Bitcoin is “disgusting and contrary to the interests of civilization.” —Charlie Munger, vice-chairman of Berkshire Hathaway When I was 17 years old, I bought shares of the Stop & Shop Supermarket Company (that grocery chain is now part of the Ahold Delhaize conglomerate). Being the kid I was, I held it only long enough to make the money I needed to buy the computer and the mountain bike I wanted. Stop & Shop wasn’t the only stock I considered. I remember ruling out Berkshire Hathaway because I didn’t have the $6,000-or-so to buy one single share. Maybe I should have split more wood…
Insights & Advice
Tag: large-cap stocks
Jobs and jabs
Bank of America (BoA) has been tracking the credit card use of clients who received the stimulus payments authorized by the American Rescue Plan (ARP). For the seven days ending March 27, 2021, aggregate credit card spending was up 82 percent from a year ago. Where is the money being spent? Everywhere. Furniture stands out, which reflects the heated home-building industry. And then electronics, clothing, airlines, home improvement, and restaurants (in that order of year-over-year growth). The two-year percentage change tells a better story because the world came to a halt the week of March 27, 2020. For the seven…
Stocks grind higher as bond yields retreat
April is usually a good month for markets. Historically, it is one of the three best months of the year for equities. We all know what happens in May (‘sell in May and go away’) but we will worry about that later. Over in the bond market, the bond vigilantes may have started to doubt their conviction that inflation is a fait accompli and so yields must go up. This week, yields declined a bit, which gave a boost to some sectors (gold and silver, for example), while banks pulled back a little. But Friday’s Producer Price Index report for…
CAPITAL IDEAS: Where is my ‘stimmy’?
A “stimmy,” according to Merriam-Webster, is a slang term that refers to the stimulus payments made to Americans as part of COVID-19 relief packages. There’s not a lot of good data on how Americans have, so far, spent their 2021 stimmies. As an investor, it’s a good idea to consider where some of that roughly $400 billion in checks from the $1.9 trillion American Rescue Plan (ARP) will flow. Perhaps it will go where it has gone before? An October 2020 Federal Reserve study found that 29% of the first round of stimulus checks were spent. Of the amount spent, nearly two-thirds…
Tech stocks rise from the dead
The large cap technology sector bounced back this week as bond yields fell. It is a see-saw market filled with several cross-currents. But if you want to know where stocks are going, keep your eyes focused on the U.S. Ten-Year Bond yield. In my last column, I explained how rising bond yields are like kryptonite to the continued performance of what I call “super tech stocks.” During the last two weeks, the NASDAQ 100, for example, experienced a 10%-plus down draft, as bond yields rose to 1.60% from 1.25%. Investors sold FANG stocks, and technology shares in new-era sectors, like…
Capital Ideas: Politics unusual
COVID-19 Vaccination Update As of February 2, 2021, 32.8 million Americans have now received at least one dose of a COVID-19 vaccine. That was more than those who tested positive for the virus. The average daily rate of vaccinations has reached 1.34 million doses per day. The average daily rate may be affected by the snowstorms of last week, but it seems to be trending upward. Trading a Pullback Valuations are staggeringly high. Nonetheless, I remain invested in equity for the portion of my portfolios intended for that. Despite sky-high valuations, I am hesitant to take bold defensive moves. I…
The 2021 stock market
Most Wall Street pundits are predicting another good year in 2021. That consensus view, however, differs on what areas will do the best, and what won’t. Here is my take on the new year. As a contrarian, it bothers me that so many investors are bullish. Too many sailors on one side of the rowboat tend to make the boat tip over. That said, I never simply do what others are not, unless there is a good reason to do so. Right now, I will go with the flow. Over the last decade, large cap stocks, led by the technology…
Dr. Feelgood
Dalton — Collectively, as a nation, we’ve all come to agree that Dr. Anthony Fauci is one of the most trusted medical figures in the country, and for good reason, as he is recognized by his peers as one of the world’s leading experts on infectious diseases. Collectively, as a nation, we’ve all come to agree that when Dr. Anthony Fauci says to do something for the good of the country’s health, then we should do it. On Friday, May 22, Dr. Fauci said that the stay-at-home orders intended to choke off the spread of COVID-19 could cause “irreparable damage” if…