Trading Bears and Kitties

By |2017-12-12T15:06:27+00:00December 8th, 2017|Categories: Global Market Update|Tags: , , |

Remember “Beanie Babies”? Photo: Jonny Connormah. Source: Wikipedia My kids went gaga over Beanie Babies in the ‘90s. The cute plush toys are filled with plastic pellets rather than conventional stuffing, which game them a more flexible feel. People began collecting them, then trading them like financial assets – the way some people treat baseball cards. At one point, Beanie Babies accounted for 10% of Ebay’s sales, and more than half of all American households had at [...]

The Da Vinci (Investment) Code

By |2017-11-21T13:41:52+00:00November 20th, 2017|Categories: Global Market Update|Tags: , , |

Is art an investment? “Salvatore Mundi” by Leonardo Da Vinci. Source: Wikipedia Leonardo Da Vinci didn’t leave many paintings, perhaps only a couple dozen. So when “Salvatore Mundi,” – commissioned in 1500 and later owned by Charles I and the Duke of Buckingham – resurfaced in 2005, the art world went a little crazy. It was cleaned and restored and exhibited by London’s National Gallery in late 2011. In 2013 a Russian collector bought it for $127 [...]

The Death of Dreams

By |2017-10-20T10:42:17+00:00October 19th, 2017|Categories: Global Market Update|Tags: , , , |

When is an asset class not an investment? Cemetery in Armenia. Photo: Arantz. Source: Wikipedia Assets come in three flavors: true investments, speculations, and gambling. The difference can subtle be subtle, but real. Investments have their own internal cash flow, and you look at the nature of the asset itself to determine whether you want to commit your cash. By that measure, stocks, bonds, and real estate are investments. Price is what you pay, value is what [...]

A Brief History of Bubbles

By |2016-11-17T15:40:06+00:00October 18th, 2016|Categories: Global Market Update|Tags: , , , |

What’s wrong with bubbles? Photo: Michelle DiNocola. Source: Morguefile Sir John Templeton once famously noted that the four most expensive words in the English language are, “This time it’s different.” It’s easy to get caught up in the excitement of the moment, to believe that the latest innovation will lead to a new era. But human nature doesn’t change. That’s why it’s so fascinating. Before the first documented financial bubble—the tulip crisis in 17th century Holland—there were [...]

Rich Dollar/Poor Dollar

By |2016-11-17T16:20:03+00:00May 14th, 2015|Categories: Global Market Update|Tags: , , |

Image Source: Wikipedia Has the rally in the dollar run out of steam? The US Dollar has been on a roll. Over the past year the trade weighted dollar has risen 25 percent. The strong dollar has depressed exports, retail sales, industrial production, corporate earnings, and a host of other factors. The combination of tighter money here and aggressive QE in Europe and Japan have raised the dollar’s value significantly, after three years of little change. Image [...]

European Options

By |2015-01-09T12:35:45+00:00June 19th, 2012|Categories: Global Market Update|Tags: , , |

What’s up with government bonds?On the face of it, global bond yields appear to be at crazy levels. Ten-year government bonds vary from insanely low levels, like Japan and Switzerland at less than 1%, to Italy and Spain near 6% or even 7%. In the middle are the US and the UK, with their ten-year bonds yielding around 1.5%, even as long-term inflation runs around 2-2.5%. It looks like investors are paying their governments for the privilege [...]