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Everyone Deserves A Shot at Happiness

The polarization in U.S. politics has reached a nearly untenable divide. If one party gains control of the federal government roughly half the U.S. population feels completely disenfranchised, and when the other party does so then the other half experiences that same feeling. This is not the way a nation can succeed, and in fact it seems apparent that ours is getting torn apart day by day.

Recent posts

Stocks are not going up

Stocks keep making all-time highs. Since the 2008 Great Recession, when stocks fell off a cliff, the S&P 500 index has climbed remarkably. An investor who invested in January of 2009 and held through this spring would have earned a 15.30% annualized return, including the reinvestment of dividends. Even an investor who bought before the crash, in January of 2007, near the pre-Great Recession highs would have earned an annualized return of 7.33%, including the reinvestment of dividends. So, what’s with the title, you might ask? Clearly stocks have soared.

I posit that the surging valuations of stocks during this period, along with those of other financial and real assets such as real estate, all bonds, leveraged loans, etc., have very little to do with the resurgence of the economy and say very little positive about circumstances. Instead, the significantly increased valuations have much more, if not entirely to do with the fact that we are measuring these things in dollars.  But fo…

We, The Deplorables

I recently saw a German movie called “Look Who’s Back” on Netflix, which I strongly recommend.  The film fictionally chronicles the return of Adolf Hitler to modern-day Germany and does a tremendous job of illustrating how Hitler’s call to arms for a better Germany for Germans resonates with the average German in the film. It cannot be lost on anyone who views this film that the message repeatedly heard from these average Germans that “what he says is mostly true…” is a frightening one, and one that is easy to imagine not only Germans saying but French, British, and Americans too.

Momma Fed – Another Overprotective Parent

Imagine a kindergarten child who tells his mom that he has been punished by his teacher for misbehaving in class and, the mom shows up in school the next day to override the teacher and avert the punishment. Imagine that same thing happens over and over, as the child stumbles and the parent rescues him from any form of suffering. What will that child have learned about the concept of cause and effect? Not much, really, except that there are no negative consequences regardless of performance.

The Price of Societal Dishonesty

We have all heard the label “Political Correctness,” or its abbreviated form “PC.” It is a term used to describe the state of a society that inhibits the use of certain language or certain behaviors that it deems to be “incorrect,” or perhaps better said – offensive. The concept of political correctness has been with us for some time now, maybe tracing its roots back to the 60’s when the fight against discrimination took off in America, but it has clearly picked up steam big time in the past decade or so. In fact, we now see PC warriors – those who are militant – fighting to repress any group who might express views that they deem to be distasteful.  The incredible irony is that a movement that sought to enhance freedoms of those who were thought to be downtrodden or discriminated against by society, is now itself committed to extinguishing the freedom of others.

The Essentials of Entrepreneurship

I recently attended a board meeting and was asked to share some thoughts on entrepreneurship.  As I did, it dawned on me that these insights, gleaned from 35 years of experiences and observations, might be of some value, and thus have decided to publish them here.

There are several traits that I suppose one would identify as being typical, if not essential, for successful entrepreneurship. You will note that numerous of these are related, if not overlapping.  These include:

The End of The Financial Supercycle

Since I graduated college nearly 35 years ago the yield on the 10-Year U.S. Treasury bond has declined from near 16% to today’s 2%-2.5% trading range level, and this tells an important story. The massive decline in yields on all financial instruments during this period, which I will call a “Financial Supercycle”, and the concurrent expansion of multiples and thus valuations, has led to massive wealth creation which has served to bolster the overall economy by literally infusing trillions of dollars of capital in the form of both found money (gains) and loans (recycled savings). In that same time, the field of finance and investments was red hot, growing dramatically in size and expanding in a multitude of ways, spurred by an abundance of creativity that spawned new ways to borrow and new ways to invest.  Innovations that have been introduced during this time and have heightened and broadened access to capital include entire financial markets such as the junk bond/high yield bond marke…