Quote of the day...

The following from Pension Partners in August of 2014 has all-too-often been my observation of the individual investor's -- left to his/her own devices -- relationship to the stock market:

What Matters in Golf and Fishing, and Investing Too -- OR -- A River Runs Through Everything...

The hit movie A River Runs Through It provided a boost to the fly fishing industry of the early ‘90s. The slow motion scenes of a young Brad Pitt elegantly casting amid the serenity of Montana’s Blackfoot River had the world yearning for what had to be the ultimate peace of mind experience.

Quote of the day...

When the market does whatever it does tomorrow in reaction to the September jobs number -- or in early November in reaction to you know what, or in December in reaction to whatever the Fed does, or on and on -- before you start thinking about the share prices of your portfolio's positions, think about John Mihaljevic's wise words in his blog post from yesterday:

Market Commentary: Quicktake (video)

The charts in the video represent each respective sector's performance relative to the S&P 500 Index (as opposed to their raw performance). I.e., when the line increases the sector is outperforming the S&P, and vice versa:

Quote of the day X2...

In his classic work Economics in One Lesson (an accessible book that anyone desiring a clean, clear, unbiased view of how the economy works owes it to him/herself to read), Henry Hazlitt addressed the unequivocally pernicious overall impact of tariffs, and finds it paradoxical that anyone might find such commonsense paradoxical (which speaks to the power of political propaganda):

Today's TV Segment (video)

To clarify, real estate investment trusts and gold would be with utilities in terms of getting hit on the prospects for higher interest rates, where I say:

"utilities have been getting hit pretty hard, real estate investment trusts, gold -- and financials have been rallying. This is kind of a setup, in terms of sectors, that suggests to me that the market is discounting a fed rate increase".

 

Quote of the day...

In his September 27 blog post, Collaborative Fund's Morgan Howsel does a nice job describing the differences between bubbles and cycles, here's a snippet:

If you find an asset whose price looks expensive and is probably going to fall, you likely haven’t found a bubble. You’ve found capitalism. Excesses will correct, recover, and life will go on.

But that raises a question: If we know cycles are regular, why not try to get ahead of them by buying and selling before they turn?

Because regular does not mean predictable.

We can say, in hindsight, that you should have sold stocks in 1999 and repurchased them in 2002. We can say, in hindsight, that you should have gotten out of the market in 1929 and bought back in in 1932. But not one person in a million actually achieved this, which should make us question how feasible it is do it in the future. Look at the returns of macro hedge funds, which try to ride the ups and downs of cycles and bubbles. You would not wish them upon your worst enemy.

The investing world becomes a lot less scary when you view most booms and busts as cycles rather than bubbles. Will things ebb and flow, sometimes by a lot? Well, yeah. That’s what you signed up for as an investor. But is everything with a valuation above its historic average a civilization-shattering bubble? Not by a long shot.