Finding Opportunities in a Bear Market

Posted on May 13, 2022 by MN Gordon

“I can calculate the motion of heavenly bodies, but not the madness of people.”

The remark was made by Sir Isaac Newton in 1720 upon losing £20,000 – a substantial sum at the time – speculating on South Sea Company stock.

The madness of people, as Newton painfully found, is incalculable.  It defies logic.  Runs on emotion.  And is best observed from a safe distance.

Newton may have been a brilliant mathematician and physicist.  But he was still an animal, just like the rest of us.  When it came to matters of money his actions were not governed by logic and calculation.  They were governed by fear and greed.

The madness of people – or crowds – may not be calculable.  However, it is most certainly measurable and observable…especially in the hindsight view of a stock price chart.

The South Sea bubble of 1720, like all good bubbles, was a fabrication of government.  Where an act of British parliament granted the South Sea Company a monopoly on new world trade so that, in return, it could finance the national debt…and at low interest rates to boot. Continue reading →

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Settling Wreckage from the Past

Posted on May 6, 2022 by MN Gordon

Settling wreckage from the past with realities of the present can be difficult and painful.  If you do the crime.  You must do the time.

When it comes to financial markets and the economy, this can take many forms.  Some of the most common include bankruptcy, shuttered businesses, and collapsing share prices.

This week Federal Reserve Chair Jay Powell and his cohorts at the Federal Open Market Committee Meeting (FOMC) raised the federal funds rate 50 basis points.  This marked the first 50 basis point rate hike since 2000.  It is part of the Fed’s initial efforts to settle up on wreckage from the past.

The world has changed markedly over the last 22 years.  Certainly, the economy and financial markets have become twisted and warped.  Without the proper perspective everything from the price of a gallon of gas to the price of a house is muddled and confused. Continue reading →

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The Ugly Transformation of Netflix

Posted on April 29, 2022 by MN Gordon

Human progress and upset, both real and imagined, is a wide ranging subject.  It can logically weave from discussions of indoor plumbing, agronomy and penicillin to thermonuclear weapons, corporate welfare and the ever present consequences of artificially low interest rates.

One of the great advancements of the early 21st century was the dawn of digital streaming.  Humans, with nothing better to do, could now scroll through a library of digital media and instantly stream it to a television or handheld tablet.  The sport of binge watching was born.

Cable TV was now an expensive dinosaur.  Many budget-conscious consumers cut the cord.  Maybe you did too.  The rationale was simple enough…

Consumers were granted a mobile, handheld idiot box.  For a fraction of the cost, you could watch programs whenever and wherever you wanted.

The ability to stream a movie to your phone while riding the train to work was simultaneously a mind blower and a life changer.  Surly a zenith of civilization had been reached. Continue reading →

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Feeding LA’s Homeless Industrial Complex

Posted on April 22, 2022 by MN Gordon

Election season 2022 is in full bloom.  Activists, with clipboards and ballot initiatives, are abundantly flowering outside supermarkets.  They want signatures – your signature – in support of new legislation that would increase funding for various whacky and zany ideas.

In California, and particularly in Los Angeles, initiatives that would fire off more dollars to combat the abundance of shanty favelas blighting urban areas are flourishing.  The rationale is compelling…

As of 2020, there were over 161,000 homeless people in California.  In Los Angeles County alone, the homeless population, as of 2020, was precisely 66,463.  Both those counts are now likely much higher.

Who doesn’t want to do something about the profusion of tented bivouacs, barrel fires, medieval disease, human excrement, public drug use, crime, and mental illness that is running rampant across the southland?

Surely something must be done.  But what? Continue reading →

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