Charter Trust - Global Market Update

How secure are our computer systems? Photo: Kerstin Riemer. Source: Pixabay Computer security is essential to everyday life. There are dark places and dark minds out there, who want to hack into our computers and devices and steal or corrupt our information. There’s viruses, malware, bots, and tracking cookies can compromise our personal and professional systems. These hackers are intelligent and motivated. What can we do protect ourselves? For most of us, cyber-security begins with a user […]

“I’m sorry Dave. I’m afraid I can’t do that.” HAL 9000 Interface. Illustration Grafiker61. Source: Wikipedia That’s what the HAL 9000 computer says to Dr. David Bowman when he tells HAL to “Open the pod-bay door.” HAL had gone rogue and Bowman was in an EVA pod outside the spacecraft. And that’s what a lot of people are worried about in our current robotic revolution. Robots have replaced workers in a whole host of industries, especially in […]

Is growth inevitable? Photo: Skeeze. Source: Pixabay There’s a common assumption about investing that growth just happens. All you have to do is put your money to work for a long enough time it will ultimately lift off – like a seedling planted in the ground. The combination of competition, commerce, and the free movement of capital is like sunshine, soil, and water. Eventually, a tiny seedling sprouts and grows into a giant redwood. But markets aren’t […]

What’s the asset that no one talks about? Photo: Bryan Hanson. Source: Morguefile When I discuss asset allocation, I usually focus on stocks and bonds. Bonds are a senior claim on a business’s cash flow, and stocks are a residual claim on cash flow. So stocks benefit from a business’s growth, but they’re riskier – they get wiped out if the business fails. Bonds are safer, but they don’t go anywhere. If everything goes right, you just […]

“Invert, always invert.” Leonardo Da Vinci’s “Vitruvian Man.” Source: Wikipedia That’s what the 19th century German mathematician Carl Gustav Jacobi said when approaching particularly vexing problems. He made advances in elliptical algebra, number theory, and differential equations. The Jacobi identity and Jacobian sum are named after him. And mathematicians still use the Jacobi Inversion method. Stated simply, inversion means to assume the opposite of the problem you’re trying to solve, and look at what goes into that […]

Do half of all new restaurants fail in their first year? Photo: Dick Terry. Source: Morguefile Starting a new business is hard. There are regulations, suppliers, labor issues, insurance, bookkeeping, and countless other issues. It seems like there are a million ways to go wrong, and just one lonely road to success. You need a plan, you need drive, and most of all you need customers – customers that your competitors also want. Because of all these […]

Do currency exchange rates matter? Brazilian Real priced in Dollars. Source: Bloomberg More and more companies do business around the world. Toothpaste-maker Colgate-Palmolive has 30% of its sales in Latin America, but only 20% of its assets there. About half of their long-term assets are in Europe and the US. Clearly, they’re a global company with a global brand focused on basic needs. Their worldwide revenue growth has fluctuated, but their value has definitely grown over time. […]

Are we technology serfs? Reeve and Serfs harvesting wheat. Source: British Library In the Middle Ages, serfs were tied to the land. They weren’t slaves—it was worse. They and their descendants were perpetually bound to their Lord’s estate. They couldn’t just leave. If the Lord wanted different crops, the serfs had to plant them. If the Lord went to war, the serfs had to take shelter. The nobility had a lot of privileges but very few responsibilities. […]

Are investors just herd animals? Source: South Dakota Department of Tourism Investors have to wrestle with lots of issues—economics, financial reporting, asset structure, valuation—but perhaps the most difficult factor they face is their own nature. People are naturally social creatures, something Aristotle noted 2500 years ago. We like to do what other people are doing. Going against the crowd can feel like standing up against a herd of charging buffalo. But strategists have long seen the advantages […]

Where is the economy headed? Photo: Thomas Nilsson. Source: Pixabay Market-watchers are always looking for insight into what’s happening in the economy. It’s important to separate the signal from the noise. We can easily get distracted by politics, headline news, and our personal perspective. If you have a friend who can’t seem to find a job, it’s easy to conclude that the economy isn’t creating many jobs – even though your sample size makes the observation statistically […]

Where do pencils come from? Photo: Daniel German. Source: Wikipedia In 1958 economist Leonard Read wrote a charming essay entitled “I, Pencil” about the miracle that the humble pencil represents: wood, zinc, glue, and graphite combined in a form that makes writing possible. There’s no hive-mind directing the countless individual actions necessary to bring pencils into being. Rather, individual shippers and machinists and miners and foresters work in their own individual interests, and their know-how is organized […]

How big is too big? Woodblock of a sumo wrestler in Japan. Public Domain Source: Wikipedia 80 years ago the Nobel Prize-winning economist Ronald Coase set out to explain why people organize themselves into businesses, firms, and corporations rather than just freely trade goods and services amongst one another. If Adam Smith’s “invisible hand” is so efficient, why don’t we all organize ourselves independently? The economic answer has to do with efficiency. It’s cheaper to build a […]

Do your finances keep you up at night? Photo: Bhoj Rai. Source: Unsplash Researchers have found that folks often fall into six common errors when they deal with their money: risk-takers, hoarders, retail-therapists, cash-splashers, controllers, and avoiders. Each of these mistakes is avoidable – and they typically stem from personal issues that have little or nothing to do with money. Instead, they may be compensating for some personal needs they have. Risk takers have a bias towards […]

“The report of my death was an exaggeration.” Photo: A.F. Bradley. Source: Library of Congress That’s how Mark Twain responded to a story that he was dying of poverty while on a visit to London. He was undecided whether to be annoyed or amused. He was just 62 at the time, and while a little frail, was in excellent health. A cousin of his – James Ross Clemens – had been seriously ill, and the papers confused […]

What happened to the circus? Public Domain. Source: Pixabay When I was a boy I loved going to the circus. The spectacle of the three-ring extravaganza coming to my city was something all the kids in my neighborhood looked forward to: the trapeze, the high-wire act, the clowns. And of course there were the performing animals—bears, big cats, and of course elephants. I still recall seeing 25 or thirty elephants standing on their hind legs in a […]