President’s party poor market predictor

David MoonBlog

Last month the S&P 500 increased 10.8 percent. Clearly, the stock market loves Democrats. But in the 70 days between Donald Trump’s election in November 2016 and his inauguration, the market also increased 10 percent. Wall Street must love Republicans. Except the stock market also jumped 10 percent when Trump lost last month. Maybe Wall Street loves Republicans but hates Trump. No; that can’t be it. In the month Bush 43 was elected the stock market dropped 6 percent. Investors hate Republicans. Except the market jumped 10 percent the month Reagan was elected. So maybe investors do hate Democrats. In … Read More

Restarting economy proven complicated

David MoonBlog

During my recent semiannual trip to the mall, the only evidence I saw of a pandemic was the prevalence of masks, even among the packed food court customers, many of whom were less than 6 feet from each other. Early reports indicate that in-person retail sales will likely decline from a year ago, but compared to April, West Town Mall looked like pre-pandemic Disney World on Free Fast Pass Day. As I wrote in March, it is much simpler to immediately and completely shut down an economy than it is to reopen one. The disparity of the economic recovery has … Read More

Be wary of celebrity endorsements

David MoonBlog

My ears perked a bit when I heard former television personality Bill O’Reilly on the radio this past week. I didn’t realize he was back on the air. Except it wasn’t a program; it was an ad for a company called National Realty Investment Advisors. (NRIA) O’Reilly was touting some investment that would supposedly produce a “10 percent monthly payout.” Since a 30-year Treasury bond currently yields 1.6 percent, Mr. O’Reilly’s ad caught my attention. Three minutes of Googling revealed that previous NRIA television ads encouraged viewers to “call us for 18-to-21 percent targeted return.” NRIA uses the fraud-magnet EB-5 … Read More

Thanksgiving week irritants

David MoonBlog

Rather than bore you with a syrupy, Thanksgiving week list of things for which I’m thankful (family, friends, blah, blah, blah), I continue my holiday tradition of sharing a (very partial) list of things that irritate me. Virtue signaling. Pennies. The Wi-Fi in my house. My Apple ID. How do I get my kids’ 12-year-old Hannah Montana songs off my phone? Humblebragging, as in, “I’m sorry I won’t be able to make the meeting; that’s the day I’m interviewing interior decorators for our jet.” Twenty-five-year-old bartenders who want me to pay for their art history degree. Universities that have facilitated … Read More

Never love an institution

David MoonBlog

My reaction is clearly the minority, but I wasn’t bothered when eight assistant Tennessee football coaches initially declined voluntary pay cuts in an effort to mitigate the Tennessee Athletic Department’s expected $30 million to $40 million football revenue shortfall. Of course, my opinion would be different if I were the athletic director and responsible for minimizing the department’s net loss this year and next. Football is a business, and those eight men made a business decision. And whether they realized it or not, they were guided by a principle that investors would be wise to implement. A person can love … Read More

“Wealth coach” arrested for investment fraud

David MoonBlog

According to Securities and Exchange Commission and Department of Justice documents, Terrence Chalk, the self-described “nation’s #1 Business, Money and Wealth Coach,” sold unregistered securities to middle-income individuals since 2017. These small investors were lured by guarantees of 12 percent annual income, with the possibility of up to 70 percent annual returns and income distributions. Except, as you have likely already guessed, the securities were fake. Chalk wasn’t licensed to sell securities or registered to provide investment advice. Officials say he stole almost $5 million, including the entire retirement savings of many of the victims. Chalk was arrested in Orlando … Read More

Fortunately, the experts are regularly wrong

David MoonBlog

For much of this year, CNN has superimposed a coronavirus scoreboard on about 20 percent of the screen, featuring real time updates about U.S. COVID cases and deaths. Some people have compared it to something one might see on ESPN during a game broadcast. To me, it is more of a high-tech reminder of the network newscasts of my youth. Frightening news is not a recent phenomenon. When I was a kid, there was only ABC, CBS and NBC. Each evening, anchormen (only men) David Brinkley, Frank Reynolds and Walter Cronkite reported the number of US and Viet Cong deaths … Read More

What’s in a name?

David MoonBlog

For 25 years I have done my business banking in the same location. The bank has changed ownership a number of times, always accompanied by a name change. Years ago, bank names had an obvious logic to them. “Third National Bank” was probably the third nationally-charted bank in an area. “Bank of East Tennessee” was a bank somewhere in east Tennessee. Perhaps “BB&T” is/was a bit cryptic, but most people probably figure the word “bank” was represented somewhere in that acronym. “SunTrust” sounds like a bank at the beach. I hope my friends and the other good people at my … Read More

Beware the pocket square

David MoonBlog

In the mid-1990s, I was meeting with the representative of a company that was raising capital for a partnership that would purchase a number of apartment buildings around the southeast. I was questioning him about what appeared to be a terribly unfair fee structure.  The salesman assured me that my focus was misplaced.  “Don’t worry about all of the boilerplate language in the back of the document. Look at all the great photos in the front!” Variable annuities, non-traded real estate investment trusts, private investments advertised on the radio, any investment advertised on television … a substantial percentage of the … Read More

The long-term cost of COVID

David MoonBlog

Decades after the masks are gone, in-person college classes are a quaint memory and “flatten the curve” is a long-forgotten rallying cry, the U.S. will continue its fight against COVID-19. Well, we’ll still be paying for it, anyway. Last week, the Congressional Budget Office released its preliminary estimate of federal income and expenses for the government’s 2020 fiscal year, which ended on September 30. During those 12 months, the federal government is estimated to have collected $3.4 trillion in taxes and spent $6.5 trillion, creating a one-year record deficit of $3.1 trillion. Prior to COVID, the 2020 deficit was expected … Read More