The True Sport of MAGA

One of the more extraordinary things that investors have seen in living memory is unfolding at this precise moment.  This goes for business leaders, money managers, veteran Wall Streeters, value investors, 401(k) holders, momentum traders, FX guys, gold bugs, technical gurus, chartists, pork belly speculators, quants, astrologists, Larry Summers, put option sellers, dweebs and geeks, millennial index fund enthusiasts, and everyone in between.

They’re all craning their necks in unison.  They can hardly believe their eyes.  Up on the world stage, and on a daily basis, President Donald Trump chest bumps international leaders with wanton abandon.

Donald Tusk, Justin Trudeau, Xi Jinping, Angela Merkel, and even the new leftist Mexican victor, Juan Trump, have President Trump posturing towards them as if they’re facing off at a weigh in for a heavyweight fight.  The sight is absolutely ludicrous, if one is in the mood for a reality TV show – or a practical joke. Continue reading

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Trouble in Paradise

Uncompromising independence, rugged individualism, and limitless personal freedom were once essential to the American character.  According to popular American folklore, they still are.  We have some reservations.

The principles that gave rise to the American character died long ago.  Freedom.  Liberty.  Independence.  Limited representative government.  Sound money.  Private property rights.  A humble and esteemable populace.  Avoidance of foreign entanglements.  Rafting down the Mississippi River.  Trim waist lines.

These concepts, in reality, faded away from daily life over the last century like stars in the morning light.  Nonetheless, a merry mob reaches for their lost American character as they head to the shore each July 4th to celebrate Independence.  These freedom lovers – descendants of none less than Davy Crockett, and users of gender neutral bathrooms – eat hotdogs and revel in their ideals of an America that no longer exists.  Their zeal is impressive. Continue reading

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Confronting the Dragon with Peter Navarro

A young man might go to business school believing he’s obtaining some sort of academic training that will enable him to make a comfortable living.  His degree may gain him entry into a large corporation, where he can work his way up to a good income.  This may even put him on the fast track to what he envisions as success.

But his academic training won’t likely be of any real use.  He won’t be prepared to create new products or deliver new services or technologies.  He won’t possess a special knowledge that will improve the wellbeing or satisfaction of others.  He won’t have the skills to bring in new business or grow the bottom line.

Rather, his academic training will have prepared him to use spreadsheet entries to forecast quarterly revenue and margin targets.  What’s more, if the numbers show a disagreeable trajectory, he won’t have the skills or slightest inkling as to what to do about it.  He’ll merely ride the wave down until it crashes on the rocky reef.

But if he’s in a position of leadership, he’ll likely panic.  Out of his element, he’ll chase one idiotic solution after another.  He’ll package up and sell off a segment of the business.  He’ll invest in a new company branding initiative or fancy computer based system tools. Continue reading

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A Walk on the Wild Side

“Never play cards with a man called Doc.  Never eat at a place called Mom’s.  Never sleep with a woman whose troubles are worse than your own.” – Nelson Algren, A Walk on the Wild Side

Fresh Fruit or Rotting Vegetables?

A subtle gas seems to always be vented into the atmosphere at the sunset of an extended bull market.  As the light fades, an odor that’s indiscernible from that of fresh fruit or rotting vegetables wafts down Wall Street.  You can almost smell it.  But what it is you smell is too faint to accurately characterize.

The Dow Jones Industrial Average (DJIA) closed at a record high of 26,616 on January 26 – nearly five months ago.  Since then it has swooned and spiked with uncertain direction.  Buying the dip at this juncture may not work out in your favor.

When the stock market peaked out in mid-2007, in the early days leading up to the 2008-09 crash, some of Wall Street’s best and brightest mistook the smell of the moderate initial decline for that of fresh fruit.  They bought the dip.  At the time, however, it was still unclear what the source of the subtle odor was.  Was it really fresh fruit?  Or was it actually rotting vegetables? Continue reading

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