Posts tagged ‘Charlie Rose’

Shoot First and Ask Later?

The financial markets have been hit by a tsunami on the heels of idiotic debt negotiations, a head-scratching credit downgrade, and slowing economic data after a wallet-emptying spending binge by the government. These chain of events have forced many investors and speculators alike to shoot first, and ask questions later. Is this the right strategy? Well, if you think the world is going to end and we are in a global secular bear market stifled by a choking pile of sovereign debt, then the answer is a resounding “yes.” If however, you believe the blood curdling screams from an angered electorate will eventually influence existing or soon-to-be elected politicians in dealing with the obvious, then the answer is probably “no.”

Plug Your Ears

Anybody that says they confidently know what is really going to happen over the next six months is a moron. You can ask those same so-called talking head experts seen over the airwaves if they predicted the raging +35% upward surge last summer, right after the market tanked -17% on “double-dip” concerns and Fed Chairman Ben Bernanke gave his noted quantitative easing speech in Jackson Hole, Wyoming. I’m still flicking through the channels looking for the professionals who perfectly envisaged the panicked buying of the same downgraded Treasuries Standard and Poor’s pooped on. Oh sure, it makes perfect sense that trillions of dollars would flock to the warmth and coziness of sub-2% yielding debt in a country exploding with unsustainable obligations and deficits, fueled by a Congress that can barely blows its nose to a successful negotiation.

The moral of the story is that nobody knows the future with certainty – no matter how much CNBC producers would like you to believe the opposite is true. Some of the arguably smartest people in the world have single handedly triggered financial market implosions. Consider Robert Merton and Myron Scholes, both renowned Nobel Prize winners, who brought global financial markets to its knees in 1998 when Merton and Scholes’s firm (Long Term Capital Management) lost $500 million in one day and required a $3.6 billion bailout from a consortium of banks. Or ask yourself how well Fed Chairmen Alan Greenspan and Ben Bernanke did in predicting the credit crisis and housing bubble.

If the strategist or trader du jour squawking on the boob-tube was really honest, he or she would steal the sage words of wisdom from the television series secret agent Angus MacGyver who articulated, “Only a fool is sure of anything, a wise man keeps on guessing.”

Listen to the “E”-Word

If you can’t trust all the squawkers, then whom can you trust (besides me of course…cough, cough)? The answer is no different than the person you would look for in other life-important decisions. If you needed a serious heart by-pass surgery, would you get advice from a nurse or medical professor, or would you listen more closely to the top cardiologist at the Mayo Clinic who performed over 2,000 successful surgeries? If you were looking for a pilot to fly your plane, would you prefer a 25-year-old flight attendant, or a 55-year old steely veteran who has 10 million miles of flight experience? OK, I think you get the point…legitimate experience with a track record is key.

Unfortunately, most of the slick, articulate people we see on television may look experienced and have some gray hair, but the only thing they are experienced at is giving opinions. As my great, great grandmother once told me, “Opinions are a dime a dozen, but experience is much more valuable” (embellished for dramatic effect). You are better off listening to experienced professionals like Warren Buffett (listen to his recent Charlie Rose interview), who have lived through dozens of crises and profited from them – Buffett becoming the richest person on the planet doesn’t just come from dumb luck.

If you are having trouble sleeping, you either are taking too much risk, or do not understand the nature of the risk you are taking (see Sleeping like a Baby). Things can always get worse, and the risk of a self-fulfilling further decline is a possibility (read about Soros and Reflexivity). If you are determined to make changes to your portfolio, use a scalpel, and not an axe. The recent extreme volatility makes times like these ideal for reviewing your financial position, goals, and risk tolerance. But before you shoot your portfolio first, and ask questions later, prevent a prison sentence of panic, or your financial situation may end up behind bars.
[tweetmeme source=”WadeSlome” only_single=false https://investingcaffeine.com/2011/08/20/shoot-first-and-ask-later/%5D
Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper.

www.Sidoxia.com

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at the time of publishing SCM had no direct position in MHP, CMCSA, or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

August 20, 2011 at 2:53 pm 1 comment

Groupon: From $0 to $6 Billion in 26 Months

Click Here to View Interview

Between football and basketball television viewing, along with non-stop eating, I have found little time to update Investing Caffeine. However, between Oreo and eggnog curls I did find time to plop on the couch and watch an interesting interview with Groupon CEO, Andrew Mason. This is the internet-based coupon company that started operations in November 2008 and has already grown to 40 million members (adding 3 million per week). Within 26 short months, Groupon has already established a presence within 35 countries and supposedly garnered a $6 billion takeover offer from Google (GOOG).

Regardless of whether Groupon becomes a multi-billion division of Google, I’m certain Mr. Mason’s wallet has grown fatter over this year, just as I sit down for another 4,000 calorie, belt-busting, holiday meal.  Happy viewing and Happy New Year!

Related Article: Valuing Facebook & Twitter  

Wade W. Slome, CFA, CFP® 

Plan. Invest. Prosper. 

www.Sidoxia.com

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds and GOOG, but at the time of publishing SCM had no direct position in Groupon, KFT, or any security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

December 27, 2010 at 12:35 am 1 comment

Friedman Looks to Flatten Problems in Flat World

Perhaps Friedman could use Gallagher's "Sledge-O-Matic?"

Thomas Friedman, author of recent book Hot, Flat, and Crowded and New York Times columnist, combines a multi-discipline framework in analyzing some of the most complex issues facing our country, from both an economic and political perspective. Friedman’s distinctive lens he uses to assimilate the world, coupled with his exceptional ability of breaking down and articulating these thorny challenges into bite-sized stories and analogies, makes him a one-of-a-kind journalist. Whether it’s explaining the history of war through McDonald’s hamburgers, or using the Virgin Guadalupe to explain the rise of China, Friedman brings highbrow issues down to the eye-level of most Americans.

In his seminal book, The World is Flat, Friedman explains how technology has flattened the global economy to a point where U.S. workers are fighting to keep their domestic tax preparation and software engineering jobs, as new emerging middle classes from developing countries, like China and India, steal work.

The Flat World

In boiling down the recent financial crisis, Friedman used Iceland to explain the “flattening” of the globe:

“Fifteen British police departments lost all their money in Icelandic online savings accounts. Like who knew? I knew the world was flat – I didn’t know it was that flat…that Iceland would become a hedge fund with glaciers.”

The left-leaning journalist hasn’t been afraid to bounce over to the “right” when it comes to foreign affairs and certain fiscally conservative issues. For example, he initially full-heartedly supported George W. Bush’s invasion of Iraq. And on global trade, he has a stronger appreciation of the economic benefits of free trade as compared to traditionally Democratic protectionist views.

Calling All Better Citizens

In a recent Charlie Rose interview, Friedman’s patience with our country’s citizenry has worn thin – he believes government leaders cannot be relied on to solve our problems.

When it comes to the massive deficits and foreign affair issues, Friedman comes to the conclusion we need to cut expenses or raise taxes. By creating a $1 per gallon gasoline tax, Friedman sees a “win-win-win-win” solution. Not only could the country wean itself off foreign oil addiction from authoritarian governments and create scores of new jobs with E.T. (Energy Technologies), the tax could also raise money to reduce our fiscal deficit, and pay for expanded healthcare coverage.

It’s fairly clear to me that government can’t show the leadership in cutting expenses.  Since cutting benefits for voters won’t get you re-elected, taxes most certainly will have to go up. Wishful thinking that a recovering economy will do the dirty, debt-cutting work is probably naïve.  If forced to pick a poison, the gas tax is Friedman’s choice.  I’m not so sure the energy lobby would feel the same?

Political gridlock has always been an obstacle for getting things done in Washington. Technology, scientific polling, 24/7 news cycles, and deep-pocketed lobbyists are only making it tougher for our country to deal with our difficult challenges. Regardless of whether Friedman’s gasoline tax is the silver bullet, I welcome the clear, passionate voice from somebody that understands the challenges of living in a flat world.

Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper. 

DISCLOSURE: Sidoxia Capital Management (SCM) owns certain exchange traded funds (BKF, FXI) and has a short position in MCD at the time this article was originally posted. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

November 30, 2009 at 2:00 am 3 comments


Receive Investing Caffeine blog posts by email.

Join 1,794 other followers

Meet Wade Slome, CFA, CFP®

More on Sidoxia Services

Recognition

Top Financial Advisor Blogs And Bloggers – Rankings From Nerd’s Eye View | Kitces.com

Wade on Twitter…

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Share this blog

Bookmark and Share

Subscribe to Blog RSS

Monthly Archives