Today’s OPEC agreement to limit production doesn’t have me racing to get back into oil. Historically, oil output agreements by OPEC have tended to fall apart. So we’re still hunting for value. If the energy sector begins to appear attractive we’ll be all over it, if our core mutual funds haven’t bought in. Read more here.
…Is that it’s a paper cut. Most days the market has barely declined at all. We don’t know what will happen. So far, not much.
To prevent becoming too concerned about day-to-day price volatility, check out this ultra-long stock market chart here.
Fascinating! Investing works. Stay the course…even if it gets a bit bumpy.
One of my fascinations is how to pass on wealth between generations. It amazes me how people can succeed magnificently at wealth transfers, and can even prepare the following generations for wealth which they themselves never enjoyed. Or sometimes they can blow things to shreds. Life is a lot harder than we would like to realize, and providing for future generations in terms of education and actual wealth is a profound blessing. There’s a lot to learn from the European and Asian families who have managed this successfully for centuries. Read here what billionaires do.
Here’s today’s thought to ponder. Stocks appear very overvalued. In classic financial markets, this matters.In today’s markets, this may not matter. In our brave new world, the support of central banks tends to distort valuations as indicators. However, there’s no harm in being cautious. Read the article here.
I’m guessing this is a good time to plan a visit to England. Today’s frenzy over the British pound is a good thing for British exporters too. It also illustrates why we tend to avoid ETF’s: too many technology-driven flash crashes.At some point soon I expect to go bargain hunting. Read more about why you should plan a trip to London here.
Last week we were in San Francisco listening to a presentation by Schwab’s chief economist, Liz Ann Saunders. My takeaway was that the economy is not thriving because of
a. excessive debt in the system.
The excessive debt may or may not have prevented a depression but its legacy is gargantuan payments to keep from defaulting. These will only become larger as interest rates rise.
The complexity is due to technological change and off-the-charts over-regulation. Distractions have grown and regulatory uncertainty is rife.
What will happen? We don’t know. Here’s bond guru Bill Gross’ latest comment.
At the end of a busy day of study and action, I’m looking at overall debt loads and interest rates. I’m wondering if, perhaps, the US government might seek to “accidentally” create runaway inflation for a short period to reduce the real cost of their soaring debt load. Otherwise, when interest rates go up, it’s going to be very difficult to repay. It worked for Germany in the 1920’s. No, wait, it didn’t work, did it? Still, it will be tempting when the bills come due.