Archive for the ‘Fisher Investments Analyst Views’ Category

Please, No More “Downside Risks” for Central Planners

June 25, 2013 Leave a comment

If you’re like me, you get annoyed ubiquitously by the clichéd, overused, nonsense, nondescript lingo central bankers, central planners, politicians, and guru economists routinely employ. My current most peevish is “downside risk.” As in, “Currently downside risks for the economy are stronger than a month ago.” Or, “We see downside risk abating in the intermediate term.”

What does this mean? It means nothing. It’s gibberish. In the era where central bankers claim to be more open kimono, what they really are doing is just saying more words. The opacity is the same, as depicted by the current—and bizarre—speculation over “tapering” clogging today’s financial headlines.

When you see this stuff, don’t try to read tea leaves. Just ignore it until there is something concrete to form an opinion.

Thinking Back, Looking Forward

April 17, 2013 Leave a comment

It’s an old adage: Investors have short memories. Another: the market discounts the future.

Here’s some interesting psychological research as to one reason that may be: Yesterday came suddenly

“Because future events are associated with diminishing distance, while those in the past are thought of as receding, something happening in one month feels psychologically closer than something that happened a month ago.”

April 8, 2013 Leave a comment

One of the great illustrators of American myths has died—Carmine Infantino. Many won’t know the name, but it would be almost impossible that one of his images hasn’t passed your eyes at some point or another in your life. Batman, Superman, the Flash…you name them, he left an indelible mark on the American consciousness with his artistry and helped bring the medium forward into more cinematic and dramatically resonant stories.



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Idealism as Economic Heroism

March 22, 2013 Leave a comment

Ayn Rand’s Idealism Explains Her Enduring Success — By CHARLES C. JOHNSON

I admit—freely—often my biggest hang-up with Ms. Rand was that she’s too pure, too idealistic, advocating a worldview not possible in this world. Charles Johnson’s recent IBD piece puts such anxiety to rest.

“My personal life is a postscript to my novels,” she wrote in the afterword to “Atlas Shrugged.” “It consists of the sentence: ‘And I mean it.’ I have always lived by the philosophy I present in my books — and it has worked for me, as it works for my characters.”

Sowell Explains Swaps

February 1, 2013 Leave a comment

Much has been made recently on the movement of swaps to futures markets as a result of Dodd-Frank.

The Dodd-Frank regulatory overhaul sought to reduce risk in the swaps market in part by having as many as possible trade on an exchange where prices and volumes are posted, as well as having trades settled by central clearinghouses that guarantee payments. The CFTC began writing new rules after Dodd-Frank passed in 2010. The rule that took effect in October requires that any entity trading more than $8 billion of swaps a year—whether a financial company like a bank or a hedge fund, or a “commercial user” like an airline or a shipping company—be considered a swaps dealer and be subject to government audits and higher capital levels.

That prospect didn’t sit well with many market participants, including those who were buying and selling swaps on an electronic trading platform run by the IntercontinentalExchange (ICE). Prompted by its customers, ICE took all the energy swaps that had been trading on its electronic marketplace—more than 900 contracts—and used them to create futures contracts that could trade on its futures exchange. So now, instead of creating a customized swap with another trader, an airline that wanted to lock in the price of 1 million gallons of jet fuel at a certain date would buy jet fuel futures contracts created and managed by ICE.

From Bloomberg BusinessWeek’s: This Is What Unregulated Swaps Look Like

Unintended consequence alert! Knowing exactly how swaps would adapt around this kind of thing would be next to impossible; but knowing that they would in fact adapt was possible.

In an increasingly technocratic, “if I pull this lever the economy will do X” type of world, it pays more than ever to read the free market wisdom of Thomas Sowell. Now considered an economic classic, his Knowledge and Decisions is a must read. Known for his clarity of thought and cogency of words (Sowell is an accomplished writer), Knowledge is uncharacteristic of Sowell’s later works—often turgid, plodding, redundant, and overly long. This is more academic exuberance than pithy communication. But the gold is there, and a must read for those pondering how decisions will be made as the world of Dodd-Frank arrives.

“If politicians stopped meddling with things they don’t understand, there would be a more drastic reduction in the size of government than anyone in either party advocates.” – Thomas Sowell

Financial Services Will Get Cheaper, Long-Term

November 27, 2012 Leave a comment

Simply, the long-term cost of financial services is down—technology will see to it. This feature will overwhelm even the politicians’ ability to cause inefficiencies and higher costs.

Million-Dollar Traders Replaced With Machines: Credit MarketsBloomberg Businessweek

Two Kings of the Gilded Age

July 20, 2012 Leave a comment

I consistently lament the decline and fall of oratory. There are few great orators to go and see any longer. Instead, live comedians or stage actors are a good alternative. Two of the great American communicators (by way of speaking and various forms of literature) were Mark Twain and Theodore Roosevelt. They also happened to be rivals, and had vastly different styles of writing and speaking—both extremely popular and successful. It’s worth noting how both men honed styles that fit their personality types—speaking/writing is never a one size fits all proposition. A new book on this topic is a fun way to explore the era, the rivalry, and to also learn about better mass communication. A great summer diversion.

The Two Kings of the Gilded Age – The Wall Street Journal

Mark Twain called Theodore Roosevelt the “most popular human being that has ever existed in the United States “; he also called him “far and away the worst president we have ever had.” Twain made these observations in his autobiography in 1906 but ordered them embargoed for 100 years.

Both were famous orators, and both preached. But Roosevelt ‘s style was direct and often bombastic, exhorting men to live a “strenuous life” and to fulfill their duty to their families and their country. Twain’s approach was sly and slow and full of Southern drawl; he lulled listeners with his pauses and slayed them with his punch lines.

Mr. McFarland has an especially keen ear for Twain’s speeches. He recounts a dinner talk at the Lotos Club in Manhattan just after the November 1900 elections that elevated Roosevelt from governor of New York to vice president. Twain said: “And now, for a while anyway, we shall not be stammering and embarrassed when a stranger asks us, “What is the name of the vice-president?’ [general laughter]. This one is known, this one is pretty well known [pause], pretty widely known [longer pause], and in some quarters [pause] favorably [much laughter over that last].”


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