Investment Guru Stock Tips and Expert Advice

I write this letter on my way home from Steamboat Springs, Colorado, where I spoke to the fascinating “GoBundance” group of mostly young, successful, enthusiastic entrepreneurs. Before that I was in Grand Lake Stream, Maine, for the Camp Kotok economics/fishing retreat. I’ll have some details for you later. Today we will look back a few months to a Strategic Investment Conference presentation that truly affirms my optimistic outlook for both business and humanity. Read more.

Change happens quickly and, often, unpredictably. And as we will see, the unpredictable part is actually a mathematical principle. As in the Hemingway quote above, not just bankruptcy but change also happens slowly and then, seemingly, all at once. It’s time passing without change that causes the worst problems, including some historic economic catastrophes. It turns out we shouldn’t just accept change; we actually need it. Read more.

Back in early February of 2020, I noted that, even as the major stock market indexes had pushed to new highs, a number of Hindenburg Omens had been triggering on the NYSE and the Nasdaq pointing to a significant deterioration in breadth: “While an individual signal has very little value in forecasting a stock market crash… a cluster of signals can be valuable in that it signals a pattern of dispersion that is not compatible with a healthy uptrend.” In other words, where there’s fire (flames in the chart below) there’s smoke (a warning signal). The following six weeks of stock market action proved the value of this sort of signal yet again. Read more.

Great news: The US economy is officially out of recession. We know this because the National Bureau of Economic Research’s official recession-calling committee said so this week. The economy has been in an expansion phase since last April, making this the shortest recession on record at only two months. The NBER committee always makes these calls in hindsight—both the beginning and end of recessions. Literally everyone could see the economy coming to a halt in March and April. The signs weren’t subtle. Yet it wasn’t until June 8, 2020, that they said the economy had peaked in February, marking the recession’s onset. I don’t blame them for waiting to see the data, though. Caution is appropriate on these things. Read more.