You’ll recall it wasn’t too long ago that investing legends Warren Buffett, Jack Bogle, and my father in law Dick Young were calling for a prolonged period of reduced returns. Not only for the stock market but for bonds, as Dick Young’s North Star was scraping the bottom of the charts as if it had fallen out of the sky. At the time, Dick Young wasn’t predicting a pandemic like the coronavirus, he was simply studying what was in front of him just like he does today, and concluding that it looked pretty darn ugly. You see, when the risk-free rate of return costs you money (after … [Read more...]
Coronavirus Infects Stock Market
Coronavirus Infects Stock Market: Part XIV
Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told CBS News' Norah O'Donnell that life may not get back to normal for up to two months. Two months is a long time. Here's a bit of the back and forth between O'Donnell and Fauci: O'DONNELL: We know the symptoms of COVID-19 are dry cough, fever and shortness of breath. If someone has those symptoms, should they go to the emergency room? FAUCI: No, thank you for the question. They should stay home, call the health care provider, call their physician or even call the emergency room and say, these … [Read more...]
Coronavirus Infects Stock Market: Part XIII
"De-densify." That's the word Harvard is using to describe its efforts to move people out of dorms and send them home. CNN's Carma Hassan and Brian Ries report: Harvard University is moving to virtual classes because of the novel coronavirus outbreak and the university is asking students to move out of their dorms in five days, according to university spokeswoman Rachael Dane. "Harvard College students have been asked to move out of their Houses and First-Year Dorms by Sunday, March 15, in an effort to de-densify our community," Dane told CNN in an email. All academic courses will … [Read more...]
Coronavirus Infects Stock Market: XII
If you’re a client of Richard C. Young & Co., then you know how much we love Baby’s Coffee—Southernmost Coffee Roasters in America. Clients of mine sent this pic yesterday telling me how much they enjoyed a recent trip to Key West. They look happy, don’t they? You know what’s worth noting is we didn’t spend a ton of time talking about the market today (Monday), even with it being shut down after opening down more than 7%. We talked about it, no doubt, but we had more fun talking about stone crab claws and their beautiful Airstream. Talk about timeless. You and I know the future is … [Read more...]
Coronavirus Infects Stock Market: Part XI
One of the challenges of having high school kids in different schools is scheduling—they’re not on the same one—which is how Owen and I ended up skiing Friday at Attitash, NH, while Izzy was in school. My parents spend much of their winter in New Hampshire skiing (it’s early Saturday morning as I’m writing to you), and we had a great day together yesterday on the slopes. Part of the reason Owen and I had to get up to our cabin was to bring our gear back home for our trip out west later this month. If you’re a ski family, you tend to gather a lot of ski gear. As I rummaged through my … [Read more...]
Coronavirus Infects Stock Market: Part X
When I was a junior in high school I spent a week as a crewmember on a schooner. One of my duties was taking a shift each night on watch. On calm nights it was pretty peaceful. But less so when the wind was up and the white caps lashed against the hull. On nights likes these, you had a more purposeful walk to the bow to check the anchor line. Our captain made the night watch a priority no matter the weather. I learned a lot from his seriousness and expertise. If you were to listen to the so-called experts, you would have sold your bonds a long, long time ago. Don’t listen to them. … [Read more...]
Coronavirus Infects Stock Market: Part VIII
You know about my desire for you to find the shelter and space you deserve. Somewhere away from the hustle and bustle of crowds. Whether you find that peace of mind in, the burbs, small-town America, a resort, or whatever is your idea of paradise, the key is to remember that, yes, it can be done. What is my definition of paradise? Well, a simple back of the napkin question is this: Can you have your own flagpole? Simple yet meaningful. As I told you in Part IV of this series, my client won the real estate arbitrage game when he decided to buy his little slice of heaven. Little, … [Read more...]
Coronavirus Infects Stock Market: Part VII
Imagine missing Monday’s 1300-point gain if you sold your stocks Friday. It happens, especially when emotions run high and takeover your portfolio. Don’t let that be you. This could be a long row ahead. Nobody knows the future. You’re going to wonder if you’re on the right course. That’s normal. Don’t believe everything you’re told. I imagine you’ll probably meet someone who will tell you he sold his stocks at the top and got back in at the bottom. Lucky you! You’ll be talking to a real-life unicorn. Take a picture for your grandkids. As a side note, I want to talk to you … [Read more...]
Coronavirus Infects Stock Market: Part VI
You’ve read about low bond yields. Well, the yields may be low, but bonds, they’ve protected portfolios like bubble wrap. (See the chart of Counterbalanced Total Returns below for the returns of bonds in years when the stock market has fallen). What investors forget time and time again, is that the key to investing is for you to get your money back. Not some of it—all of it. The income from interest on bonds, the dividends from stocks—they help you not only do that but also help you maintain your lifestyle. A lifestyle where you continue to do the things that matter to you like visit … [Read more...]
Coronavirus Infects Stock Market: Part V
You want to do what you’ve dreamt about, right? Well, a client of mine is doing just that while on sabbatical, as he cleans up his gardening shed, and spends more time helping his parents get their estate in order. He’s doing the things we always think about but have a hard time actually doing. We laughed as I told him my clean garage thanks him for the inspiration. One of the topics we covered during our conversation was “the greater fool theory of investing”—how investors believe someone will buy their stocks at a higher price. That’s a sucker’s game. That’s not investing, and right now … [Read more...]
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