Munger’s Wisdom; more local losses

David MoonBlog

On May 4, as many as 40,000 people will gather in Omaha, Nebraska to listen to Warren Buffett offer his folksy wisdom on almost any subject posed by a shareholder. Sitting next to Buffett will be his senior partner, 95-year-old Charlie Munger, Berkshire Hathaway Vice-Chairman and straight man to Buffett’s Mark Twain routine. Munger’s wit and wisdom are no less sharp than Buffett’s, but he delivers them without the simple parables, analogies and political correctness of Buffett. A month ago, Munger sat in a room with fewer than 200 people – several of them billionaire investors – to answer questions … Read More

Trump, Greenspan’s briefcase and the invisible gorilla

David MoonBlog

In 1999 Christopher Chabris and Daniel Simone showed volunteers a video of two teams, one dressed in white shirts, the other in black, passing two basketballs back-and-forth, while randomly weaving among themselves. The volunteers were asked to count the number of passes made between the players wearing white shirts. Halfway through the video, someone in a gorilla suit walks into the middle of the basketball players, pounds his chest, then saunters off screen. If you are just watching the video, the gorilla is obvious. But about half of the volunteers focused on counting passes never see the gorilla. Chabris and … Read More

Risk elimination is impossible

David MoonBlog

In writing about the dangerous conditions along parts of south Knoxville’s Chapman Highway, a commentator recently opined that “any fatal wreck is one too many.” It sounds laudable: eradicate all automobile accident deaths. The only way to do that, however, is to eliminate all automobiles. As a society, we have decided that some risks – in some degrees – are acceptable in exchange for a perceived desirable outcome. To reduce deaths caused by drunk drivers, we set limits on drivers’ allowable blood alcohol content. If a single drunk driving death is one too many, however, the limit wouldn’t be 0.08 … Read More

A Fair Share Proposal

David MoonBlog

When discussing taxes, the term “fair share” has little useful meaning other than as a subjective negative. Opining that someone doesn’t pay his fair share doesn’t tell us what a fair share is; it only tells us that, in the speaker’s opinion, someone doesn’t pay it. I recently had dinner with two college classmates and two current college students. The five of us ate a lot of food; the bill was several hundred dollars. Bill, my old roommate, paid the entire tab. Was that fair? Should we have split the tab equally? Gotten separate checks? The college kids were broke … Read More

The Green New Deal

Harold Black, PhDBlog

In one Rocky and His Friends episode, the bad guy, Boris Badenov, sought to incapacitate America by spraying its leaders with goof gas turning geniuses into babbling idiots. He went to Washington and listened to a debate in Congress, looked at his colleague, Natasha Fatale, and said “someone beat us to it”. I had the same feeling when I watched the roll-out of the so-called “Green New Deal”. The main speaker was the socialist darling of the media who was just elected to Congress. Under normal circumstances virtually any other person who misspoke as much and was so consistently wrong, … Read More

Waffle House Wisdom

David MoonBlog

I recently met Kryshonna, a third-shift waitress at the Asheville Highway Waffle House. She seemed fully sincere when she yelled the obligatory “good morning!” as I walked in. As I waited on my omelet, I read an article about the smaller tax refunds this year and I wondered how changed rates and withholding tables affected the psyche and pocketbook of non-one percenters. I asked Kryshonna if she’d filed her taxes yet and, if so, how did her refund compare to a year ago? Or was it none of my darn business? Kryshonna immediately began telling me about her refund, specifically … Read More

Trumping the Federal Reserve?

Harold Black, PhDBlog

In the last month or so of 2018, we saw a highly volatile stock market capped off at year’s end by the largest single point gain in history. All the pundits have an explanation. It’s Brexit, oil prices, slowing world economies, Trump’s tariffs on friends and foes and, of course, the Fed. Blaming the Federal Reserve seems to be the president’s favorite, as he regularly excoriates Fed chairman Powell, saying that his appointment was the president’s worse mistake. There was even speculation that Trump might fire Powell. The question is, “could he, since the Senate confirms the Fed chairs to … Read More

States monopolize “sin businesses”

David MoonBlog

As a teenager in Alabama in the 1970’s, my father would occasionally sit in his truck and send his overgrown 15-year-old son inside the “state store” to buy Jack Daniels or, as he called it, “George Wallace cough syrup.” So much of that scene is disturbing, although I didn’t realize it at the time. Even as a teenager, however, I found it strange that you could only buy liquor in stores owned by the state. Liquor sales are still prohibited in 40% of Alabama’s counties. An unlikely alliance between churches and the Alabama Alcohol Beverage Control Board still argue that … Read More

Extrapolation is poor investment strategy

David MoonBlog

When the U.S. stock market dropped a record 9.18% in December, out came the bears. Both individual and professional investors feared the beginning of a long and painful market decline. Money flows into stock mutual funds declined and forecasts of future continued price drops increased. Forecasts of doom and gloom were just weeks old when the market increased 7.87% in January. Sentiment had already reversed course again, with an increasing number of investors bullish on stocks for 2019. I have found that there are two very common methods that people use to predict future stock returns. Some people base their … Read More

Shutdown exposes financial threat

David MoonBlog

Of the takeaways exposed during the recent partial government shutdown, the most alarming is the precarious financial condition of a huge segment of our professional population. When Elaine Streno, Executive Director of Second Harvest of East Tennessee, told me about calls her organization received from federal employees who had missed their first paycheck, I was initially dismissive. Someone misses one paycheck and the first thing he does is call a food bank? I can think of a number of phone calls to make after missing the first of an unknown number of paychecks, but the food bank would not have … Read More