Feds protect all failed bank depositors – this time

David MoonBlog

Don’t take the media’s explanation that the failure of Silicon Valley Bank (SVB) was due to poor management decisions isolated to this one institution. This second largest bank failure in U.S. history is a prime example of the law of unintended consequences, and it has every banking institution in the U.S. scrambling to reevaluate their balance sheets. First, the most important fact: if you have less than the FDIC insurance limits deposited in a single bank, you don’t need to worry about ever having access to your money. Insured deposits include checking accounts, savings accounts, money market deposit accounts and … Read More

Priorities root of financial outcomes

David MoonBlog

A friend of mine, almost 70 years old and disgustingly fit, orders a piece of chocolate cake almost every time we have dinner. He never finishes his entrée or dessert, explaining that he knows what he must sacrifice in order to enjoy a daily taste of chocolate cake and still remain fit. “It’s all about my priorities,” he explains. I thought about that while chatting with another friend of mine last week, a young man in his 20s. He works 36 hours a week in a medical profession and explained that he is suffering from professional burnout. My young friend’s … Read More

Politicians should return FTX contributions

David MoonBlog

Officials in charge of trying to recover billions of dollars stolen by Sam Bankman-Fried (SBF) are looking to recover $73 million for victims from some interesting beneficiaries of the massive fraud: almost 40% of the members of Congress who received political contributions from SBF and related entities, including one East Tennessee Congressman. According to an analysis by the website CoinDesk, 196 U.S. lawmakers took direct contributions from either Sam Banksman-Fried, one of his companies or other executives of those companies. I don’t know the legal definition of “receiving stolen property,” but once two of SBF’s associates pleaded guilty to fraud … Read More

Regulators fight previous tech war

David MoonBlog

The Justice Department and eight state attorneys general have brought an antitrust lawsuit against Google, alleging that the company uses its dominant position in the online ad industry to take business from its would-be competitors. Ignore for a moment that every successful business wants to defeat its would-be competitors. Also ignore that federal officials are seeking to dismantle a monopoly that Congress itself essentially created with the passage of the 1996 Communications Decency Act. The federal government’s suit against Google is simply the latest example of inept federal regulators, prosecutors and legislators fighting the last war. The irony of the … Read More

Education no automatic protection against fraud

David MoonBlog

Weidong Xu, a Harvard University teacher several years ago, was also a researcher at the Dana-Faber Cancer Institute. Xu was raising investment capital to fund work on a SARS treatment, ultimately collecting $600,000 from friends and family. Except rather than use the money for research, the well-connected and well-educated Xu sent the entire amount to a group in Nigeria promising that he was about to be the beneficiary of a $50 million windfall – as soon as he funded some minor and routine expenses related to his good fortune. $600,000 worth of expenses. That’s right. A teacher at Harvard not … Read More

I hate to say “I told you so”

David MoonBlog

It is seldom healthy to say, “I told you so,” but sometimes the temptation is too great. A year ago I compared the valueless techno-firms burning through investor money on Super Bowl cryptocurrency ads with the almost identical phenomenon 22 years earlier with the 2000 Super Bowl dot-com ads. Although the similarities were impossible to overlook, I didn’t expect the crypto world to crumble so quickly. Perhaps I should have; the dot-com Super Bowl ad buying binge in January 2000 marked almost the peak of the tech-heavy Nasdaq Composite. It would be 15 years before that tech-heavy stock index recovered … Read More

The end of privacy

David MoonBlog

Scholars have long debated whether there is an implied right to privacy within the US constitution. That debate is now irrelevant because the quaint age of even moderate privacy is over. I realized this while chuckling about Madison Square Garden using facial recognition technology to identify attorneys who are suing the venue’s owner and barring those individuals from attending events at the Garden. MSG Entertainment CEO James Dolan explained the organization’s adverse attorney policy. “At Madison Square Garden, if you’re suing us, we’re just asking of you – please don’t come until you’re done with your argument with us.” MSG … Read More

How could Trump pay no 2020 income tax?

David MoonBlog

A recent report from the House Ways and Means committee disclosed that former president Donald Trump paid no federal income taxes in 2020, prompting plenty of public declarations that his tax returns are just more evidence that the former president is a crook. Trump may or may not be a crook, but there are plenty of reasons for not paying taxes, only one of which is that you are a crook. It makes for a great headline or social media post to criticize a wealthy person or large company for not paying taxes. How could Donald Trump (or FedEx, Amazon … Read More

2022 Q4 letter

David MoonUncategorized

January 2023 Dear clients and fellow shareholders: The S&P 500’s almost 20% decline last year was the stock market’s third worst year since 1937 and the largest annual drop since the Great Recession decline in 2008 (-38.5%.) While we are never pleased with losses, our focus on valuation helped us sidestep much of the market’s 2022 decline. Our stock portfolio declined approximately 7% last year, buoyed by our positions in healthcare (McKesson, Cigna, AbbVie, DaVita and CVS) and homebuilder Green Brick Partners. (Your actual equity portfolio return may differ because of legacy positions or cash flows in/out of your portfolio.) … Read More

Did jersey color foretell UGA win?

David MoonBlog

Although the margin of victory exceeded most people’s expectations, it should have surprised no one that Georgia defeated TCU in the CFP national championship game Monday night. Not because Georgia has superior players or coaches – but because of their jerseys. In the past 30 years, 64 percent of the FBS (Division 1) national championships were won by teams whose primary jersey color was red. Yet red is the primary color for only 38 percent of the 130 FBS schools. And this is not just a Georgia/Alabama phenomenon. It includes championships won by other redders such as Florida State, Southern … Read More