What are these investors smoking?

David MoonBlog

I didn’t need anyone to tell me that the marijuana investment craze was foolishness, but my waiter at dinner a few weeks ago provided confirmation when he spent about 20 minutes telling me about a cannabis stock that was going to make him rich. I don’t mean to pick on him; I’ve had the same conversation with plenty of people, including business owners and PhD engineers. Curiously, I haven’t had that conversation with any farmers. There are multiple facets of the marijuana investment theme, including retail sales, medical cannabis, cannabidiol (CBD oil), branded pot and hemp biomass. Bluntly, money is … Read More

Warning: Experts declare no recession imminent

David MoonBlog

On January 6, ten well-known investors and economists sat down with editors from the financial newsweekly Barron’s and reviewed their 2020 outlook for the economy and financial markets. The good news is that the experts were unanimous in their assessment that the U.S. economy would not slip into a recession this year. The bad news is that the experts were unanimous in their assessment that the U.S. economy would not slip into a recession this year. Call me a contrarian, but when the experts are unanimous about something, I examine their conclusions more carefully. Their opinions diverged on topics related … Read More

War drums offer little investment insight

David MoonBlog

Less than 24 hours after a U.S. drone strike killed Iranian General and Republican Guard head Qasem Soleimani, the phrase “World War 3” began trending on Twitter. It is generally awkward to discuss money in the context of war and death, but it doesn’t stop anyone from doing it. But unless you are going into the bomb-making business, geopolitical conflict doesn’t offer much help in making investment decisions. This is especially true with respect to Iran, which has been in an almost constant state of war with someone since at least the 7th century BC. Whether it’s fighting the Scythians, … Read More

A decade worth celebrating

David MoonBlog

By almost every quantitative measure, we just completed the most outstanding decade in the history of mankind. Poverty has declined; health and wealth have improved. And despite news reports to the contrary, this is the safest, most peaceful time in history. In 1990, 36 percent of the world’s population lived in extreme poverty, compared to less than 8 percent today. There are 500 million fewer people in poverty today than a decade ago. What about the world’s supposed “shrinking middle class?” For the first time in recorded history, over half the world’s population has enough discretionary income to be considered … Read More

Medicare for All: Are we stupid yet?

Harold Black, PhDBlog

When he reached his 80s, my dad said that the scammers must think that he had gotten stupid from all the scam calls he was now getting. Well if that were the case, then the American electorate must have just turned 80. How else to explain the serious discussion about Medicare for All where the government takes over the healthcare insurance industry? The gang that gave us Obamacare with its high deductibles and rising premiums are now going to make things worse. With straight faces comes one proposal costing $3 trillion a year and another at “only” $2 trillion a … Read More

NY resolutions about money

David MoonBlog

According to a Harris poll, this year’s most common New Year’s resolution is the same as it is every year: to lose weight. For this goal to keep topping the annual list, people must generally be failing at accomplishing this goal. Having lost a little more than 2,000 pounds in my life, I am uniquely qualified in advising people how to lose weight. I am also an expert at gaining it. This week millions of people will go through a half-hearted 2020 resolution exercise. For most, the exercise will result in little more than a wish list, without any of … Read More

Last minute gift ideas for David Moon

David MoonBlog

With only a few shopping days remaining before the big day, here are a few gift ideas for me. One or two items from the list are fine; don’t feel obligated to buy everything. I need a really comfortable pair of dress shoes, size 14E. An extra-long tie that will actually make a nice knot. Some nice, no-iron dress shirts. A full-sized iPad that will fold and fit in my pocket. I don’t need a car that goes from zero to 60 in five seconds. I want one that goes from 85 to 65 in less than one second. I … Read More

Jon Gruden Syndrome and your 401k

David MoonBlog

If it seems that you too often buy high and sell low, there is a good chance you suffer from Jon Gruden Syndrome. The condition was initially discovered in the Tennessee football fan base, and has subsequently been identified in other populations, including teenagers, voters and 401(k) investors. Every time the University of Tennessee seeks a new head football coach, legions of Tennessee fans and big-time financial supporters become infatuated with the idea of hiring (now) Oakland Raiders head coach Jon Gruden. It isn’t his 51% winning percentage that excites fans. People are swayed by the articulate and charming presentation … Read More

Explaining the Trump stock market

David MoonBlog

Since Donald Trump’s election on November 8, 2016, the S&P 500, a broad measure of the U.S. stock market, increased 50 percent. Why? If you despise Trump, you likely credit “the continued Obama economic recovery” or “Wall Street billionaires’ love of Trump.” If you like Trump, you likely believe that the stock market is doing well because “we finally have a businessman in the White House” or that investors were relieved that Hillary Clinton wasn’t elected. Both sides are wrong. The explanation is simple math. The price of a stock (or group of them) is algebraically determined by two broad … Read More

BB&T, SunTrust, First Tennessee merger news

David MoonBlog

Charles Schwab recently announced it will acquire rival TD Ameritrade in a transaction worth approximately $26 billion. If approved by regulators, the new Schwab would become one of the country’s largest brokerage firms, with $5 trillion in assets. In more local merger/acquisition news, BB&T and SunTrust are combining to create the sixth largest bank in the country. The companies always refer to the transaction as “a merger of equals,” but by practical observations and most financial metrics, it appears that BB&T is acquiring SunTrust. The companies expect the merger to be complete on December 6. Within the next two years, … Read More