will be times that it beats the market and times where it lags, it cannot be the best for all times which is an important concept to remember to avoid falling into the trap of chasing last year’s winner. From the post; Underperformance for a couple of years although completely normal potentially breeds impatience which can lead to chasing the performance of what just did well in the expectation that it will continue to do well. In simplistic terms something that just outperformed last year has a good chance of underperforming this year. The person who perpetually chases last year’s winner has a high likelihood of always lagging which does not have to be ruinous but does make things harder over the long term in terms of keeping pace with the projection of “the number.” Please click through to read the entire post. More pictures from the Mint 400 Inspection day....

Heavy Handed Central Banks

This week’s Market Update is posted at Alpha Baskets and includes the following; Barron’s devoted a lot of real estate to recapping recent central bank actions including how many times the FOMC might raise rates this year. Central Bank policy has of course always been a very important ingredient in the capital markets recipe but in the last few years news of hikes, decreases, ZIRP and now NIRP (negative interest rate policy) has had undue influence on markets to the point of analysts trying to quantify how much of the run since the low seven years ago can be attributed to the Fed (a Yahoo Finance headline proclaimed 93% of the gain was caused by the Fed). Please click through to read the entire update. I had the opportunity to go to the Tech Inspection of the Mint 400 a few days ago. The Mint 400 is an off road race that runs near Las Vegas that is along the lines of the Baja 1000 or Dakar Rally. I wasn’t able to stay for the race but did visit the inspection which is downtown near the Fremont Experience and open to all comers. There are several classes of vehicles in the race including Trophy Trucks and various types of buggies. The Trophy Trucks are my favorites, they appear to be mostly Ford Raptors modified such that they kind of resemble Humvees. Below are some pictures from the event and you can see more at https://www.facebook.com/nusbaumpictures/ and https://www.instagram.com/rogernusbaum/  ...