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May 28, 2017 | The Great Reset, Part Two

“Premature optimization is the root of all evil…” – Donald Knuth, from his 1974 Turing Award lecture This is the second of two letters that I think will be among the most important I’ve ever written. These letters set out my philosophy about how we have to invest in the coming days and years. They […]

May 22, 2017 | The Great Reset: How Should We Then Invest?

“A speculator is one who runs risks of which he is aware, and an investor is one who runs risks of which he is unaware.” – John Maynard Keynes “The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a […]

May 15, 2017 | How to Drink from a Firehose

Basic economics tells us all resources are scarce, but our demand for them is not. Hence we need methods to allocate the limited supply of each resource. A significant part of economics is the study of those methods. One exception to the rule, though, has developed in the last few years: The amount of information […]

May 7, 2017 | Angst in America, Part 7: The Angst of the Millennial Generation

“Being young and having no job remains stubbornly common. Wages for young people fortunate enough to get a job have gone down. Inflation-adjusted wages for young high school graduates were 11 percent higher in 2000 than they were more than a decade later, and inflation-adjusted wages of young college graduates (four years only) have fallen […]

May 1, 2017 | Angst in America, Part 6: Middle Class Blues

“We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared; for, after all, we have nothing to lose.” – George Orwell “A strong, educated middle class is what made America the greatest […]

April 23, 2017 | Angst in America, Part 5: The Crisis We Can’t Muddle Through

“The ship of democracy, which has weathered all storms, may sink through the mutiny of those on board.” – Grover Cleveland, the 22nd and 24th president of the United States “It is your concern when your neighbor’s wall is on fire.” – Horace “The biggest mistake investors make is to believe that what happened in […]

April 17, 2017 | Angst in America, Part 4: Disappearing Pensions

“Companies are doing everything they can to get rid of pension plans, and they will succeed.” – Ben Stein “Lady Madonna, children at your feet Wonder how you manage to make ends meet Who finds the money when you pay the rent? Did you think that money was heaven sent?” – “Lady Madonna,” The Beatles […]

April 9, 2017 | Stock Market Valuations and Hamburgers

“To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying […]

April 3, 2017 | Angst in America, Part 3: Retiring Broke

“The trouble with retirement is you never get a day off.” – Abe Lemons “Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples.” – George Burns “To be, or not to be, that is the question: Whether ’tis nobler in the mind to suffer The slings and arrows of outrageous fortune, […]

March 28, 2017 | Men Without Work

I have been promising a review of Nicholas Eberstadt’s very important book, Men Without Work: America’s Invisible Crisis. The book is relatively short at 216 pages, but it is packed with meaty facts and insights. One of the reasons I seldom read an actual physical book anymore is because I can highlight text and make […]

March 20, 2017 | Angst in America, Part 1: Aimless Men

“America was not built on fear. America was built on courage, on imagination and an unbeatable determination to do the job at hand.” – Harry S. Truman “Unemployment is a weapon of mass destruction.” – Dennis Kucinich “Ever since 2000, basic indicators have offered oddly inconsistent readings on America’s economic performance and prospects. It is […]

March 9, 2017 | Tax Reform: The Good, the Bad, and the Really Ugly — Part Five

“A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform” – Russell B. Long “Corporate tax reform is nice in theory but tough in practice.” – Andrew Ross Sorkin “I hold it that a little rebellion, now and then, is a good thing, and as necessary in […]

March 1, 2017 | Tax Reform: The Good, the Bad, and the Really Ugly—Part Four

“The values to which people cling most stubbornly under inappropriate conditions are those values that were previously the source of their greatest triumphs over adversity.” – Jared Diamond, Collapse, 2005 Tax reform means, “Don’t tax you, don’t tax me. Tax that fellow behind the tree.” – Russell B. Long, Democratic Senator from Louisiana, longtime chairman […]

February 19, 2017 | Tax Reform: The Good, the Bad, and the Really Ugly—Part Three

“We have a system that increasingly taxes work and subsidizes nonwork.” – Milton Friedman “You must be the change you wish to see in the world.” – Mahatma Gandhi “Real change requires real change.” – Former Speaker of the House Newt Gingrich Today we come to part 3 of my tax reform series. So far, […]

February 13, 2017 | Tax Reform: The Good, the Bad, and the Ugly, Part Two

“Taxation is the price we pay for failing to build a civilized society.” – Mark Skousen “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan Taxation is almost never […]

February 7, 2017 | Tax Reform: The Good, the Bad, and the Ugly — Part One

Vizzini: He didn’t fall?! Inconceivable! Inigo Montoya: You keep using that word. I do not think it means what you think it means. – From The Princess Bride “A tariff is a scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.” – Ambrose Bierce “Vast possibilities matured into realities […]

January 30, 2017 | Post-Real Economics

“Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.” – John Maynard Keynes “Simplicity does not precede complexity, but follows […]

January 22, 2017 | What I Learned in Washington DC

I have been in Washington DC for the last three days. The ostensible reason was to participate in a board meeting of a public company, Ashford Inc. (AINC). We manage hotel REITs that own three hotels here in DC, and the group decided to move our board meeting up a few weeks and hold it […]

January 15, 2017 | Forecasting with Friends

“The best way to predict the future is to create it.” – Peter Drucker “Do not dwell in the past, do not dream of the future. Concentrate the mind on the present moment.” – Buddha Forecasting the New Year is a curious tradition. Much evidence suggests that no one does it both accurately and consistently, […]

January 9, 2017 | 2017 Forecast: Skeptically Optimistic

“Quantity is being confused with abundance and wealth with happiness.” – Tom Waits “The shift from sailing ships to telegraph was far more radical than that from telephone to email.” – Noam Chomsky One might think that all our newfangled technology would make forecasting the future a little easier. I read just last week that […]

January 2, 2017 | What Could Go Wrong?

“Experience is simply the name we give our mistakes.” – Oscar Wilde “Mistakes are the usual bridge between inexperience and wisdom.” – Phyllis Theroux “Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.” – […]

December 19, 2016 | As the Fed Turns

“Monetary policy has less room to maneuver when interest rates are close to zero.” – Ben Bernanke “Many Americans rely on interest income from their savings to help cover their cost of living.” – John Delaney When I was growing up – and until I was well into my 60s, in fact – one of […]

December 13, 2016 | The Trump Rally Will Morph

“Price is what you pay. Value is what you get.” – Warren Buffett “There is no safe store of value.” – Alan Greenspan “In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.” […]

December 4, 2016 | A Big Swirling Italian Mess

“Move to Italy. They know about living in debt: They don’t care.” – John Lydon “Italians were eating with a knife and fork when the French were still eating each other.” – Mario Batali Italians are headed to the polls this Sunday (and thus this letter is reaching you a little earlier than usual) – […]

November 21, 2016 | What Should Trump Do?

“The problems of victory are more agreeable than those of defeat, but they are no less difficult.” – Winston Churchill “Crying is all right in its way while it lasts. But you have to stop sooner or later, and then you still have to decide what to do.” –  C.S. Lewis, The Silver Chair “I must […]

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