2021 Q4 client and investor letter

David MoonUncategorized

January 2022 Dear clients and fellow shareholders: By almost every broad measure, 2021 was a great year for investors. All major U.S. stock indices increased more than 20 percent, finishing the year at all-time highs. Our stock portfolio performed even better (up approximately 30 percent, excluding cash and bonds), despite not owning the ridiculously priced tech stocks that always seem to grab headlines. We enjoy those types of returns at least as much as anyone else, but not to the point of ignoring the components that generated those returns. Not all price increases are created equal – and some are … Read More

Third Fed official resigns amid trading controversy

David MoonBlog

Federal Reserve Board Vice Chairman Richard Clarida resigned this week under pressure for purchasing millions of dollars in stocks the day before the Fed announced emergency measures to support the economy. It is illegal for fund managers to “front run” their clients’ or investors’ trades. Clarida front ran the entire country. He is also the third Fed official to resign in less than four months following disclosures of trades each made in the early days of the pandemic. Is it any wonder people don’t trust the Fed? House Speaker Nancy Pelosi and her husband recently made $30 million trading stock … Read More

Signs wars relic of banking past

David MoonBlog

The bank sign wars continue in downtown Knoxville, with Truist (“What do you get when you cross a BB&T with a SunTrust?”) maintaining its tight lead over First (Tennessee) Horizon, but likely not for long. The 24-story Riverview Tower (the C.H. Butcher building, for Knoxville old-timers) once had BB&T signs near the top of the building on all four sides. The building now features the non-word “Truist” next to a logo that looks like the YouTube video pause button. Next door at the 27-story Plaza Tower (the Jake Butcher building), First Horizon is replacing its rooftop red, white and blue … Read More

Are you the root cause of inflation?

David MoonBlog

Inflation is almost certainly headed even higher – and expect some experts to place the blame on you. You’re buying too much stuff. Christmas retail sales were a record $843.4 billion this season, an 8.5 percent increase from a year ago. This follows a then-record $777.3 billion in Christmas sales last year, an 8.2 percent jump from 2019 levels. Since at least 2000, Christmas sales have never increased more than 7 percent in a single year. We’ve now had two consecutive years of more than 8 percent increases. In those same two years US production increased a total of zero. … Read More

My Christmas wish list for others

David MoonBlog

Thinking of others is always the kind and mature thing to do, especially at Christmas. It is with that sense of selfless generosity (and some sarcasm) that I’ve compiled a list of gifts for others this year. For President Biden, I wish for his safety and good health. And a three-year supply of 5 Hour Energy. For Nick Saban and Mitch McConnell, retirement parties. For the City of Knoxville, home of the Women’s Basketball Hall of Fame and the Sunsphere, a new marketing tagline: “Knoxville, we got balls.” (Who needs good grammar with that kind of chutzpah?) Santa should bring … Read More

Seven secrets or excuses?

David MoonBlog

While perusing social media the past couple of weeks (an admittedly horrible habit), several times I ran across the same reposted comment titled “The Seven Secrets of Highly Successful People.” I want to be highly successful, so the post immediately caught my attention. Apparently, not only are my odds of succeeding not very good, but according to this list, the secrets to success are completely out of my control. The first two supposed secrets to success are private school and legacy admission to an Ivy League school. Uh-oh; things aren’t starting too well for this rural Alabama redneck. The next … Read More

All decisions are risky

David MoonBlog

To increase pedestrian safety, Knoxville is reducing the City’s unposted speed limit from 30 to 25 mph. Speaking at a recent City Council meeting, the president of Bike Walk Knoxville cited research that a person is 70 percent more likely to be killed if they are struck by a vehicle travelling 30 mph versus 25 mph. Why not reduce the speed limit to 5 mph? Or we could eliminate all vehicle/pedestrian fatalities be outlawing vehicles in the city. Zero pedestrian deaths. Zero food and package delivery, too. I’m not picking on City Council. And I don’t care what the speed … Read More

Ignorance may be bliss, but it is ignorant

David MoonBlog

We’ve all heard that if a frog is dropped into a pot of boiling water, it will immediately jump out, but if the water temperature is slowly increased, a frog will sit in the pot until it is eventually boiled to death. The “boil a frog” metaphor is a fantastic lesson about the risk of slow, unnoticed change. It is also a myth. If dropped into boiling water, a frog would likely lose consciousness from the shock or suffer instant severe burns that would render it unable to leap. But if placed in a pot of comfortable, but slowly heating … Read More

Thanksgiving week irritants

David MoonBlog

Rather than offer another boring, self-serving Thanksgiving week recitation of things for which I am grateful, in the interest of balance, here is my very abbreviated annual list of irritants. Restaurants that serve tiny entrees on huge plates. Restaurant menus more than four pages long. People who undertip at Waffle House. People who undertip anywhere. Brown bananas, candy corn and congealed cranberry sauce. People who use “barbeque” as a verb. Potato chip bags: why don’t they have Ziplocs on them? All-beef bologna. People who eat bologna don’t care what’s in it. The new college football overtime rules, placekickers and stadium … Read More

Drastic, lasting change is rare

David MoonBlog

The surprise election of a political novice to the governorship of Virginia provides a useful investment lesson, although probably not one you would guess. It does not, in my opinion, signal a quasi-lasting shift in voter sentiment. Instead, it is a reminder how quickly stable people can change their opinions about very important matters – and not just those involving politics. But politics is a great example, because it is something about which everyone has opinions – and most people are very certain of their opinions. I don’t believe the claims that the recently concluded elections signal some massive change … Read More