Economic Analysis

Can You Afford to Reach 100?

Thoughts from the Frontline

June 3, 2017

“I often joke that 100 years from now I hope people are saying, ‘Dang, she looks good for her age!’”

– Dolly Parton

“Just because you live 20 years or 100 years doesn’t make it less meaningful. They’re both short amounts of time. So all we can do is just live in that time, whatever time we’re given.”

– Ansel Elgort

“If I had more time, I would have written a shorter letter.”

– Blaise Pascal, 1657 (and a few score other later attributions)...

Assume the Brace Position

Outside the Box

May 31, 2017

My friend and British investor extraordinaire Jim Mellon, who made a large amount of money traveling the world doing real estate, is now focused on thinking about and investing in life extension and its derivatives. But he's also worried about what happens when a lot of people live longer and how we pay for it. He shares my concern about the demographic bubble that we are already in becoming even worse as we live longer than we expected. Further, he points out the same thing I have about the...

The Great Reset, Part Two

Thoughts from the Frontline

May 27, 2017

“Premature optimization is the root of all evil…”

– Donald Knuth, from his 1974 Turing Award lecture

International Inflation Cycles Sync Up

Outside the Box

May 24, 2017

My friend Lakshman Achuthan, Co-Founder & Chief Operations Officer of the Economic Cycle Research Institute (ECRI), has done some really interesting work on international inflation cycles, and in today’s Outside the Box he shares it with us. This is a special treat – ECRI does not normally make its material available outside of its client base. I am truly grateful that he allows me to share this. Lakshman will be joining us at SIC this week in Orlando, to the great benefit of the attendees.

It...

The Great Reset: How Should We Then Invest?

Thoughts from the Frontline

May 22, 2017

“A speculator is one who runs risks of which he is aware, and an investor is one who runs risks of which he is unaware.”
– John Maynard Keynes

“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”
– Ray Dalio,...

How to Drink from a Firehose

Thoughts from the Frontline

May 14, 2017

Basic economics tells us all resources are scarce, but our demand for them is not. Hence we need methods to allocate the limited supply of each resource. A significant part of economics is the study of those methods.

The Deck Is Stacked

Outside the Box

May 10, 2017

“The individual investor should act consistently as an investor and not as a speculator.”
– Ben Graham

Ben’s admonition is always true, but it’s more true at some times than others. It’s very true today, as investors go on riding the Balloon of No Hard Landings into the stratosphere, clinking their champagne glasses and avoiding looks down over the side of the basket as terra firma recedes ever further. My friend Michael Lebowitz of 720Global has already parachuted out of the balloon, and in...

Angst in America, Part 7: The Angst of the Millennial Generation

Thoughts from the Frontline

May 7, 2017

“Being young and having no job remains stubbornly common. Wages for young people fortunate enough to get a job have gone down. Inflation-adjusted wages for young high school graduates were 11 percent higher in 2000 than they were more than a decade later, and inflation-adjusted wages of young college graduates (four years only) have fallen by more than 5 percent. Unemployment rates for young college graduates have been running for years now in the neighborhood of 10 percent and underemployment...

When Robots Take All of Our Jobs, Remember the Luddites

Outside the Box

May 3, 2017

If you don’t think the transformation we’re embarked upon is a profound one, consider this: Within two decades, half the jobs in this country may be performed by robots. What then of our unemployment rate and social safety net? Opinion is divided: Will the next technological wave further skew the wealth distribution toward the uber-rich, or will it ultimately create more entrepreneurial and job opportunities than it destroys?

There is an interesting historical precedent for our situation, an...

Angst in America, Part 6: Middle Class Blues

Thoughts from the Frontline

April 30, 2017

“We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared; for, after all, we have nothing to lose.”

– George Orwell

“A strong, educated middle class is what made America the greatest country in the world.”

– Lincoln Chafee