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News April 6, 2020

This is Who You Are

Regarding the stock market, “If you don’t know who you are, this is an expensive place to find out.” wrote Adam Smith.  Everyone says they are investing for the long term.  The joke is that “long-term” means only until the next bear market for a lot of people.  Were you a long-term investor on 12/31/2019?  Are you still?  Did you rebalance your portfolio?  Panic sell?  Panic buy?  Just panic, but leave the portfolio untouched?  Or maybe you haven’t looked at the particulars because a three month time period doesn’t mean much to you?  Look at your actions this year.  This is who you are. This is Who I Am After the 4th quarter of 2018 when the market ALMOST dropped 20%, I tweaked my rebalancing approach.  That’s not entirely true.  While I rebalance quarterly if needed, I didn’t have a rebalancing approach for big market drawdowns.  Seat-of-the-pants may have been…

Super Tuesday Meteor

News, Opinion March 4, 2020

Super Tuesday and Re-Branding the Coronavirus

Super Tuesday Joe Biden took control of the Democratic Primaries last night on Super Tuesday.  Bernie Sanders was expected to win California which was supposed to maintain his lead even if Biden managed to close the gap somehow.  It looks like Bernie’s momentum ran out instead.  Joe Biden has taken the lead and it’s difficult to see where Bernie can make up ground.  It looks like markets are responding to this positively.  Who could have seen this coming?  (Just sayin’) Coronavirus It looks like the coronavirus may have been in the United States FOR WEEKS, according to analysis of the virus’s genomes.  Estimating initial infections at mid-January and an incubation period of two weeks, this indicates a strong probability that the cat is out of the bag.  This tells me two things.  One, while it is great to emphasize good hygiene and make the general population more aware of the…

Bearish Investor

Investing, News, Opinion February 28, 2020

Coronavirus Update

Here’s how I see it.  The recovery since 4Q2018 was so smooth that the markets have been looking for a reason to sell off for a while.  Acceleration dropped after 4Q2018 fell off of the 1 year numbers.  The markets hiccuped after news of the coronavirus got really serious at the end of January.  I think the real catalyst for the selloff, though, was Bernie winning Nevada.  I’ve lived through at least two Presidents who were going to destroy democracy and wipe out the stock market.  Everything has turned out fine so far.  Even if Bernie gets elected, America will live.  So I think this is all overblown to some degree.  I was about to say to a ‘great’ degree, but this market pullback isn’t even that deep.  The average year sees a drawdown of 14%.  We had a 20% drop a little over a year ago.  The coronavirus is…

Otter

Investing, News, Opinion February 24, 2020

Coronavirus Fears

Stocks are off by about 3% this morning (as of noon on 2/24/2020) on fears that cases of coronavirus are accelerating outside of China.  Should you worry?  For the “general American public“, the answer is no.  Does that mean that only an idiot would be concerned by this?  No.  Identifying and dealing with threats is how humans have survived as a species.  It’s normal to watch the news, worry, then talk to someone about it. China China’s position as not only a supplier of goods, but also as a newly dominant source of demand for goods is a twist, though.  I will be watching Apple stock as a proxy for this story.  A good amount of Apple stuff is dependent on the Chinese supply chain.  The rising Chinese middle class loves the iPhone.  Also noted is that the ‘Trade War’ between the US and China may have softened the blow…

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News February 21, 2020

The Blog is Back!

MatthewGarrott.com started as an experiment.  I really just wanted to know how a person went about setting up a website.  Turns out, buying a domain is pretty cheap, so why not buy my own name?  From there, I figured I’d at least put up some text or something to figure out the logistics of publishing things on the site.  This was pretty easy, too.  It was so easy that I turned the site into a little blog.  What would happen if I started publishing my thoughts in the interwebs?  Would anyone read?  Would I run out of things to write? Thank You Yes, people started reading my blog.  Thank you for reading.  Not only did they read, but people emailed or reached out via DM to give feedback. I’ve made some changes to the header and tagline for the site.  There’s also a new favicon – that little logo in…

iPhones, IPOs, Interest Rates

Investing, News, Opinion September 12, 2019

iPhones, IPOs, and Interest Rates – The I’s Have It

iPhones, IPOs, Interest Rates Lots of random news today, none of which warrants a full post from me due to either lack of opinion or lack of expertise.  However, here are some places that have worthwhile views on each of these subjects.  Also, don’t forget about the Northeast Ohio PKD Walk on September 21st.  Donate to my team so I can hold bragging rights in my house for the next year.  My son William has his own fundraising page this year, too! The WeWork IPO It’s been hard to avoid news about WeWork.  First as a tech disruptor darling.  Now as fodder for gossip as their IPO plans look shaky.  Personally, I think the founder’s actions and the structuring of the firm tell you all you need to know, but I’m not a stock picking expert.  Professor Damodaran is, however, and he breaks down his view here along with some damning parallels…

PKD Walk

News September 11, 2019

A Gift That Makes a Difference

2019 Northeast Ohio PKD Walk It’s that time of year again!  The 2019 Northeast Ohio PKD Walk is on September 21st.  As usual, Team William will have its walking shoes on.  We’ll trek through the Bedford Reservation and then head back to the Garrott house for hotdogs, burgers, and maybe a beverage or two!  Gotta keep those kidneys hydrated! Our Story My son William was born with a genetic condition called Autosomal Recessive Polycystic Kidney Disease, or ARPKD.  He had both kidneys removed before he was a year old and relied on a special kind of dialysis until he received a donor kidney shortly after his second birthday.  Those first few years were difficult, but I’m happy to report that Will is a happy and healthy fourth grader today.  He plays soccer and takes swimming lessons.  He is the only member of the household looking forward to his playing the…

No Picture

News, Opinion August 22, 2019

What Happened to the Recession?

Last week was recession week as the brief yield curve inversion launched a thousand headlines promising economic destruction.  Every newspaper had a recession headline or story above the fold.  Although there were several days of decent market swings, the recession story seems to have run out of gas as people looked at the actual numbers.  The minutes from the latest Federal Reserve meeting further cooled the rhetoric.  Journalists may have expected the last Fed meeting was Thunderdome as there was some disagreement among Fed members on whether to hike or not.  Instead, the minutes painted a much different view. So what do the minutes from the last Federal Reserve meeting say? Labor is strong and inflation is under control.  The rest of the world is struggling a bit, but it hasn’t made a huge impact on the US economy.  Trade policy uncertainty seems to be here to stay in the…

No Picture

Investing, News, Opinion July 5, 2019

When the Recovery Will End, Emotion, Controversy

When Will the Recovery End? (Spoiler Alert: It’s Already Over) After 10 years, surely the end of the recovery is near?  I still see investment products pitched with this kind of wording.  It turns out that the recovery ended 84 freaking months ago.  Since then, we’ve been in expansion.  84 months sounds like a long time (7 years!), but in the context of previous expansions, it’s not remarkable in either length nor size (there’s a joke here, somewhere).  The expansion following recovery from the tech crash was just 12 months, with a gain of 14.6% on the S&P 500.  However, the two prior expansions were 135 and 134 months long and gained over 400 and 500% (see graphic).  Should we be worried about the current expansion?  Let’s break 100 months first, then three years after that let’s start worrying.  In the meantime, stick to your financial plan. Taking the Emotion…

student loans

News, Opinion June 26, 2019

Student Loans

$1.6 trillion of student loan debt is spread among 44 million Americans.  More than even avocado toast or a daily latte, student loans are being blamed for Millennials not being able to afford housing (even though they are the largest home-buying cohort).  Some Presidential hopefuls say they’ve got the answer in just erasing the whole thing.  This is a case of finding a gullible voting bloc and riding them as hard as possible in the hopes of building a warchest to retire on, securing a book deal, and hitting the speaking circuit.  It is a proposal along the lines of the Green New Deal – not so much a serious piece of legislation as it is something to garner mentions in the media. Cynicism aside, I’d love to see student loans wiped out.  “But isn’t this unfair to people who took out loans and paid them off?”  Maybe, but it…