Oct 31, 2024

Lao Tzu on living in the present

If you're depressed, you're living in the past. 
If you're anxious, you're living in the future. 
If you're at peace, you're living in the present. 

~ Lao Tzu



Oct 29, 2024

The Economist on the U.S. economy

In the history of modern economics America's three-decade outperformance is remarkable.  Can it continue?  Throughout this report we will consider reasons for pessimism, from poisonous politics to fiscal frailties.  Set against these are a relentless dynamism, the essential characteristic of the American economy and the ultimate force propelling it forward.




In summing up the Trump and Harris proposals, we point out again that neither candidate knows how to deal with stagflation.  Instead, they call for more government intervention - Trump for tariffs and Harris for more individual and business taxes and for energy policies that will rapidly make life much more difficult for most Americans.

The stagflation of the 1970s was ended by Jimmy Carter's deregulation initiatives, Paul Volcker's end to inflation, and Ronald Reagan's income tax rate cuts.  The economy rebounded nicely and grew to astounding levels.  Unfortunately, the lessons of the early 1980s have been lost, and all of us will pay a price.

~ William L. Anderson, "The Great Retreat: How Trump and Harris Are Looking Backward," The Misesian, September-October 2024



Oct 25, 2024

Kevin Duffy on investing in China

Long-term, China is hated for all the right reasons: economically successful, minds its own business, refuses to kowtow to the U.S. and is too big to attack.  In addition, China boasts a smart, hard-working, entrepreneurial culture that values education and has avoided some of the toxic ideologies of the West, like wokeness.  China represents a key control group and geopolitical diversifier.  And it’s on sale.

~ Kevin Duffy, "Portfolio Review," The Coffee Can Portfolio, p. 19, October 22, 2024







Kevin Duffy on being a long-term investor

As a long-term investor, I get far more excited about the quality and number of seeds being planted than the size of the annual harvest.

~ Kevin Duffy, "Portfolio Review," The Coffee Can Portfolio, pp. 15-16, October 22, 2024



Kevin Duffy on competitive edges in the investment business

The keys to the investment business are developing competitive edges and finding clients who will allow you to apply those edges over time.

~ Kevin Duffy, "Fade to Black," The Coffee Can Portfolio, p. 14, October 22, 2024





Kevin Duffy on the Dalbar effect

The dirty little secret of the asset management business is that the sophistication level of one’s clients is paramount.  If they constantly chase what’s hot and panic out of what’s not, all the hard work by the portfolio manager can be negated.  I refer to this pesky boat anchor as the “Dalbar effect,” after an annual study by Dalbar, Inc.  In it, they document how actual investor returns deviate significantly from published returns due to the poor timing of a firm’s clients.  

Aggressive marketing and client quality are inversely related, although Dalbar is unlikely to admit this to their institutional investor clientele.  BlackRock is no doubt an asset gathering machine, but where are the customers’ yachts?  According to my calculations, over the past ten years BLK’s all-important equity iShares franchise (32.5% of base fees in Q3) suffered a headwind (Dalbar effect) of 5.3% per year.  This effectively cut published returns in half.

~ Kevin Duffy, "Fade to Black," The Coffee Can Portfolio, p. 12, October 22, 2024