“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The Intelligent Investor is a realist who sells to optimists and buys from pessimists.” – Benjamin Graham By definition, a bear market is when securities fall 20% from their recent high. S&P…
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How Entrepreneurs Can Prep For A Recession
“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die of euphoria.” – Sir John Templeton Business confidence and consumer confidence have never felt further apart. US real GDP contracted by 1.4% in Q1 of 2022 (annualized). Recessionary risk went from being inevitable to imminent. Meanwhile, the jobs report came back…
Earnings Boost?
“Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffet Stocks fell sharply last week and beginning of this week. Netflix shocked the market with its earnings and outlook. This impacted Meta, Disney and other media companies. Asset classes across every sector are being re-priced after the Fed chair, Jerome…
Should Twitter sell to Elon Musk?
“When something is important enough, you do it even if the odds are not in your favor.” – Elon Musk Last week, Elon made an offer to buy Twitter at $54.20 per share to take it private and own the business outright. 10 days prior to making this offer, Elon purchased 9.1% of Twitter to…
Deep Dive: How Inflation Became a Problem
“Inflation is taxation without legislation.” – Milton Friedman Inflation, by definition, is too much money chasing too few goods. You’re feeling the pain at gas stations, grocery stores, and restaurant bills. Everything is feeling expensive. How did we get here? The Fed has two jobs: to achieve price stability and target max employment. Historically, price stability comes at modest…
Late Cycle Economy
“Quarterly earnings are a function of the weather for many companies; commodity pricing, competitor price changes, volumes, etc. all impact the business in the short term.” – Jamie Dimon Short term thinking yields knee-jerk reactions to micro and macro events in life. It creates zero sum games between people, minimizes long term value creation and amplifies…
What Rate Hikes Mean For Business and Investing
“In the short term, the stock market is a voting machine; in the long term, it’s a weighing machine. – Benjamin Graham We’re settling into a new world; a transition from “free money” to “cheap money.” But cheap is feeling expensive. The Fed announced a rate hike of 0.25% two weeks ago. Word on the street is the…
What Is Stagflation?
“Most of us spend too much time on the last 24-hours and too little on the last 6,000 years.” – Will Durant In February, inflation clocked in at a 40-year high. Last week, capital markets made a U-turn and gained some upward momentum. Few reasons why this happened: The Fed confirmed a 0.25% rate hike…
Recession on the horizon?
The world breaks ever decade or so. Morgan Housel recently wrote about a “shock cycle” for all big news events: Assume good news is permanent. Oblivious to bad news. Ignore bad news. Deny bad news. Panic at bad news. Accept bad news. Assume bad news is permanent. Ignore good news. Deny good news. Accept good…
Market Fragility
We’re living in a time where investors across every asset class are worried about the same thing: monetary policy and its impact on markets. From REIT fund managers to VCs investing in tech to PE folks investing in mid-market companies; all the way to retail investors. There are two types of market environments: volatile and…