A Strategy For Inflationary Times
June 2, 2008Retro styles are in vogue. Unfortunately, so are retro economic conditions. The world, and the United States in particular, may be entering an era of higher inflation much like the 1970s. Need proof? Gusher-high oil prices. Check. Continually rising food and commodity prices. Check. Collapsing dollar. Check. Fondue is popular. Check. While we cannot see the future, we can use the 1970s experience to help us guard against the damage …
One Man’s Junk Is Another Man’s Treasure
June 1, 2008Rational, unemotional investors create an orderly and efficient securities market. But sometimes fear takes over, buyers stop buying and the market malfunctions. For daring investors, that’s when opportunities abound. While many people ran from the carnage of the 2007-2008 credit crisis, some of the “smart money” wielded by institutional investors took advantage of the situation. If an investor can understand why certain markets are in flux and anticipate conditions that …
Revisiting The Clear Channel Deal
June 1, 2008It must be summer: Shareholders of Clear Channel Communications are voting, once again, on whether to accept a buyout of their company. The deal was on its deathbed, tied up in litigation in two states, before the company, its would-be buyers and the buyout firms’ lenders agreed to share the pain and move ahead. It remains to be seen whether the company’s sometimes-balky shareholders will go along. They should, because …
Making The Best Of Bonds
June 1, 2008With higher inflation, interest rates rise, potentially very quickly. As interest rates increase, conventional fixed-rate bonds depreciate because investors demand higher yields. From January 1970 through January 1981, when annual inflation averaged 7.8 percent, 30-day Treasury bills returned 6.8 percent. Longer-yielding bonds fared much worse, returning 4.0 percent before adjusting for inflation. Because we believe the chance of a period of high inflation has increased substantially, we have altered our …
Fatal error: Allowed memory size of 67108864 bytes exhausted (tried to allocate 24 bytes) in /var/www/phfg/_/wp-includes/meta.php on line 559