The Stock Market’s Canaries in the Coal Mine
The canary in the coal mine is an often-used metaphor to describe an impending downfall in the stock market. This article will cover three distinct canaries: Falling Liquidity in the Repo Markets Increased Incidences of Fraud Circular Investing The Origin of the Metaphor Since the 1890s, coal miners would walk into a mine shaft carrying a canary in a small cage. The canary [...]
A Banquet of Consequences
Sooner or later, every market participant is exposed to a market correction, which, if not prepared for, can destroy years of capital gains and take years to recover from. For example, according to John Hussman, despite all the gains the stock market enjoyed during the "tech bubble" and the subsequent "mortgage bubble," the decline to the March 2009 market low erased the entire [...]
Inflation, Interest Rates, and Investing: A Changing Market Tune
Recently, a movie was released about the life of Bob Dylan. For those of us born in the 1950s, it was a reminder of our childhood. Our early formative years were filled with cultural changes illustrated by music and fashion. Attitudes became more adventurous and expressive. Short skirts, psychedelic colors, and long hair were the new fashion. Pop music shifted from large bands [...]
Prioritizing Tax Consequences Over Risk
Have you ever said to yourself, “I don’t want to sell because I will have to pay taxes”? The “South Indian Monkey Trap” mentioned in the book, Zen and the Art of Motorcycle Maintenance, by Robert Pirsig, is a metaphor for being trapped due to not letting go of something. The monkey has his hand stuck in a jar that is tied to [...]
IRA to Roth Conversions
A common question I receive from investors is whether they should convert a current IRA to a Roth IRA. This article will address some of the common benefits and concerns to consider when evaluating this option. This article in no way should be considered tax advice or investment recommendations. Any actions taken should be consulted with your tax and investment advisor. Benefits of Conversion [...]
The Greenspan Put – Are Rate Cuts Good for Equities?
Alan Greenspan was head of the Federal Reserve from 1987 through 2006. He is fondly remembered for his support of the equity markets. During the 1987 crash, he gave banks special permission to reduce margin and reserve requirements. This allowed them to loan funds to market makers in order to create price support during the crash. In 1998, during the collapse of Long-Term Capital, [...]
The Futility of Macro Forecasting: Why Forecasts Are Rarely Helpful
Claudia Sahm, a former member of the Federal Reserve and the Council of Economic Advisors, devised a method of predicting the early stages of a recession. This rule has been published throughout media outlets. Its authenticity was cited by the famed economist, Larry Summers. I wanted to respond as to my thoughts on her observations and why it is critical to examine economic [...]
High-Priced Technology Stocks
Human nature leads us to be attracted to the most recent outcomes, whether they are positive or negative. While the recent success of high-profile technology stocks has been mind-blowing, it is important to look rationally at these outcomes and how likely they are to continue. Annualized Returns The following table illustrates the returns for the Magnificent 7, including the sell-off in 2022: [...]
“To Sell, or Not to Sell, That is the Question”
In William Shakespeare’s Hamlet, there is a famous speech by Hamlet where he is trying to decide whether it is better to live or die by suicide. He discusses how painful life can be, and how death would be preferable, would it not be for the fearful uncertainty of what comes after death. Investors agonize over the thought of selling a profitable position, paying [...]
Will Private Equity Lead the Next Market Collapse?
The 2008 market collapse was led by the housing bubble. The 2000 market collapse was led by the technology industry. Each of these market collapses was sparked by the flames of excessive leverage and unrealistic growth projections. Will the excessive leverage and unrealistic growth expectations of Private Equity lead to the next market collapse? What is Private Equity? Private Equity (PE) is [...]
Faith and Investing
As faithful Christians, the application of our Christian beliefs does not begin and end on Sunday. We are called to live and experience our faith in all that we do, including our economic and financial choices. The Pontifical Council for Justice and Peace, in the Compendium of the Social Doctrine of the Church says that “economic activity is to be considered and undertaken [...]
Understanding All Types of Investment Accounts
At Core Capital Management and Research, we work with discerning individual investors to develop a strategy tailored specifically to you. As we continue to manage your account, we provide you with concierge-style service and help you maintain discipline and objectivity in all of your investment decisions. Our clients trust us to manage a variety of assets they may have. Often understanding all the [...]
Is Fear Costing You Money?
Paul Andreassen of Harvard did a study on two groups of people. He gave each group a portfolio of stocks to manage. One group was told to watch certain financial programs, read stock market articles, and stay on top of information regarding their portfolios. The other group was told explicitly to avoid all information regarding their holdings — a news blackout of sorts. [...]