Thoughts From the Frontline, April 2003

Investing: Faith Versus History

April 25, 2003

This week we briefly look at a few choice economic insights, and then I once again will close with a portion of my book-in-progress about how to successfully invest in secular bear markets. Despite some non-writing business issues which are eating up a lot of work time, I am making good progress (finally) on the book, which I hope to have finished in less than a month and with some hard work on the part of my publisher available in bookstores and over the internet this summer. My intention was...

Understanding Stock Market Behavior

April 17, 2003

This week we will look at why and when stock markets go up and down over long periods of times, and how to use that knowledge to your advantage. We will examine how to find the next "New, New Thing" as we look at something called the Innovation Cycle.

I must confess that this week's letter is actually a chapter in my book-in-progress. It does contain some material from a letter I wrote a year or so ago, but I have added and edited it considerably. While it is a little longer than most weekly...

After Iraq: the Real World of Earnings

April 11, 2003

I wrote about a study last year that suggested corporate earnings in the US could not grow by more than the growth of GDP.

"Our median estimate of the growth rate of operating performance corresponds closely to the growth rate of gross domestic product over the sample period ....the growth in real income before extraordinary items is roughly 3.5% per year" (after inflation and dividends. Before them it is about 10%.) "This is consistent with the historical growth rate in real gross domestic...

The Plunge Protection Team

April 4, 2003

I have had so many letters of late asking me what I think of and/or know about the existent of the so-called Plunge Protection Team, that mysterious group of government officials who secretly prop up the stock market when it drops too much, that I am going to jump in where wiser minds would just leave the subject alone. It will offer a good opportunity for you to understand concepts of arbitrage and how the markets really work. Plus, if you can prove me wrong, I will show you how to get a quick...