August 4, 2020

Explaining how bank loans work

There are a lot of people, apparently, who don’t understand that when a business owner takes a loan, they are personally on the hook for that loan. And if there is a forgiveness feature, as is the case with the Payroll Protection Program, that forgiveness feature has to be applied for and approved. And if forgiveness is applied for and not approved, or if no forgiveness is applied for, then the individual who owns ...

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A One-of-a-Kind Market Environment

From 1982 through September of 1987, the S&P 500 rose 236% or nearly 24% annually. The index was up more than 50% on a total return basis from the start of 1987 through the end of September of the same year. You know what happened next. The biggest one day crash in history saw stocks fall more than 20% in a single day. Many people at the time worried the crash would lead to depression. I don’t blame them. Yet on...

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How Much of the Bear Market Losses Have Been Recovered?

The speed and turbulence of the stock market’s downturn in February and March was insane. March was the most volatile month since the Great Depression. The move made sense in many ways, though, because of the pain and confusion caused by the pandemic. The speed and explosiveness of the market’s rally since late-March is more of a head-scratcher to many market participants. Much of this recovery can be attribut...

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Thank you

Rather than trying to do this individually, I just wanted to say a huge thank you for the outpouring of support we’ve received from my post about bringing the firm through the coronavirus pandemic so far. We heard from many clients, whose words I can’t reprint here because of the “testimonial rule” but it meant a lot to get their notes and calls. I also heard from business leaders around the countr...

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Animal Spirits: Valuations Don’t Matter

This week’s Animal Spirits with Michael & Ben is supported by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: Does it make sense Zoom is worth more than the 5 biggest U.S. airlines? How many of the pandemic stocks are here for good? When does a Zoom competitor enter the building? Is Spotify ready to take over the podcast game? B...

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International Diversification May Be Closer than You Think

When the U.S. dollar declines, investors think more about international diversification. This can be accomplished by many different means such as buying a foreign stock, buying an ADR of a foreign company or investing in an international fund. However, one method that is often overlooked is buying large U.S. multi-national companies. As a result of globalization, many large U.S. companies now

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Pop Culture as an edge in business

Josh here – once upon a time it was totally normal to be sitting face to face with a friend and talking across a table, and then they locked down New York City and you know what happened from there. Anyway, my friend Brooke Hammerling was the last person I met with before the shutdown and we taped this conversation about the importance being up on Pop Culture. Lots of business leaders struggle to understand what...

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This is the thing the bears hate most

I wrote this on my birthday, February 25th. I knew it would happen. Hundreds of S&P 500 component companies, like my Mastercard example, cut their full-year guidance for 2020 or eliminated it outright. The bears like that. But then, enough time goes by and everyone forgets what the original estimates were. And then the companies start “beating” the new numbers, which have been revised lower months ago. An...

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