The Philosophical Investor's Blog

Where Do We Go from Here?

stay at home

As states start to open up, economic activity will undoubtedly increase. The S&P 500 is up approximately 26% from its March 23rd low, perhaps suggesting the worst is behind us for now. Of course, the question on everyone’s mind is whether there will be a second wave as more people congregate at work,

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O(y) IL VEY

oil vey

Yet again we have witnessed something unprecedented. As the following two charts show, we have never had negative oil prices until last week. Oil has never been cheaper on an inflation-adjusted basis than it is today.

Cost of a barrel of oil in nominal terms 1870 - 2020

Cost of a barrel of oil in real USD terms 1870 - 2020

Source: Marketwatch

And while under “normal” circumstances this would be great for the consumer,

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I Have Nothing To Add

Warren Buffett Charlie Munger I have nothing to add

Charlie Munger can be extremely loquacious as he is one who loves to pontificate and definitely has something to say. He also knows when to stay quiet. When he and Warren Buffett hold court at Berkshire Hathaway’s annual meeting and a question is asked of Buffett and after answering it he turns to Charlie and asks him if he has anything to add.

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Sabbathing in Place

Sabbath in Place

Our extended sheltering in place has naturally led to a lot of time to think and reflect. I’m a big mindset person which reminds me that I have a choice as to how I frame every situation. When I frame situations as challenges and opportunities versus insurmountable problems then I am much more energized and motivated to fight the good battle to come out the other side stronger and wiser.

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Follow the Herd: Why COVID19 End Game Needs Herd Immunity

Herd COVID_19

I’m not one to typically advocate following the herd but in the case of the coronavirus, I am having a hard time seeing an end game that doesn’t have herd immunity as the ultimate goal. And this could take a long time and lead to a lengthier economic contraction (to put it mildly) and even more massive federal intervention through government spending and Federal Reserve support of financial markets.

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A Leap Over Normality - Our New Abnormal

COVID-19 Abnormal

Last week was a crazy week preparing for rent collections this week as well as going through in great detail the safety precautions we are taking to do our best to keep our employees and residents safe. That is why this blog is shorter than normal.

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This Ain't No Party. This Ain't No Disco. This Ain't No Fooling Around

Quarantine

The title of this blog is from the Talking Heads song Life During Wartime. Maybe I should have called it Life During Quarantine instead but we are definitely on a wartime footing. If you don’t think so then maybe these charts might help convince you as financial markets are the most real-time indicator of investor sentiment and discounting the future to ascertain how investors react to key events.

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Seeing Victoria Falls while the World Is Going Over the Financial Falls

Gary Carmell Rainbow Victoria Falls

My international travels were scheduled to come to an end yesterday. I’m writing this prior to my arrival and assuming that there will be no delays in my return. It was a packed adventure that ended in Israel after visiting Dubai, Abu Dhabi, and Zambia via Lusaka,

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In Zambia Honoring Roneet With an Agricultural Training Center

Zambia Gary Carmell

Overnight, The Saudis decided to ignite a price war which was the catalyst for oil prices crashing, stock futures imploding, and bond yields going through the floor, as reported by Bloomberg, Sunday, March 8, 2020. This was on top of last weeks dramatic drop in interest rates as exemplified by the 10-year Treasury yield dropping below 0.5% for the first time and 30-day Libor collapsing to below 1%,

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COVID-19, Catch-22, Treasury-117

COVID 19 Coronavirus

With over $6 trillion in global stock market losses in one week, it’s clear that investors have woken up to the real risk that the coronavirus is not contained, somewhat akin to the subprime crisis that Ben Bernanke famously said was and led to massive financial losses around the world.

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