Outside the Box, November 2004


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$8 Trillion and Counting

November 29, 2004

As long time readers know, I get a lot of newsletters sent to me from around the world. Many are from private sources. Among the best is the HCM Market Letter written by Michael Lewitt of Harch Capital in Florida. Michael is one smart guy with a deep understanding of the markets, especially the credit markets, and how they work. The firm manages domestic and offshore debt and equity hedge funds and separate accounts. I really look forward each month to getting Michael's insights. For this...

The Dollar Is In Trouble

November 22, 2004

This week we have a special double treat for Outside the Box. Peter Bernstein, the venerable editor of Economics and Portfolio Strategy, has sent two pieces our way. The first is a brief treatise on the dollar which appeared in the Financial Times the day before Greenspan's speech last Friday. It clearly points out the issues facing the dollar and the world if there is a lack of cooperation among nations. In fact, even with full cooperation, there could be quite stormy periods.

The second piece...

Life After Gold

November 16, 2004

This week's letter is part two of a series by my good friend, Andy Kessler, author of Running Money about his days running a hedge fund in the 1990's, a book that I highly recommend, especially to anyone in the "running money" business. (www.amazon.com)

Last week we ran the first part of the two part series on Andy's view of gold. The first part laid the groundwork by looking at the role of gold, currency and inflation in 18th and 19th century England. Kessler argues that, as a side product of...

Gold Bites the Dust

November 8, 2004

Confirmation bias is a very real psychological phenomenon. It especially infects investors. What we mean by confirmation bias is the tendency of people to read material which reinforces their present views. They associate with people who agree with them and who think like them. So their biases are constantly confirmed.

The antidote is to read material, and associate with people, that/who do not agree with your views. It is more important (and profitable) to learn why you are wrong than to hear...

Wealth Illusion

November 1, 2004

This week's letter is from another one of the country's top economic analysts, Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.

Prior to joining The Northern Trust in 1986, Mr. Kasriel was an officer in the economic research department of the...