Blog Archives

The Omniscient Yield Curve: My Belief in Variable Rate Loans

Omniscient Yield Curve

The future is clearly unknowable other than the certainty of our demise. All we can do is to utilize our knowledge and experience to assess when we think the odds are in our favor or against us and take action accordingly. Everything comes down to risk and reward,

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The Discipline of Lee Kuan Yew – Transforming Wealth Into Well Being

Lee Kuan Yew

On my recent trip, I visited 10 countries in Africa and Asia. My last destination was Singapore. I had been there in 1999 and remember how impressed I was with the city-state then and departed this time even more so. Singapore became an independent state after being kicked out of the Malaysian Federation in 1965.

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Courage & Choosing Life – The Legacy of Nelson Mandela

South African Selfie

“It did not really matter what we expected from life, but rather what life expected from us. We need to stop asking about the meaning of life, and instead to think of ourselves as those, who were being questioned by life-daily and hourly. Our answer must consist,

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The Ever Growing Importance of Ideas

ideas

As property values have escalated greatly in major cities, particularly with a tech orientation, I ask myself if secondary markets make more sense as the cost of living is cheaper and yields are initially higher. The tradeoff historically has been far less growth potential and lower appreciation.

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Long-Term Thinking & Timeless Principles for Successful Investing

We are coming up on our 2018 Annual Investor Meeting. This week’s blog is a look back at my 2017 speech focusing on the principles that have served CWS well over the years. You can enjoy the video and or read the highlights below. Here’s a modified transcript of my keynote:

Each year we do an annual report and this year the cover is timeless principles the artwork shows some of the parables that cover these timeless principles of long-term thinking.

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Trumpling on the Dollar

dollar

Maybe I’m writing about the dollar because I’m traveling abroad soon so it affects my pocketbook. It could also be due to the rather shockingly overt talking down of the dollar by Treasury Secretary Steve Mnuchin in Davos.

Mnuchin in Davos Dollar

“Obviously a weaker dollar is good for us as it relates to trade and opportunities,”

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A Week in the Life of Schizophrenic Bond Investors

Schizophrenic Bond Investor

What a difference a week makes. Last week I wrote about how the Fed starting to unwind its balance sheet shouldn’t cause us much worry in terms of triggering a meaningful increase in interest rates. Of course, yields spiked higher over a few days to seemingly contradict my sanguine outlook.

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The End of QE I, II, & III – The Fed Portfolio Reduction

Fed reduces bonds

The Fed’s balance sheet is comprised of approximately $2.5 trillion in Treasury securities and $1.8 trillion in mortgage backed securities.  The following graph shows how its balance sheet has grown since 2009 through 2014 when it stopped its bond-buying program.

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Housing – Is It The Best Long-Term Investment?

housing long-term investment

In some ways, it is understandable why the subprime meltdown took place. Prior to 2006 home prices in the United States in the post World War II era rarely, if ever, declined materially on a sustainable basis. Based on this rearview mirror modeling investors in mortgages were led to believe that default rates would be manageable and if they did default then losses would be negligible because recovery rates would be strong because home prices kept rising.

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What Will High-Income Blue Staters Do? New Tax Regime

high income new tax laws

Now that there is a new tax regime in place I thought I would discuss it one more time with some additional thoughts. It does appear that while most parts of the country will not be significantly impacted by the mortgage interest deduction being reduced to $750,000 for future home purchases,

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