Weekly Economic Updates

In many ways, the hardest decision investors have to make is whether (or when) to sell a stock, especially if it is sold at a loss. After all, selling at a loss means admitting that you made a mistake. In… Read More

After declining on seven of 2016’s first 12 trading days, the S&P 500 Index closed Wednesday down a little more than 9% year-to-date and almost 13% from its all-time high last May. (It was down nearly 15% from its record… Read More

If you are a parent, it is likely that you have told your children that “patience is a virtue.” It is quite possible that you have reminded yourself of the merits to practice the art of patience when you are… Read More

Up until about two weeks ago, the S&P 500 Index had traded in a relatively narrow range for all of 2015. In fact, the first day that the S&P closed more than 4% above or below the level at which… Read More

Typically when the economy expands, there is a sharp upswing in corporate investment in new machines, factories and technologies. With the current expansion proceeding at a more measured pace, capital spending has not boomed. Economists and policy makers around the… Read More

Last week’s market performance was tough on investors. On Friday, the S&P 500 stock index fell 3.2% completing the market’s worst week since 2011. That put the market roughly 7.5% below its recent peak on May 21. It was also… Read More

Last week China decided to devalue its currency in an effort to boost its economy. We do not often write about the latest economic or market news because we find it too hard to predict with any degree of certainty what… Read More

In July and August of each year, most public companies report their second-quarter earnings. If you read or listen to media reports discussing the quarter’s results, you will likely find commentary discussing whether or not results exceeded analyst consensus estimates…. Read More

The number of publicly listed companies trading on U.S. exchanges has fallen by nearly half from its 1996 peak. In fact, since then, it has fallen in every year except 2014.   In May, Craig Doidge, G. Andrew Karolyi and… Read More

How much time should investors allocate to trying to answers questions such as these? Where is the market headed? What action will the Fed take next? When will interest rates change and by how much? Will the US dollar continue… Read More

Companies continue to allocate significant amounts of capital to share repurchases and dividends. This trend has largely been in place since 2009’s third quarter. More recently, companies have significantly ramped up merger and acquisition activity as well. Source: Standard &… Read More

Year-to-date the market, as measured by the S&P 500 Index, has been relatively calm.  So far, the index has yet to fall more than 3.2% or rise more than 3.5%. In fact, this is only the fourth year – the… Read More

Fundamentals-based investment research can be fun. It involves constant learning. Serious investors can gain insights into many different businesses and evaluate their potential long-term outlook. Investment research can help you understand the latest innovations in fields such as technology and… Read More

As many investors know U.S. gross domestic product (GDP) declined in the first quarter. That marked the third quarter in which the economy contracted since the current recovery commenced. This year’s decline has been attributed to a number of one-time… Read More

The pay earned by corporate executives has risen rapidly in the last 25 years. According to data provided by Bloomberg, GoPro founder Nicholas Woodman, who earned $285.3 million last year, is currently the top paid executive. (In the chart that… Read More

In the 1970s, Burger King ran Whopper commercials using the tag line “Have it Your Way” https://www.youtube.com/watch?v=KJXzkUH72cY. When it comes to reporting earnings, many companies take the opposite approach, by presenting earnings “Their Way.” This earnings presentation has also been… Read More

Do you pay for everything you buy with cash, check or traditional credit card? While the vast majority of retail transactions are still conducted via such traditional means, we look to be in the early days of a change in… Read More

When oil prices tumbled from their heights of last July (~$108 per barrel) to their lows in March (~$43), one of the most common refrains was that lower gasoline costs would function as a “tax cut for the consumer” that… Read More

One of the biggest advantages of value investing is that it essentially takes away the need to make predictions about what will happen in the future. When pricing assets, value investors determine value based on data from the present. On… Read More

Last Wednesday, we learned that the U.S. economy grew at a relatively anemic 0.2% annualized rate in the first quarter. This was a sharp decline from the prior quarter when gross domestic product (GDP) grew by 2.2%. It was the… Read More

After closing at a record high more than 50 times in 2014, the S&P 500 Index has closed at a new high only six times so far in 2015 – this past Friday was the sixth. In fact, in 2015,… Read More

For at least several decades, Wall Street has been obsessed with the actions of the Federal Reserve. Market followers with shorter memories are at least aware of the Fed’s extraordinarily accommodative monetary policy in the six years since the 2008/2009… Read More

Gasoline prices have fallen considerably from their year-ago levels. Against this backdrop, consumer spending continues to disappoint. It seems households are choosing to save the amounts they are saving at the pump instead of spending it on goods and services…. Read More

According to FactSet Research, at January’s end, cash and short-term investments held on the balance sheets of companies in the S&P 500 (ex-Financials) settled at a record-high balance of $1.43 trillion (blue bars in chart). The prior record, which was… Read More

On Wednesday, Fed policy makers dropped the word “patient” from their official statement on monetary policy. For months, many members of the financial media have been fixated on when the word “patient” would be removed from the Fed’s statement. On… Read More

Despite the market’s uneven performance so far this year, corporations continue to aggressively repurchase stock. According to preliminary data from S&P Dow Jones Indexes, in 2014 U.S. multinationals spent $553 billion on buybacks and another $350 billion on dividends. This… Read More

Last Wednesday’s statement by the Federal Reserve did not include any changes to monetary policy. In fact, there was little in the Fed’s statement that surprised investors. The Fed maintained its language that it “can be patient in beginning to… Read More

Last Thursday, the European Central Bank (ECB) finally launched its bid to revitalize the eurozone’s economy and counter the threat of deflation with a €60 billion-a-month bond-buying program that was far bigger than investors anticipated. ECB president Mario Draghi said… Read More

From time to time, there are headlines saying long-term investing is “dead.” The evidence from major stock exchanges highlights that the thinking of investors has become more short term over time, at least based on the average holding period of… Read More

As discussed last week, we believe greater uncertainty about interest rates will cause market volatility to increase. While greater market fluctuation can be unsettling at times, it is important to remember that sell-offs do happen. Sometimes they can be quite… Read More

As we enter the start of another year, it is relatively easy to come across 2015 market forecasts when perusing the financial news. Recently, we expressed our disdain for sales forecasts for the holiday season. In general, we are skeptical… Read More

In its December policy statement released this past Wednesday, the Fed changed the wording about when it might start to raise interest rates. It dropped the “considerable time” reference and substituted wording that it could be “patient in the beginning… Read More

It seems hard to believe, but the traditional holiday season is already more than half over. As always, there have been numerous forecasts about how retailers will fair during the holiday season. The most commonly cited estimate is put forth… Read More

Long-time followers of the oil markets, who are honest with themselves, should readily admit how hard it is to forecast oil prices. Many unpredictable factors can impact oil prices (e.g., geopolitics, foreign currency risk – oil is only priced in… Read More

For those that invest with a value-based perspective, seeing the share price of a potential investment fall is typically thought of as an opportunity. This view aligns with the concept of mean reversion, which in investing, basically says that periods… Read More

In our view, allocating capital is one of management’s most important responsibilities. There are several ways management can allocate the capital a company generates, including mergers and acquisitions (M&A), capital expenditures (money allocated by a business or organization for the… Read More

On Wednesday, the Fed ended the third round of Quantitative Easing (QE3). At its inception in September 2012, many were critical of the policy, fearing it would lead to higher inflation and a weaker dollar. As can be seen from… Read More

For the week ended October 18, initial claims for unemployment benefits increased by 17,000 to a seasonally adjusted 283,000. The four-week average for initial claims, which smooths out week-to-week volatility, fell 3,000 to 281,000, its lowest level since May 2000…. Read More

Technology in the world around us is changing incrementally every day. These changes are much more noticeable when you look over long periods. In some ways, developing nations (for example, China, Brazil) have a significant opportunity relative to the developed… Read More

Even after delivering strong gains on Friday, the S&P 500 Index and the Dow Jones Industrial Average are both down roughly 2% from their recent record highs. In general terms, a 2% market decline is somewhat commonplace, meaning it is… Read More

Diversified investment portfolios should include an allocation to international assets. The goal is to improve the portfolio’s long-term, “risk-adjusted” returns, or, put more simply, to avoid putting all your eggs in one basket. However, economic and market cycles can and… Read More