Timing & trends

The cost of not paying attention to risk can be extraordinarily high

Posted by Lance Roberts

on Tuesday, 9 February 2021 12:05

 

In today’s market, the majority of investors are simply chasing performance.

Ultimately, investing is about managing the risks that will substantially reduce your ability to “stay in the game long enough” to “win.”

Robert Hagstrom, CFA, penned a piece discussing the differences between investing and speculation:

“Philip Carret, who wrote The Art of Speculation (1930), believed “motive” was the test for determining the difference between investment and speculation. Carret connected the investor to the economics of the business and the speculator to price. ‘Speculation,’ wrote Carret, ‘may be defined as the purchase or sale of securities or commodities in expectation of profiting by fluctuations in their prices.’”

Chasing markets is the purest form of speculation. It is just a bet on prices going higher than determining if the price paid for those assets is a discount to fair value.

Historically, such sentiment excesses from around short-term market peaks, not investable bottoms.

Investors miss that while a warning doesn’t immediately translate into a negative consequence, such doesn’t mean you should ignore it.

“There remains an ongoing bullish bias that continues to support the market near-term. Bull markets built on ‘momentum’ are very hard to kill. Warning signs can last longer than logic would predict. The risk comes when investors begin to ‘discount’ the warnings and assume they are wrong. 

It is usually just about then the inevitable correction occurs. Such is the inherent risk of ignoring risk.’”

Full Article

Tesla Recalls Roughly 135,000 Vehicles Over Touch-Screen Failure

Posted by Rebecca Elliott

on Tuesday, 2 February 2021 7:32

 

Tesla Inc. TSLA +4.05% is recalling roughly 135,000 Model S luxury sedans and Model X sport-utility vehicles over touch-screen failures, one of the electric-car maker’s largest-ever safety actions.

The move comes after the National Highway Traffic Safety Administration requested a recall last month, saying the touch screen in some models can fail when a memory chip runs out of storage capacity, affecting functions such as defrosting, turn-signal functionality and driver assistance.

The agency said the problem affected roughly 158,000 vehicles, including Model S sedans built between 2012 and early 2018 and Model X vehicles made from 2016 through early 2018. The recall doesn’t cover vehicles in that group that have already been repaired with a larger memory chip or an upgraded touch screen, according to NHTSA.

Tesla said in a letter to federal regulators made public Tuesday that while it disagreed that the issue constituted a defect in the vehicles, it was going ahead with a recall to conclude the investigation and provide a better experience for customers.

Read More

 

 

 

This Day In Market History: Surgeon General First Warns Of Smoking Hazard

Posted by Elizabeth Balboa

on Monday, 11 January 2021 6:57

What Happened: On this day in 1964, the U.S. government issued its first health warning against cigarettes.

Where Was The Market: The S&P 500 traded around 76.45, and the Dow traded near 766.08.

What Else Was Going On In The World: A pack of cigarettes costs about $1.60, or 1.4 hours of labor for minimum wage ($1.15) workers.

The First Onslaught: The Surgeon General of the U.S. Public Health Service published the first of many advisories on the potential hazards of smoking. A scientific literature review revealed causality between cigarettes and chronic bronchitis, lung and laryngeal cancer in men, and lung cancer in women.

The report sparked yet-ongoing government intervention in the American tobacco industry. Over the course of the next few years, Congress adopted the Federal Cigarette Labeling and Advertising Act of 1965 and the Public Health Cigarette Smoking Act of 1969 to regulate the tobacco industry’s promotional strategies…CLICK for complete article

on Saturday, 2 January 2021 15:20

Protecting the environment was easier when we were richer. Providing opportunities to marginalized people was easier when there were more jobs. Holding our politicians and officials accountable was easier when they did less ruling by decree.

~ William Robson, CEO, CD Howe Institute

The Billion-Dollar New York City Exodus

Posted by Michael Kern

on Tuesday, 22 December 2020 6:53

During the Spanish flu of the early 20th century, people were fleeing big cities trying to escape the virus, just as the wealthy of London did during the 16th-century plague … and just the wealthy of New York City in 2020’s COVID-19 pandemic.  They fled the city and headed to the suburbs, or even more rural areas, with New York Governor Andrew Cuomo warning about the city’s density when it first went into lockdown in March. “There is a density level in NYC that is destructive. It has to stop and it has to stop now. NYC must develop an immediate plan to reduce density,” Cuomo Tweeted.

Similar to many end-of-the-world movies, the pandemic has caused a large number of urban residents to move out of the cities to rural areas or the suburbs…CLICK for complete article