Douglas Tengdin, CFA is Chief Investment Officer at Charter Trust Company. The Global Market Update is a daily market commentary.


Juggling AIoT

By |2018-01-16T12:06:14+00:00January 16th, 2018|Categories: Global Market Update|Tags: , , , |

What is Artificial Intelligence of Things? Photo: Xavier Caré. Source: Wikimedia Commons. CC-BY-SA 4.0 We know what artificial intelligence is. That’s when computer algorithms can beat us at checkers or chess, or help manage freight train traffic through Chicago. And people understand the internet of things, where a smart-thermostat talks to a motion sensor at home and turns down a room’s heat if there’s nobody in there. But what is the AI of things? There are lots [...]

The Confidence Gambit

By |2018-01-16T12:03:43+00:00January 16th, 2018|Categories: Global Market Update|Tags: , , |

Are people overconfident? Consumer Confidence Survey. Source: St. Louis Fed It’s an important question. Studies published over the years demonstrate that most people overestimate their abilities and their potential for reaching their goals. Julie Andrews illustrated this 60 years ago in the movie “The Sound of Music” when she sings “I have confidence.” The song makes an ironic point: her character’s confidence was wildly misplaced. She had very little reason to expect everything to “turn out fine” [...]

The Future of Investing

By |2018-01-16T12:02:10+00:00January 9th, 2018|Categories: Global Market Update|Tags: , , |

Is active management doomed? Illustration from Dante’s Inferno by Gustav Dore. Source: Wikipedia In 1991 William Sharpe posited that active investment management would inevitably underperform passive management. He made two observations: 1). The returns on all active portfolios, in aggregate, would be equal to those of all passive portfolios; and 2). The higher fees that active managers charge would doom their portfolios, in aggregate, to underperformance. Sharpe’s observations have been cited as if they were a geometric [...]

Deep Korean Kimchee

By |2018-01-16T12:00:46+00:00January 8th, 2018|Categories: Global Market Update|Tags: , , |

How did Korea get to this impasse? North Korean military parade, 2015. Photo: Uwe Brodrecht. Source: Wikipedia After the Korean War, North Korea was far more developed than the south. They had most of the chemical and power plants, and they received a lot of financial aid from the Soviets. In 1960 South Korean per capita income was about $70 per year. A quarter of their economy came from the sex industry servicing the US military presence. [...]

It’s the People

By |2018-01-08T13:52:14+00:00January 5th, 2018|Categories: Global Market Update|Tags: , |

Why does US healthcare cost so much? Photo: Norbert Kaiser. Source: Wikimedia People complain about healthcare costs all the time. And it’s shocking when you look at what a routine medical procedure costs, whether your Medicare pays, or your insurance company pays, or you’re on your own. And compared with other countries, the US is in a league of its own. We devote about 17% of our total economy on health care, while other wealthy countries spend [...]

Bitten by the Bits

By |2018-01-05T15:00:59+00:00January 5th, 2018|Categories: Global Market Update|Tags: , , |

Is bitcoin a bubble? Source: Bloomberg In 2008 a man named Satoshi Nakamoto posted a research paper on the web that described his design for a new digital currency he called bitcoin. There had been various attempts at digital currency over the years: eCash, bit gold, b-money. But none of these got off the ground. They foundered on the notion of a centralized ownership registry. Nakamoto got around this by designing what he called a “block chain”: [...]

Songs and Circles and Cycles

By |2018-01-05T14:59:58+00:00January 5th, 2018|Categories: Global Market Update|Tags: , , |

Can Joni Mitchell teach us something about investing? Photo: Earl53. Source: Morguefile 45 years ago, Joni Mitchell wrote “The Circle Game,” a lyrical epic about a young man’s gradual coming of age. The refrain repeats its central lesson: “We can’t return, we can only look behind from where we came / and go ‘round and ‘round and ‘round in a circle game.” Circles and cycles are part of investing. The economy cycles through growth and recession every [...]

Chillin’

By |2018-01-05T14:50:39+00:00January 5th, 2018|Categories: Global Market Update|Tags: , , |

What effect does cold weather have on the economy? Low temperature forecast for 1-2-18. Source: Weather.gov Temperatures across the country are bitterly cold. We haven’t seen an extended cold-snap like this for several years. And some sectors of the economy will be hurt: construction spending and retail sales come to mind, while utilities, fuel-oil sales, and auto repairs will do better. The trend away from physical stores towards online shopping should accelerate. No one wants to go [...]

On the Horizon

By |2018-01-05T14:57:36+00:00January 5th, 2018|Categories: Global Market Update|Tags: , , , |

What does 2018 look like? Photo: Dave Meier. Source: Picography On its face, next year looks a lot like this year, just starting from a higher level. The economy – already growing well – should accelerate. A coordinated global expansion is currently underway. This will lead unemployment to fall and wages to rise. That will push inflation marginally higher, but not too high. The Fed will respond with a couple of rate hikes, but new Fed Chair [...]

Making Records

By |2018-01-05T14:55:35+00:00January 5th, 2018|Categories: Global Market Update|Tags: , , |

What kind of year was 2017? Vinyl record-cutting machine. Photo: JacoTen. Source: Wikipedia Looking back, it was a year of records. The stock market is closing at or near its all-time high; the Dow hit a record level 69 times this year (so far). And for the first time in a long time, the US wasn’t the strongest large market in the world. While the S&P 500 is up 22%, the Chinese stock market is up 24% [...]