U.S. economic activity reached a peak in March 2001. Conventional wisdom suggests that at the onset of recession, investors should avoid the stocks of companies selling big-ticket items because nervous consumers or businesses might defer these purchases and instead focus on firms that are ostensibly unaffected by GDP trends. Following this logic, an investor would […]

Our parent, AIER, recently reported on misapprehensions over the United States capital-account surplus and corresponding current-account deficit, which have persisted since 1982 (see Research Reports, No. 11, June 10, 2002). Critics assert that the current situation reflects foreigners paying for our profligacy, but they miss the point. The capital surplus is very large because the

It does little good for investors to dwell on large paper losses they might currently be witnessing, and in fact wise investors can take advantage of the occasion to derive valuable insights. We can point to two important lessons. With the markets in turmoil, the mettle of investors’ is being tested, and we continue to

Corporate malfeasance has shattered investors’ confidence in corporate America. The great bull market that began in the early 1980s exacerbated a trend whereby anticipated and announced quarterly earnings were trumpeted by Wall Street above all other considerations. With only three mild recessions, earnings grew steadily, as did stock valuations. But recent corporate revelations and the

While politicians and pundits ponder the merits of war, investors too must consider its consequences. Dire warnings, from higher oil prices to the costs of protracted U.S. involvement, are everywhere. At bottom, however, the pertinent question is whether the probability of war and its impact are discounted in the markets. Our investment approach is predicated

“I have but one lamp by which my feet are guided, and that is the lamp of experience. I know of no way of judging the future but by the past.”—Patrick Henry, 1775 Our recommendations are based on our observations of historical economic data. This is not to suggest that history will always repeat, but

Investing globally has never been easier. With the click of a mouse, an investor can access research and data on public companies from London to Bangkok, and with another, buy shares through a mutual fund, depository receipt, or directly through an international exchange. This level of information and access is unprecedented. Paradoxically though, the same

Investors who have heeded our advice to hold gold related assets have seen the dollar price of gold rise appreciably in recent weeks. As of December 19th the price stood at $345 per ounce, a price not reached in six years. A rising chorus of voices, largely those of gold enthusiasts, is proclaiming (yet again)