Economic Analysis

The Influence of Affluence

Outside the Box

April 12, 2017

My friend Marc Faber, publisher of the Gloom Boom & Doom Report, has never shied away from sensitive issues; and in today’s Outside the Box he tackles a big one: the relationship between asset prices and US household wealth, and the effect of that relationship on the economy.

Nominal US household wealth is at an all-time high but, says Marc, that’s mostly an illusion. The wealth of the top 0.1% has vastly improved in recent decades (and the top 10% haven’t done at all badly), but “the median...

Stock Market Valuations and Hamburgers

Thoughts from the Frontline

April 9, 2017

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying -- – except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

– Warren Buffett, Fortune magazine: “The Wit and Wisdom of Warren Buffett”...


Outside the Box

April 5, 2017

I've read the piece that is today’s Outside the Box multiple times over the past several weeks. It’s theoretically about the music business, but it’s actually about everything. I’ve been finding it helpful as I think about my own business, and you may, too.

One major takeaway (and this is one that most of us have always known but can stand to be reminded of from time to time):

We all need to hear it from our friends. Who we might know in person or might just know online. It's about trusted...

Angst in America, Part 3: Retiring Broke

Thoughts from the Frontline

April 2, 2017

“The trouble with retirement is you never get a day off.”

– Abe Lemons

“Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples.”

– George Burns

“To be, or not to be, that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take Arms against a Sea of troubles,
And by opposing end them.”

– Shakespeare, Hamlet

Raoul Pal, Paying Attention

Outside the Box

March 29, 2017

When my friend Raoul Pal – mastermind of Global Macro Investor and partners with Grant Williams in Real Vision TV – has something to say, my ears perk up. And when he leads off a piece this way, I am ALL ears:

I’m going to blow your mind with this following article. My mind is still reeling from my discovery and from writing this piece.

Turns out he’s talking about India, and more specifically, about recent advances in that nation’s technological infrastructure.

(I)t is very rare indeed that...

Angst in America, Part 2: Men Without Work

Thoughts from the Frontline

March 28, 2017

I have been promising a review of Nicholas Eberstadt’s very important book, Men Without Work: America’s Invisible Crisis. The book is relatively short at 216 pages, but it is packed with meaty facts and insights. One of the reasons I seldom read an actual physical book anymore is because I can highlight text and make notes in my Kindle app on my iPad and then find those notes and highlighted sections on my Amazon page for later review. I actually highlighted 36 pages with 22,000 words from this...

Why Facts Don’t Change Our Minds

Outside the Box

March 22, 2017

You and I are both rational beings who let facts drive our thinking, but it seems our fellow humans are not so thoughtful. Or at least that’s what the research says. It turns out that behavioral psychologists have been undermining the bastions of human reasonability for decades, starting with some nefarious characters in the Stanford University psych department back in the ’70s, whose devilishly clever experiments were then taken a frightening step further at that equally suspect institution...

Angst in America, Part 1: Aimless Men

Thoughts from the Frontline

March 19, 2017

“America was not built on fear. America was built on courage, on imagination and an unbeatable determination to do the job at hand.”

– Harry S. Truman

“Unemployment is a weapon of mass destruction.”

– Dennis Kucinich

“Ever since 2000, basic indicators have offered oddly inconsistent readings on America’s economic performance and prospects. It is curious and highly uncharacteristic to find such measures so very far out of alignment with one another. We are witnessing an ominous and growing...

Is Mr. Market Playing the Role of Pavlov’s Dog?

Outside the Box

March 15, 2017

David Rosenberg is one of the most respected voices in the investing world. His Breakfast with Dave goes out to thousands of appreciative subscribers nearly every business morning. He has also been the leadoff hitter at my Strategic Investment Conference every year for several years running – and this year will be no exception. He is always one of our top-rated speakers, and his energy gets the conference up and rolling.

To everyone’s surprise, Rosie turned bullish in a big way at SIC six...

Tax Reform: The Good, the Bad, and the Really Ugly—Part Five

Thoughts from the Frontline

March 7, 2017

“A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform”

– Russell B. Long

“Corporate tax reform is nice in theory but tough in practice.”

– Andrew Ross Sorkin

“I hold it that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical. Unsuccessful rebellions, indeed, generally establish the encroachments on the rights of the people, which have produced them. An observation of this truth should...