Skip to main content


You Need to Ask the Right Question

If you ask the wrong questions, the answers will probably also always be wrong, and even irrelevant.  This might seem obvious, but I’ve noticed that this truth is often completely overlooked, and even by the world’s most intelligent. While I’m certain this is so in every facet of life, for the purpose of this short paper I will focus on the investment/finance world.

Recent posts

Pull The State Income Tax Subsidy

The Trump Administration’s recent tax reform proclamation included an elimination of the deductibility of state income taxes on federal tax returns.  This would be painful for high-income earners who reside in states with higher tax rates, such as California, where I live. Here in California, the top end rate is 13.3%. For high-end earners, the Federal income tax rate is 39.6%. The combination of those two facts, along with a California taxpayer’s ability to deduct his state income tax payments from their federal income tax liability means that the effective state tax burden falls to 8%. The remaining state tax burden of 5.3% is borne evenly by all federal taxpayers, which is to say that citizens of other states pay about 40% of my personal California income tax burden.

While I am genuinely grateful to all of you fine Americans living in other states, and there is surely a part of me that would like to continue to have you subsidize my tax burden, I am wholly supportive of the idea to…

Thank You, Subsidizers

As I look at today’s financial markets I can’t help but notice how many very kind investors there are who are using the financial markets to generously provide wonderful subsidies to the rest of us. And I am embarrassed by how little gratitude they’ve been shown, which is the basis of this blog post – to simply say: “THANK YOU.”

What Is Inflation?

“According to central bankers, inflation is generated by the gap between demand for goods and services and the economy’s ability to supply them.” This is a direct quote from an article that recently appeared in the WSJ, in which central bankers were described at being puzzled over the low rate of inflation that the G-20 has been experiencing. Inflation is a term which has taken on different meanings over time, and which continues to lead to general confusion.

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.

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.