Lenk Ladner Investment Solutions
Market Commentary
4th Quarter 2020
“Plus ca change, plus c’est la meme chose.” Jean-Baptiste Karr – French critic, journalist and novelist. (English version – The more things change, the more they remain the same.)
No Change – The atmosphere in our nation’s capital remains toxic. Many voters believed if they were able to replace President Trump we would have a chance to experience the unity promised by President Biden during his campaign. This hope has already been dashed. In spite of the declarations of our new President to be a President for all the people as well to reach out to members on the other side of the aisle in Congress, his actions contradict his words. Read More
3rd Quarter 2020
“What lies behind us and what lies before us are tiny matters compared to what lies within us.” Ralph Waldo Emerson
Dark Skies Loom – A hotly contested Presidential election will be completed in one week, yet unlike the historical norm the results may not be finalized for days or even weeks after election day. Indeed, there is a distinct possibility there will be legal challenges to the counting and validity of the unprecedented volume of mail-in and early ballots. To add to the tension surrounding the election, both campaigns have been disrupted by the country’s efforts to cope with the devastating effects of the Covid-19 virus. Read More
2nd Quarter 2020
“The skies look grimly. And threaten present blusters.” – William Shakespeare, The Winter’s Tale
Storm Clouds Gathering – Some early forecasts indicated this year’s hurricane season might be much more intense than has been experienced in recent years with as many as three or four major storms impacting several of the usually vulnerable coastal areas of the U.S., particularly in the southeast. These are some of the same areas currently coping with serious Covid-19 outbreaks. Read More
1st Quarter 2020
“The only thing to fear is fear itself.” Franklin D. Roosevelt
A Rude Awakening – Chicken Little was finally right. For investors, the sky did fall in the first quarter of 2020. As the coronavirus threat became clearer, investors rushed for the exits and the result was not pretty. According to an April 6 Wall Street Journal column, Quarterly Monitor, “the average U.S. stock fund fell 24.6%, mostly because of a 17.1% rout in March. Although the rapid spread of the virus began to gradually impact the psyche of the consumer, investors acted without hesitation by selling with abandon. Read More
4th Quarter 2019
“The only thing to fear is fear itself.” Franklin D. Roosevelt
China Redux – The whole world is on alert as China attempts to snuff out the quickly spreading coronavirus, which has already infected more than 100,000 worldwide, the vast majority, in that country. It has surfaced in a growing list of other countries as well. Health officials everywhere are focused on attempting to nip it in the bud. This health crisis has quickly surpassed China’s previous economic confrontation with the United States as the primary challenge to the world’s continued economy growth. Read More
3rd Quarter 2019
Politics and Economics – Impeachment and Tariffs – The final quarter of 2019 has arrived and the atmosphere in Washington D.C. has assumed the tone of a daily soap opera. The political episodes feature either Speaker of the House Nancy Pelosi with her various House committees attempting to convince the public the President should be impeached or the President tweeting ceaselessly that it is just another unwarranted witch hunt. Read More
2nd Quarter 2019
Politics and Economics – Oil and Water – History shows rulers and politicians are driven by the quest for power. Once they have attained power, they are prepared to go to great lengths to ensure they are able to retain it. While many rulers have used their power to subjugate their people, politicians today resort to more indirect practices to achieve similar ends. Few politicians even attempt to determine how their decisions affect the economy. A prime example is entitlements. Read More
1st Quarter 2019
The Beat Goes On – “Jobless Rate Hits a 50 Year Low” was the headline in the Wall Street Journal on its weekend edition (May 4-5, 2019)
Economy Cruising – How well has the economy been performing? The National Bureau of Economic Research has reported the country is now in its 119th month of economic expansion. This is more than double the average of past expansions. This positive news was reinforced by the announcement of growth in the first quarter of 3.2%, which was much better than the 1-2% level that was predicted.Read More
4th Quarter 2018
Capitalism Versus Socialism – “Individualism, private property, the law of accumulation of wealth, and the law of competition … are the highest result of human experience, the soil in which, so far, has produced the best fruit.” Andrew Carnegie, Scottish-born U.S. industrialist, philanthropist, The Gospel of wealth, 1835-1919
The Beat Goes On – Patriots win number 6! Another super bowl victory for the Patriots provides a psychological lift for its fans. However, the United States economy and the stock market are in the midst of even longer period of positive movement. It has been nearly ten years since the economy and the market began to recover from the Great Recession.Read More
3rd Quarter 2018
Another Approach to the Holidays – “Money, to some extent, sometimes lets you be in more interesting environments. But it can’t change how many people love you or how healthy you are.” – Warren Buffett
Black Friday – It has arrived. Black Friday is here. Consumers will dutifully break out their credit cards or even old fashioned cash to purchase gifts for family and friends. In the not-too-distant past, retailers of all stripes waited with great anticipation for the Christmas (now referred to as the Holiday Season) rush because for many of them their annual profits depended largely on the magnitude of their sales during the brief span between this day and the first of the New Year.Read More
2nd Quarter 2018
Uncertainty and Strife – “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair….”
– Tale of Two Cities – Charles Dickens
Eye of the Beholder – This country is as beset by uncertainty and division as was France in Charles Dickens’ novel. In the current political environment it is virtually impossible to achieve agreement on any issue of consequence. The country is so divided politically it is difficult for the average person to determine what the truth is or even if it is possible to define truth. Political spin masters have determined they must communicate their truth to their political base.Read More
1st Quarter 2018
Opportunity Knocking? – “The future is never clear; you pay a very high price in the stock market for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.” Warren Buffett, investment manager par excellence.
On a Roll – The performance of the stock indices during the first quarter was unremarkable. In fact, both the Standard and Poor’s 500 and the Dow Jones Industrials provided minor negative returns. A quick change in direction during the last two weeks in April helped to lift the market into positive territory, yet to listen to the commentators on the financial news networks or to read recent market assessments, it would be easy to conclude the bull market had resumed.Read More
4th Quarter 2017
Lulled into Complacency? – “Would you like a ride in my beautiful balloon. We could float among the stars together, you and I. For we can fly.” – Up, Up and Away” by The Fifth Dimension (1967)
Inflection Point? – Investors appear to be experiencing the euphoria of these ballooners brought about by the heady stock market returns over the past five years. Standard and Poor’s 500 index funds have averaged a gain of approximately seventeen percent for the five year period, even with the inclusion of a mere 1.3% return for 2015. The excitement was further fueled by the gains achieved by the major averages in 2017, which ranged from of 20 to 30 percent.Read More
3rd Quarter 2017
Look Before you Leap – “Don’t be the last bear or the last bull standing, let history guide you, be contrary to the crowd, and let the tape tell you when to act.” Jeffrey A. Hirsch, Editor, Stock Trader’s Almanac.
On Cruise Control – Investors have reason to be pleased with this year’s market performance, however there is a sense of unease in the air. Why? The economy continues to hum along with the last two quarters achieving three percent growth for the first time in ten years. Interest rates remain near historic lows. Corporate profitability has exhibited steady growth. Overseas economies have rebounded as have many foreign stock markets. Perhaps the most obvious negative is the contentious political atmosphere and the number one antagonist is our President.Read More
2nd Quarter 2017
Self-Inflicted Wounds – “It’s hurting the average American that we don’t have these right policies … we have become one of the most bureaucratic, confusing societies on the planet.” – Jamie Dimon, Chief Executive Officer of J. P. Morgan Chase.
Leadership Void. – Furthermore, Mr. Dimon declared our elected officials in Washington and the bureaucracy they have created as having little understanding or appreciation of the need for pro-business policies to promote continued growth in the economy. His pointed criticism was a result of what he observed on an overseas work trip. The continuing waves of ineptitude flowing from our nation’s capital reinforce his remarks.Read More
1st Quarter 2017
Doing Our Part – National Tax Freedom Day was April 23. If you include annual federal borrowing (i.e., future taxes owed), it is May 7.
The Ultimate Flip-Flop? Is it possible our President, the consummate wheeler-dealer, has managed to mislead both parties? There has been a rumor of a Trojan horse sighting in Washington. Candidate Trump was able to methodically eliminate all of his Republican opponents because he didn’t act or sound as a typical politician. To achieve his goal of becoming President, Trump displayed a total disregard for Marquis of Queensbury rules.Read More
4th Quarter2016
No Easy Path – “People’s minds are changed through observation and not through argument.” Will Rogers, humorist.
Lesson from Yesteryear – On Halloween Day in 1938, the country was driven into near panic by a radio broadcast of “War of the Worlds.”, which was the brain child of a theatrical neophyte, Orson Wells. The faux newscast, an early version of today’s “fake news”, with Wells acting as the announcer had many in the listening audience convinced the country was being invaded by aliens from another planet.Read More
3rd Quarter 2016
New Administration in January – “Only those who will risk going too far can possibly find out how far one can go.” T. S. Eliot, English poet and essayist
It Is Finally Over – The voters have spoken. Donald J. Trump defied the odds and 98% of the “experts” to win the Presidency over Hillary Rodham Clinton. Down in the polls by double digits with only a few weeks to go, Mr. Trump upped his game with the belief he could neutralize what the Democrats regarded as their solid blue line of support in the old industrial states spread across the mid-west.Read More
2nd Quarter 2016
Election Promises Galore –“More, More, More, How Do you Like It?” by Bananarama (1983)
Stranger Than Fiction – As both political parties struggle to reach the Election Day finish line, many voters remain unimpressed with the choice confronting them. Both conventions have been beset by serious fissures. Trump had to contend with the obstinate Republican establishment and the “Cruzites”, whereas Hillary has had to deflect the objections of the socialist “Bernie-ites”, who threatened an insurrection because of the way the Democrat party treated their leader. Read More
1st Quarter 2016
Election Year Riddle #2 – “The worst form of inequality is to try to make unequal things equal.” – Aristotle
Fight of the Century – Now that everyone (or at least the 53 percent who pay federal income taxes) has contributed to the coffers of Uncle Sam, their attention will now be directed to the elections in November. Although not settled yet, it does appear as though it will be Clinton versus Trump or to political junkies, “The Donald” versus Hillary. This match may well surpass arguably the greatest heavyweight championship fight of all time, which was Muhammad Ali against Joe Frazier. The ring announcer will loudly proclaim to the packed house, “In this corner in the mauve pantsuit with pink gloves – “Prickly Hillary” … and her opponent wearing navy blue shorts, a red top and white gloves – “The Bombastic Don”. Read More
4th Quarter 2015
Election Year Riddle – “Intellect and Emotion are partners who do not speak the same language. The intellect finds logic to justify what the emotions have decided. WIN THE HEARTS OF THE PEOPLE, THEIR MINDS WILL FOLLOW.” (Author’s emphasis) Roy H. Williams – “The Wizard of Ads”
You Said What? As 2015 came to a close, many market commentators were suggesting a better year ahead. A strong stock performance in the fourth quarter occurred almost entirely in the first three weeks of October. Without that brief leap, the Dow and the S&P 500 would have registered nearly double-digit negative returns for the year. As is often the case, experts were projecting the economy to continue on its steady growth trajectory. They predicted a continuation of growth in employment, increases in salaries and wages, and no change in the level of inflation. Read More
3rd Quarter 2015
“Déjà vu”, Part II – “The budget should be balanced, the treasury should be filled, the public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt. People must again learn to work, instead of living on public assistance.” Cicero, 55 BC (Apocryphal)
Repeating History? – This quote cannot be directly linked to Cicero’s writings or his Facebook page, rather a similar quote is found in a 1965 historical novel about him entitled “A Pillar of Iron” by Taylor Caldwell. Although she did extensive translation of his writings, it seems the quote is simply Caldwell’s view of Cicero’s thoughts about Roman governance during his time. The phrase “arrogance of officialdom” does nicely describe the current attitude of our “leaders” in Washington today. Read More
2nd Quarter 2015
“Déjà vu” – “Imitation is the sincerest form of flattery.” – Charles Caleb Colton, 19th Century English cleric and writer
Step Back by the FED – In a desperate attempt to prevent a financial meltdown in the fall of 2008, a team of high government officials led by Federal Reserve (i.e., FED) Chairman Ben Bernanke, Treasury Secretary Hank Paulsen, and New York Federal Reserve President Tim Geithner worked feverishly to devise a plan, which would shore up a financial system on the verge of collapse. Their finger-in-the-dike program was the Troubled Assets Relief Program (TARP). It authorized the expenditure of $700 billion to purchase questionable assets from banks. Although this program helped to prevent a financial meltdown, the economy continued to flounder. In a further attempt to boost confidence, FED Chairman Bernanke initiated a program referred to as quantitative easing. Read More
1st Quarter 2015
Time to Reflect – “Nothing sedates rationality like large doses of effortless money.” – Warren Buffett
A Force of Nature – Prepare to do some mountain climbing. Nepal, a very small Asian country, has recently attracted considerable attention due to a series of highly destructive earthquakes that have befallen the country. The most serious of these tremors caused widespread devastation, especially in the capital city of Kathmandu. It was followed by a number of destructive aftershocks. This was not a total surprise. Geologic experts have known about the potential for such an occurrence in the region for some time due to the tectonic plate formations that exist there. Read More
4th Quarter 2014
For Democracy to Succeed – “The only title in our democracy superior to that of president is the title of citizen.” Louis Brandeis, U.S. Supreme Court Justice
Hope Springs Eternal – A new year brings with it the promise of progress and new accomplishments. Many individuals seek to capitalize on this renew Read More
3rd Quarter 2014
Relief at Last – “Pop, pop, fizz, fizz, oh what a relief it is.” Alka-Seltzer jingle
It’s Over! – Yes, this is a reference to the political campaigning that finally and mercifully has come to an end. The repetitiveness, the persistence, the increasing negativity, and the shallowness have run their course. Does anyone think the $4 billion spent on political ads was money well spent? Now the successful politicians will reveal just how empty their promises were. Read More
2nd Quarter 2014
Secret to Timing the market – “People somehow believe you must buy at the bottom and sell at the top. That’s nonsense. The idea is to buy when the probability is the greatest that the market is going to advance.” Martin Zweig – (fund manager and author of Winning on Wall Street)
How high is up? – It is always exciting to explore new frontiers. Today’s adventure involves exploring the creases and crevices of the mind of an investor. All minds are unique, however it is helpful to understand they share some common traits. Two approaches investors have are the rational and emotional methods for selecting their investments. The talking heads and their guests on CNBC and Bloomberg can be confusing and contradictory with their esoteric banter, yet it can be helpful to determine if the opinions they provide have a justifiable basis. Read More
1st Quarter 2014
Reinventing America – “If you wanted to see the economy go wild, just cut all the regulations in half. We’re in a society where we think all risk can be regulated out. There are just unending interpretations, revisions, legal fees to the sky – when you’re focused on that, you’re not focused on growing and getting new customers.” Sam Zell, well known real estate tycoon (Forbes – May 5, 2014)
It appears investors have been lulled into a sense of complacency by the plodding economy and the gradual advance of equity prices, which has accompanied it. Be aware the bulls (optimists) and the bears (pessimists) are struggling for control of investors’ minds and dollars. The financial media is clearly in the bulls’ camp. They have gone to great lengths to point out how often the Dow Jones Industrials and the Standard and Poor’s 500 have achieved new all-time highs, even if it was by the smallest of margins. Read More
4th Quarter 2013
Be Prepared – Motto of the Boy Scouts of America (BSA) and Do a Good Turn Daily – BSA slogan.
Looking ahead – Investment success requires the insight of the Roman god, Janus, who is portrayed with two faces looking in opposite directions allowing him to observe both the past and the future. Due to the emotional components of investing, fear and greed, investors often find themselves relying too much on what has happened in the past. This is more evident when a market has achieved a peak or a nadir. The former stokes overconfidence as future gains seem certain. Read More
3rd Quarter 2013
Government Seized Up – “We acknowledge our transgressions, our shortcomings, our smugness, our selfishness, and our pride. Deliver us from the hypocrisy of attempting to sound reasonable while being unreasonable.” – Barry C. Black, chaplain of the U.S. Senate, in a morning invocation during last week’s budget battles. (New York Times, October 7, 2013)
Road to No Where – If investors take one lesson from the Punch and Judy show staring the President and the Congress, it is that the financial markets are relieved the charade lasted only two weeks. Once the media-hyped struggle passed, the stock market quickly recovered lost ground. Sadly, no agreement or compromise of consequence was achieved, so we can expect a repeat performance by the same Washington cast early next year. Read More
2nd Quarter 2013
Impressive Start – This summer Cape Cod and the Islands have regained their status as a summer vacation mecca. This region’s return as a popular vacation destination has been highlighted by the return of President Obama and his family to Martha’s Vineyard. Judging by the crowded highways, restaurants and shops, consumer attitudes have improved enough to finally see them break out their credit and debit cards after several years of self-denial. Read More
1st Quarter 2013
Impressive Start – It is always encouraging when a journey starts on a positive note. In spite of a number of concerns, the stock market has started the year with an impressive shot out of the gate. There have not been any new, startling developments to account for this surge rather it is a continuation of the Bernanke rally, which is propelled by easy money and low interest rates. Read More
4th Quarter 2012
Gauntlet Thrown Down – President Obama launched his second term yesterday with a clearly partisan inauguration speech, which was designed to appeal to his liberal supporters. It will also increase the resolve of his conservative opponents. Will even greater polarization be the result? Read More
3rd Quarter 2012
“Forward” or “Believe in America” – One of the men offering these two slogans will be leading the country for the next four years, and the nation decides in less than a week. The contest, at times quite contentious, offers voters a clear choice. Read More
2nd Quarter 2012
A New Contender – Prepare yourself for a little tongue-in-cheek fun. You may even want to try this exercise yourself. I can’t believe it! I have been nominated by the Bull Moose Party to run for the office of President of the United States. What an honor! Read More
1st Quarter 2012
Under the Big Top – Brace yourself, the circus is coming to town. No, it is not the one with live, exotic animals, trapeze artists and clowns. It’s the Republican and Democrat Presidential conventions followed by the bruising political campaign leading up to the decisive vote in November. Read More
4th Quarter 2011
Divination of Stock Market Trends – At the beginning of each year, Wall Street experts appear from every direction to enlighten investors with their expectations and prognostications for the year ahead. Rather than being an exercise, which provides valuable information, it is an opportunity for the soothsayers of Wall Street to impart their wisdom to an anxious and hopeful audience. Read More
3rd Quarter 2011
The Quick Flip – In Wall Street parlance, the quick flip has normally referred to the practice of buying and selling the same security in rapid succession with the intention of garnering a quick profit. In this instance, the quick flip is referring to the rapid change of direction in the stock market from capitulation to unbridled optimism in less than three months time. Read More
2nd Quarter 2011
Deficit Demons Haunt Wall Street – We have been hoodwinked! The Washington ruling class of both political parties and their dependable allies in the media have tried to convince us the legislation to raise the debt ceiling passed by Congress and signed by the President averted a financial catastrophe. Since that notable signing, our stock market has registered a significant decline. Read More
1st Quarter 2011
“There are no exceptions to the rule that everybody likes to be an exception to the rule.” – Malcolm Forbes
Why begin with such an unusual quotation? The country is in a tight spot. The simple truth is the nation’s fiscal affairs are so out of whack, we are all going to be required to make sacrifices. Further complicating the matter, “The Great Recession” is reluctant to depart. Washington has attempted to float the ark of the economy with a flood of stimulus dollars to no avail. Read More