When recently asked to speculate when the COVID-19 case count might support fully reopening his state’s economy, New York Governor Andrew Cuomo offered a candid response. “All the early national experts [were saying], ‘here’s my projection model; here’s my projection model.’ They were all wrong. They were all wrong.” That’s okay; people make mistakes, especially in rapidly changing complex systems. I speak with much personal experience in this regard. If an investor lets his ego attach to his decisions, he is likely to compound his loss by denying the mistake or changing his premise. The same is true of epidemiologists … Read More

The phrase “social distancing” is a horrible misnomer. What authorities are encouraging is physical distancing. Or antisocial positioning. But “social distancing” is an oxymoron, much like “jumbo shrimp” or “fire department.” Where is George Carlin when we need him? I miss the phrase “flatten the curve.” For a while, it was everywhere. It has fallen out of favor with the media and authority class. Mission creep has morphed that logical, easy-to-understand term into something analogous to “you are a selfish science denier if you want to go back to work or question the ever-changing and often contradictory advice of the … Read More

When all the stages of lockdown end, many of the new economic realities will be obvious. Massive unemployment, fewer small businesses, reduced tax revenues in government coffers and a ballooned national debt. We are also going to have interest rates that generally hover near zero. The interest rate aspect doesn’t yet receive the attention it deserves, likely because no one has any real-life experience with zero percent rates in the U.S. The implications are not all positive. From a macro standpoint, zero percent rates deprive the Federal Reserve of one of its most used (and effective) economic tools. Historically, central … Read More

For decades, the most common question I have been asked in business-ish settings has been “what is the stock market going to do this/next year?” That question has now been supplanted by “when do you think this will be over?” Fortunately, I can use the same answer for either question: I don’t know. Part of the difficulty in answering the new question is knowing exactly what “this” is. When will this be over? The lockdown? The yet-to-be-declared recession? The bear market for stocks? New coronavirus infections? New COVID-19 related deaths? Even with a clear definition of “this,” however, no one … Read More

A number of recent editorials have suggested that one potential silver lining to the novel coronavirus is that it will serve as a collective wake-up call, inspiring behavioral changes that will save America from its current destructive downward societal path. One writer in Knox News described America as a real mess, lamenting that the outlook is grim indeed. There is never a shortage of things to correct in any system, whether it is a country, business or family. There are plenty of things I would change in this country if I was king for a day. But to describe the … Read More

In 35 years in the investment business, I have observed that the three most intimate things in most people’s lives are their sexuality, spirituality and money. If you want to know what is really important to someone, observe how he spends his Saturday nights, his money and his Sunday mornings. The people who proclaim their moral superiority by noting that without good health money is worthless are often the same ones who, in a different discussion, quickly note that (someone else’s) money is necessary to provide everyone quality healthcare. There are a lot of people who are vehemently disdainful of … Read More

In Loving Memory of my Mother, Harriet Barfield Black, August 6, 1918-April 20, 2020 I am having COVID-19 fatigue. It’s appropriate that the first three letters and the last two letters of pandemic spell panic because it seems that every action and reaction to the virus is knee jerk. Our leaders, on virtually every level, medical experts, modelers, politicians, academics and pundits all give the impression that no one knows what they are doing. That is why I have decided on taking a leave of absence from the COVID-19 panic and opine on another subject entirely: the Electoral College. There … Read More

Congratulations. Now your work really starts. If you are leaving high school and headed to college, do not listen to the people who tell you that college will be the best time of your life. I certainly hope that isn’t true for you. Living mostly independently for the first time can be the most important time of your life, but I hope your life doesn’t peak at 20. Right now, you are developing the habits that will serve you for the remainder of your life.  Don’t leave that to chance. Decide what habits you want to have when you are … Read More

There are reasons to continue certain business restrictions in the fight against the coronavirus, but the economy is not one of them. Be wary of those advising that we must close the economy in order to save it. That argument fails the smell test and is based on faulty logic. A recent headline warned, “Economist urges continuation of social distancing to avoid recession.” I have news for this economist: we are going to have a recession. And the longer Americans remain non-producing, the worse it will be. A March 27 policy brief from some different economists (these at the University … Read More

Open your statement. As tempting as it may be to stick your head in the sand, look at your March 31 401(k) statement. There is a possibility that your actual account value decline is less than you think. It’s not likely, but it’s possible. With the prospect of 25 percent or more unemployment and history’s steepest quarterly GDP decline, your poor first quarter investment return may be less horrible than you imagine. You also need to see what a bad quarter looks like, especially if you’re young. If you’re in your 20s, your 401(k) may have declined 30 percent, but … Read More