David MoonBlog

When a photo of an actor from the old Cosby Show (a show that is, disturbingly, still on the air) bagging groceries in a New Jersey supermarket began floating around the web recently, I was reminded of recent research suggesting that increases in happiness can be caused by increases in wealth. For years, researchers have studied the relationship between financial and emotional well-being. Is happiness a mindset to be cultivated or a condition that money can suddenly impose? While a number of studies found a positive correlation between income/wealth and reported happiness, none had concluded if there was a causal … Read More

Battle for the Sole of America

David MoonBlog

In 2017, Nike announced a corporate realignment that included a focus on customers in 12 key cities: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan. In a June 2017 press release, the company said it expects these cities to produce 80% of Nike’s growth through 2020. My rural hometown of Hazel Green, Alabama, where I suspect kneeling for the national anthem is a code-red offense, did not make Nike’s city-focus list. In a brilliant marketing move, Nike’s latest ad campaign received hundreds of millions of dollars in free publicity, offending people who, … Read More

Rule reversal reveals broker incentives

David MoonBlog

With layers of obfuscated fees, needlessly complex products, self-dealing and other conflicts of interest, the investment industry goes to great lengths to make it difficult for investors to meaningfully understand the relationship between themselves, their adviser and their money. As a result, it is often difficult to readily determine if an adviser is working to maximize his wealth or that of his client. One behemoth Wall Street firm recently revealed much of the industry’s priorities when it reversed a 23-month old policy prohibiting charging commissions in retirement accounts. In anticipation of a Department of Labor (DOL) regulation that would require … Read More

NCAA is immoral

David MoonBlog

Thirteen University of North Carolina football players were suspended from the team’s season opener for the unpardonable NCAA sin of selling shoes. These special shoes were given to UNC, and then the players, as part of a $37 million dollar contract between Nike and the school. Selling shoes doesn’t harm a soul or provide UNC a competitive advantage over any of its opponents. UNC is the same institution of higher education that admitted 18 years of academic fraud among its athletes, including fake classes that required no attendance in order to receive a passing grade and maintain eligibility. The NCAA … Read More

Declinare Sirenum Scopuli

Harold Black, PhDBlog

In Greek mythology, the sirens lived on an island, Sirenum Scopuli, and lured sailors to shipwreck on its rocks with their enchanting songs. Socialism is the Sirenum Scopuli of modern civilization. It is incredible to me that socialism remains appealing to so many people, given that it has always failed miserably no matter where it has been tried. It failed the Pilgrims and almost led them to starvation. Today’s poster child is oil rich Venezuela with its despotic ruler, hyperinflation, chronic shortages and fleeing population. Socialism, where the government controls the means of production, takes away personal liberty and choices. … Read More

Banks shoot blanks at guns

David MoonBlog

A number of banks, including international behemoths Bank of America and Citigroup, have stopped providing certain services to a number of firearm-related businesses. Credit card companies are exploring ways to identify gun purchases within their payment systems, possibly a first step toward limiting such sales. One of the country’s largest online payment gateways,, has already ended its relationship with the country’s largest single gun store, Hyatt Guns in Charlotte. If you need a bank on the other side of the debate to either patronize or boycott, Wells Fargo CFO John Shrewsberry recently said that the government, not banks, should … Read More

Bond ETFs untested

David MoonBlog

Exchange Traded Funds (ETFs) holding bond portfolios have quickly become popular among individuals seeking both lower risk and fixed income, but until tested by higher interest rates, we can’t know if they will fulfill those promises. Wall Street has a long history of creating new products, touted as conservative investments, yet lacking a track record. And investors have a long history of being willing Wall Street guinea pigs. In the 2000s, something called an auction rate security was sold as a higher-yielding alternative to money market funds, that is, until the market for these supposedly safe investments completely froze in … Read More

Retiree benefits threaten state finances

David MoonBlog

Despite the stated national debt having passed the $21 trillion level, the most imminent public debt crisis is at the state level. It is a joke when governors (and gubernatorial candidates) brag about having produced balanced state budgets. Forty-nine states legally require a balanced budget. But “balanced budget” can be defined a lot of different ways, especially with respect to the fastest growing category of state debt: unfunded retiree benefits. The federal government has up to $120 trillion of unfunded liabilities (in addition to $21 trillion of official debt,) but unlike state governments, the U.S. has can borrow its way … Read More

GDP growth yields egg on face

David MoonBlog

When the Bureau of Economic Analysis (BEA) announced 4.1% second quarter Gross Domestic Product (GDP) growth, I was reminded of then-presidential candidate Jeb Bush’s 2015 claim “there is no reason in the world why we can’t grow at a rate of 4% a year.” Writing in an op-ed piece, one financial analyst was skeptical, noting that the underlying economic conditions are muted compared to the 1950s and 1960s – our last sustained period of 4%-plus growth. Going forward, slower population and workforce growth would dampen economic growth, as would declining improvements in productivity. Not only was the analyst skeptical, he … Read More

HCA, Greenlight, share buybacks

Garrett ArmsBlog

A common theme among many of our portfolio companies is that management is opportunistically allocating excess capital toward the repurchase of shares. While capital allocation one of management’s most important responsibilities, many CEOs focus solely on their operating businesses and fail to allocate capital effectively.  In our portfolio, we hold a number of companies with managements that have demonstrated a strong understanding of capital allocation.  This is not by accident; it is part of our selection process.  In the most recent quarter, Group 1 Automotive, Jefferies Group, Synchrony, and HCA all actively repurchased significant amounts of their own shares. While … Read More