October 13: Daily Contrarian Reads

The Folly of “Get It While You Can” Investing

The limited discussion and consideration of intermediate to longer-term prospects — such as whether we are pulling investment returns forward — may be a technologically influenced event or may be the desire, as Janis Joplin reminded us all, of “getting it while we can.” Or it might be the byproduct of the continuing eight-year bull market in which dips are ever bought. Regardless, current prices always must be measured and judged not only by the next near-term variable (such as interest rates, earnings and the price of oil), but also by the assessment of the intermediate to longer term. And it is the longer term that to me and to some others is where the greatest concerns lie for investors today.

Don’t Buy The Dips!

Dear reader, if you are overcome with fear of missing out on the next stock market move; if you feel like you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor”; then consider this article a public service announcement written just for you.

The Market’s Over the Top By Every Measure—–Buffett, Bogle, Shiller, Tobin

As you will notice, reversions have NEVER resulted in a “sideways” consolidation but rather much more serious, and sharp, declines. These rapid “maulings” of investors is why declines are aptly named “bear markets.”  Lastly, even Warren Buffett’s favorite valuation measure is screaming valuation issues. The following measure is the price of the Wilshire 5000 market capitalization level divided by GDP. Again, as noted above, asset prices should be reflective of underlying economic growth rather than the “irrational exuberance” of investors.

The Real Bob Corker: Warmongering Hypocrite

When Sen. Bob Corker first proposed sending lethal U.S. weaponry to Kiev so that Ukrainians could fight off their nuclear-armed Russian neighbors, no one then warned that the Tennessee Republican’s ideas could hurtle us “toward World War III.” When Corker came within an eyelash of persuading then-President Obama in August 2013 to bomb Syria, “get Assad” and provide aid to “the moderate, vetted opposition,” nobody said that the future Senate Foreign Relations Committee chair should “concern anyone who cares about our nation.”  Now Corker’s enjoying Strange New Respect from the media after plausibly calling President Trump a reckless, lying manchild.

A Huge Health Care Victory For Rand Paul

Pretty much singlehandedly Senator Rand Paul stopped the horrific Cassidy-Graham bill and earlier bills, and moved healthcare more in the direction of free markets.

Five Ways Trump’s Iran Action Invites War

Make no mistake: We do not have a crisis over the Iran nuclear deal. It is working and everyone from Defense Secretary James Mattis and Secretary of State Rex Tillerson to the U.S. and Israeli intelligence services to the International Atomic Energy Agency agree: Iran is adhering to the deal. But President Trump is about to take a working deal and turn it into a crisis – an international crisis that very likely can lead to war. While the decertification of the Iran deal that Trump is scheduled to announce on Friday in and of itself doesn’t collapse the deal, it does trigger a process that increases the risk of war in the following five ways.

Another Aspect of The BLS’ Phony Inflation Numbers—-Anhedonics

While the BLS website makes mention of the possibility that hedonic quality adjustments occasionally go the other way, i.e. quality has declined, it’s clear this almost never happens. “Innovations” are always improvements. I propose we start tracking anhedonic quality adjustments, i.e. significant declines in quality, durability, utility and the pleasure derived from the product or service.

The Posthumous Rothbard—A Devastating Critique of the Progress Era

In an eloquent tribute to Murray Rothbard at the Mises event organized in his honor on October 6 and 7, Joe Salerno observed that his subject is still producing books twenty years after his death. Contrary to the misconception that Murray turned away from scholarship toward political advocacy in his later life, Murray, we are assured, wrote serious works in economics and history up until the end of his life—and then furnished even more food for thought after his death. Murray’s latest posthumous treatise The Progressive Era, which is well over 500 pages, testifies to the truth of Salerno’s observation and to the indefatigability of our deceased friend as a research scholar.

More Retail Meltdowns—-Why Would You Buy IPO Stock From An LBO?

On March 9, 2017, private equity firm TowerBrook, the owner of women’s clothing retailer J. Jill, dumped half of its stake via an IPO at a price of $13 a share into the lap of the unsuspecting public, during a time when brick-and-mortar retailers that are owned by private equity firms are heading into bankruptcy court, one after the other. By Wednesday at close, shares of J. Jill had dropped to just over $10. And then after-hours and today during regular trading, they plunged another 51% to $4.86!

What To Do During The National Anthem—-Take A Walk

Two sides: social justice or embrace the government. I fall on neither side. When I am at an event where the anthem is performed, I don’t stand for the troops and the country, and I don’t kneel for social justice. I either wander in the hallways outside of the main arena or remain seated in my chair.  I do this because I don’t honor the troops; I don’t equate country with government – and I very much protest the government.