Quote of the Day: The Defining Reason Why Some Succeed and Others Fail at Investing

In Jack Schwager's Hedge Fund Market Wizards, Columbia Business School professor (and author, and successful investor) Joel Greenblatt describes how he begins his Value and Special Situations Investing course:

Quote of the Day: THE Mistake Investors Make

In his highly instructive book of interviews, Hedge Fund Market Wizards, Jack Schwager asks the successful investor, author, and Columbia Graduate School of Business professor Joel Greenblatt what mistakes investors make. His immediate response was:

Chart of the Day: Market Reacts to Trump's Affection for Powell

In our October 5th blog post we suggested that Jerome Powell best fit the mold of a Fed chair any sitting politician would love. I.e., he has a reputation for going easy on monetary policy (for our purposes here, read interest rates).

Chart of the Day: Very Welcome News!

In our September 27th post we discussed the importance of capex (investing on the part of companies in business-expanding capital); an essential ingredient in a healthy, growing economy. The post serves as a nice, and very short, primer on capex.

This Week's Message: Breaking Records and Broken Records

Sorry folks, but as the stock market continues to break records we have become the proverbial broken record here on the blog. The long and the short of it is simply that for the moment this market remains a long (a buy), and anyone who dares to go short (sell), gets it handed to him/her.

Charts of the Day: Worried About the Global Economy? Well, CAT Isn't!

Once in a while we feature our tracking of Caterpillar's global sales. Here's the latest:    click each insert to enlarge...

Headline of the Day: Communists Acting Like Capitalists

What reducing trade restrictions can do for a stock market:

Shanghai Plan to Lift Trade Barriers Sends City Shares Soaring(Bloomberg) -- Traders are snapping up stocks with Shanghai in their name after the city’s Communist Party chief confirmed plans to set up a free trade port that would aim to ease restrictions for incoming cargo. Eleven of the top 20 gainers on the city’s equity gauge were companies whose names begin with the word Shanghai and all 11 surged by the daily limit. 

The empirical evidence is overwhelming that the countries most open to trade sport the healthiest markets, and, ultimately, the healthiest economies.

Chart of the Day: Not So Fast Folks

I take the opportunity at each client review meeting to bemoan the public emphasis on the Dow Jones Industrial Average. We're talking a market benchmark that consists of merely 30 U.S. stocks and, to make matters stranger, the index is price weighted -- the stocks with the highest share prices have the largest impact on the Dow's performance. 

Consequently, the largest company on the planet, Apple -- in terms of its impact on the index -- plays 7th fiddle (virtually tied with IBM)  to, in order of impact, Goldman Sachs, Boeing, 3m, United Health, McDonalds and Home Depot. 

This Week's Message: North Korea, The Fed, and The Markets in a Nutshell

Our schedule this week requires that we spend less time here on the blog. While we'll certainly step in and offer some perspective should markets demand, for now we expect that the following will be it for the week (save for perhaps the irresistible quick quote or chart here and there).

Chart of the Day: Scrapping NAFTA?... Hmm...

Here's the postscript to a little something I wrote last week:

P.s. As you may know, the North American Free Trade Agreement  (NAFTA) may be on the chopping block. The President has suggested of late that termination of the agreement, at the hands of the U.S., is likely. 

How We'll Remain Globally Relevant -- And a postscript on NAFTA

I know many of our readers sympathize with the notion that it's time to play trade hardball with the rest of the world. Regular readers and clients know that in my view this is a most dangerous notion.

Chart of the Day: Worried About the State of Clean Energy Investment? Don't be!

Investors pumped $66.9 billion into clean energy around the world in 3Q, up 40% from the same period a year earlier, according to Bloomberg New Energy Finance. Wind investment reached $34.3 billion, the highest since 2Q 2016, and surpassed solar investment of $30.5 billion. A $4.5 billion Oklahoma panhandle wind project was the biggest deal in the quarter.

This Week's Message: Again, How on Earth??

Regular readers now know this Jesse Livermore quote all too well:

"Not even a world war can keep the stock market from being a bull market when conditions are bullish, or a bear market when conditions are bearish. And all a man needs to know to make money is to appraise conditions."

This is the one I've heard myself repeating most often during client review meetings of late -- given the relentlessness of the geopolitical risk-related headlines. The process involved in "appraising conditions" is how we here at PWA spend a great deal of our time. 

Tillerson, Gold and The Dollar

The strong setup for stocks -- that we've been illustrating herein since last summer -- remains, and appears to be allowing for a surprising sanguineness among the major averages when it comes to the, let's call it, angst, in Washington. Although it does appear to be playing havoc with a couple of other markets: Specifically currency and gold.

Data Favor the Fed Hawks...

In this week's weekly message we noted that our economic assessment isn't screaming inflation, but it's indeed suggesting that the Fed would be well advised to continue to ease up on the gas pedal (nudge rates higher while reducing its balance sheet) going forward.

This Week's Message: The Fed's Timing is Critical and Let's Pray Not Political!

As we've been reporting herein, the economic backdrop suggests a looming recession is simply not presently... well... looming. Quite the opposite in fact.

Quote of the Day: Maintain a critical eye...

Highly respected trader and author Alexander Elder speaks to why investors should view media-spawned prognostications with a most critical eye: