Weekly Economic Updates

Companies often go to great lengths to reduce their tax bills. They may transfer activities and/or tangible or intangible property to countries with lower tax rates. They may also maintain a legal structure that can minimize taxes and facilitate the… Read More

Those investors who take a buy-and-hold (or more appropriately buy-and-watch rather than buy-and-forget) approach to investing should be more interested in a company’s long-range outlook and be less concerned about its near-term performance. In order for companies to deliver the… Read More

A recent search for a stock paying a solid dividend that could be added to client portfolios led us to take Tupperware Brands Corporation (TUP) through our investment process. As depicted below, the shares have underperformed over the past year…. Read More

A meaningful shift in the retail banking industry is underway. It is being driven by millennials (individuals reaching young adulthood around the year 2000) and mobile-savvy consumers. These individuals are shunning retail branches. The amount of banking activity that is… Read More

We noted in a recent Weekly Economic Update that we expected market volatility to increase. It has certainly done so. Some of the primary factors we believe are behind the increased volatility are growing uncertainty about US monetary policy, somewhat… Read More

Last week, the S&P 500 Index reached yet another all-time high. The S&P 500 has moved about 9% higher year-to-date and is up roughly 17% over the last 12 months. The Nasdaq has outperformed the S&P 500 over both periods…. Read More

Deciding how to allocate capital is one of management’s most important responsibilities. Such decisions impact not only the company’s short- and long-term performance, but the overall economy as well. Share buybacks, a topic we have discussed several times in the… Read More

Corporations engage in mergers and acquisitions for a multitude of reasons, including synergy, product line expansion and greater geographic reach. Recently, tax-motivated deals related to freeing up trapped cash and/or corporate inversions have become more newsworthy. Corporate Tax Rates The top US… Read More

While the economy has certainly strengthened over the past few years, business spending on capital equipment has lagged. After peaking in 3Q11, the year-over-year growth rate fell for five out of six quarters. There was a slight rise in 2013’s… Read More

In her Friday speech from the Fed’s meeting in Jackson Hole, Wyoming, Janet Yellen remained non-committal on when the Fed would start raising interest rates. Recent data indicates the economy continues to improve (albeit slowly). However, the Fed chairwoman remains… Read More

The importance of the Internet of Things (IoT) in our everyday lives is increasing. It seems that every day more and more devices and even appliances are connecting to the Internet. Devices ranging from door locks to toll booths to… Read More

Accumulating cash overseas is one way in which U.S.-based corporations can keep their tax bills lower. Since 2008, the low interest-rate environment has made it easier for companies to buy back stock, pay dividends and make acquisitions without needing to use… Read More

On July 31, stocks suffered one of their worst single day losses of the year. All three major indexes fell, led by the NASDAQ: Dow: 16,563.30, -317.1, (-1.9%) S&P 500: 1,930.67, -39.4, (-2%) NASDAQ: 4,369.77, -93.2, (-2.1%) The weak performance meant that stocks declined… Read More

One of the biggest drivers of projections for future Federal Government budget deficits is healthcare spending. Baby boomers have already started to retire. The group is expected to add considerably to the number of people on the Medicare and Medicaid… Read More

If you watch financial television, or read the latest financial news, you’ve likely been inundated with stories about the potential market implications of recent geopolitical events. On Thursday, a Malaysian jetliner went down in the Ukraine. This was just the… Read More

The ongoing low interest rate environment continues to encourage companies to repurchase their own shares. In fact, in 2014’s first three months (1Q14) companies included in the S&P 500 bought $159 billion of stock. This was the second highest total… Read More

We all would like to believe that we carefully gather and evaluate facts and data (both positive and negative) before making an important decision. This can be much harder to do in practice than we think. We all have a… Read More

In investing, it can be difficult to distinguish between investing and speculating. Both investors and speculators aim to make a profit by putting money to work in the financial markets. In the seminal work Security Analysis (1934), legendary value investor… Read More

Corporate transactions with the purpose – at least in part – to lower U.S. corporate taxes have been on the rise. The latest announcement came on June 15, as Medtronic Inc. announced plans to acquire Covidien, PLC. Under the deal’s… Read More

Historically, when it comes to generating long-term gains, refining has been one of the energy sector’s least profitable industries for investors. At its most basic level, refining involves boiling crude oil in order to produce petroleum products such as gasoline,… Read More

While this week’s report shows continued improvement in the job’s data, the types of jobs that people are securing is changing. In May, the U.S. finally recovered all the jobs that were lost since the recession that commenced in late… Read More

The combination of a sluggish economy and its related impact on individuals is hurting the housing market. The ability of individuals, particularly millennials, to buy homes has been limited by such factors as lack of earnings, less-than-perfect credit and over… Read More

The gap between what CEOs earn and what average employees take home has expanded significantly over the last several decades. Changes that would place some limitations on executive compensation would be welcome by most. However, implementing such changes may be… Read More

If one only looks at the overall year-to-date change in the S&P 500 Index (+1.2%), he or she might think there has not been much change to the broader market landscape. However, by digging deeper, one will note changes in… Read More

A well-known trading adage warns investors to “Sell in May and Go Away.” In other words, sell their stock holdings in May and reenter the equity market in November. This strategy allows the investor to avoid the typically volatile May-October… Read More

Last week was a busy week in terms of economic data releases, which collectively suggest that in spite of a difficult first quarter, economic growth is continuing at a moderate pace. The initial estimate for Q1 of 2014 US GDP… Read More

In investing, financial engineering refers to using mathematical principles to present a higher level of earnings. In the current low-growth environment, share repurchase is one of the most common financial engineering strategies employed by firms. The stock market continues to… Read More

Investment in new facilities and equipment during this economic recovery has been well below the historical average. The French bank Société Générale noted in a recent report that today’s capital stock is older than at any point since 1964. Among… Read More

After closing lower on Friday, the S&P 500 is now down year-to-date by a little less than 1%. Despite the decline, the index is only about 4% below the all-time highs it reached in March. While the fall has not… Read More

In any market environment, it is important to understand the risks and the potential downside associated with a particular security. When the market moves higher for a sustained period, such risks increase. Under these conditions, it is more important than… Read More

Last Wednesday was Janet Yellen’s first press conference as the Federal Reserve’s chairwoman. She commented on the “considerable period” language in the Fed’s monetary policy statement, which refers to the length of time between when the Fed will end Quantitative… Read More

According to research by Bloomberg, the largest U.S.-based companies increased the amount of cash held offshore by $206 billion last year. This is cash kept in foreign countries to prevent U.S. taxation. As a result, these multinational companies have now… Read More

Most investors are focused on outcome rather than process. They judge success on whether or not the value of an investment increases. While we all want to see positive returns from our investments, following a consistent process offers the best… Read More

The current economic recovery is often referred to as the jobless recovery. Although the unemployment rate has fallen from 10% to 6.6% over the last four years, the related data also shows that many Americans have stopped looking for work… Read More

The harsh weather we have been experiencing this winter has in many cases tempered the rosier view of the economy that most had as we entered 2014. It seems the debate among market economists is what impact this winter’s lousy… Read More

At its core, fundamental-based investing is an intellectual exercise. It involves performing research and analyzing financial and environmental data about companies and the industries in which they participate. But, we are only human, and there are many behavioral biases that… Read More

On Friday, the Labor Department reported that U.S. payrolls rose a seasonally adjusted 113,000 in January, falling well short of expectations. January also marked the second consecutive disappointing jobs report – only 75,000 jobs were added in December. This data… Read More

After delivering robust returns in 2013, stocks are off to a much rockier start in 2014. Friday’s decline capped the biggest monthly selloff in stocks in more than a year. The Dow dropped 149.76 points (0.9%) and closed at its… Read More

Over the last two years, shareholder activism has been on the rise. This is not unexpected as the market has delivered strong gains. On average, activists are good for current shareholders as their involvement usually leads to a higher share… Read More

Will corporate profit margins continue to set new highs, will they remain above long-term averages, will they revert to the long-term norm, or will they fall even lower? For some time, experts covering the markets and the economy have been… Read More

December’s job report, which was released on Friday, fell well short of expectations. Businesses added only 74,000 jobs during the month, well short of expectations of nearly 200,000. The weak result was far short of many other reports about job… Read More

In 2013, it was a great year to be invested in stocks. The S&P 500 surged more than 30%, closing at 1,848.36, representing the index’s best year since 1997. These robust gains were achieved in a year where earnings rose… Read More

As 2013 comes to a close, the S&P 500 is trading near its all-time highs amidst a five-year rally.  The economic backdrop heading into the New Year is constructive enough for cautious optimism.  Economic trends continue to suggest modest improvements… Read More

Wednesday, the Fed announced that it would start tapering its asset purchases. Initially, the stock market fell on the news of the $10 billion tapering; however, it quickly reversed course and the DOW and S&P 500 both closed at all-time… Read More

Last week, there were some signs of at least a temporary reprieve to the political gridlock in Washington, as the House passed a Budget agreement. One can only hope this is a sign of some changes to the political landscape,… Read More

On Friday, it was reported that non-farm payrolls increased by 203,000 in November, ahead of expectations that 185,000 jobs would be added. The unemployment rate fell to 7.0%, its lowest level since November 2008. The November result was roughly in-line… Read More

Black Friday, or the day after Thanksgiving, marks the official start of the holiday shopping season. This year, the holiday season is atypically brief; in fact, it’s six days shorter than last year. In addition, Chanukah started much earlier than… Read More

There are many different types of risk involved in the portfolio management process. From an overall perspective, we must always take into account the risk of loss. Seth Klarman, who has one of the investment industry’s most enviable track records,… Read More