Economic Analysis

The End of Disinflation

Thoughts from the Frontline

May 17, 2002

I must confess I like to work jigsaw puzzles. If you have ever worked on one, you know there are times when the pieces come together, and you can begin to see a major part of the puzzle. There is a certain sense of satisfaction when that happens.

The Meaning of “Excess”

Thoughts from the Frontline

May 10, 2002

Over the past few months, I have commented about how large corporations are using their company pension funds to bolster their corporate earnings. Under accounting rules, if a pension fund has "excess" funding, the excess can go to the bottom line of the corporation. Nothing particularly wrong with that, except the meaning of the word "excess" is as loose as Bill Clinton's definition of "is." Today we will visit an amazing statistic that clearly shows just how deceitful, large and widespread...

Risk Premiums Get Scary

Thoughts from the Frontline

May 3, 2002

What a week. A whirlwind tour through Southern California visiting clients has left me quite tired, but driving through ridiculous freeway traffic has given me a lot of thinking time. I needed it, as I have been meditating in the implications of a very important new article in the AIMR Financial Analysts Journal. It is a lengthy and devastating analysis of what investors should expect by way of returns in the stock market over the next decade or so. I will do my best to give you the...

Why Investors Succeed

Thoughts from the Frontline

April 26, 2002

As I leave the country today, headed for Mexico's beaches, I can't help but notice the stock market seems to be stuck in neutral, where it has been since the first of the year. So far, at least, my Muddle Through Market prediction at the beginning of the year seems to be the right one.

House of Credit Cards

Thoughts from the Frontline

April 19, 2002

Today, we will look at a company that will pay you 8.7% a year because you are getting older. Yes, my Maine Source for value investing has come up with a gem for this month's value stock.

Analyse This, Merrill

Thoughts from the Frontline

April 12, 2002

Life in the Muddle Through Economy goes on. With all of the sturm and drang going on in the markets, most stock indexes are not too far from where they were at the beginning of the year, except for the NASDAQ, which has been far from reality for a long time.

Of Deficit and Dollar Directions

Thoughts from the Frontline

April 5, 2002

Two summers ago, I went on an Alaskan Cruise with #2 daughter. One of the highlights was flying by helicopter to several glaciers. Seeing the huge valleys these glaciers had dug into the bare rock of massive mountains was impressive.

Why Investors Fail

Thoughts from the Frontline

March 28, 2002

Like all the children from Lake Wobegon, I am sure all my readers are above average investors. But I am also sure you have friends who are not, so today we will look at the reasons why they fail at investing. Maybe this week's e-letter will give you some ways to help them. And as we conclude, I will show you a simple way to put yourself in the top 20% of investors. This should make it easier to go to family reunions and listen to your brother-in-law's stories.

Inflation Rhythms

Thoughts from the Frontline

March 22, 2002

"History does not repeat itself," said Mark Twain, "It rhymes." That observation has a great deal of truth in it. Lately, however, economic history has been more like the cacophonous poetry of the Beatnik generation than the smooth resonating sounds of classic iambic pentameter.

King Dollar and the Guillotine

Thoughts from the Frontline

March 15, 2002

Today we are going to get practical. I will show you where to double your money market returns with government guarantees. We will look at one of my favorite US banks which is paying up to 7.75% for three-month CDs. (And yes, of course there's a story behind that number.) As promised for weeks, we are finally going to look at the prospects for King Dollar to remain on the throne.