Baby (investor) boom
“15 percent of all current U.S. stock market investors say they first began investing in 2020.”
– Schwab survey. This remarkable statistic puts an exclamation point behind an extraordinary year in the markets, in which social media influencers played an outsize role in drawing new participants to the world of investing. In Schwab’s understated analysis of what it calls “Gen I” investors, the company noted, “Gen I says the biggest surprise during their first year of investing was learning that investing is more about long-term gains then short-term wins.” Read more at bit.ly/2TQQS6t.
Sign of the times
“It’s a totally nihilistic parody of actual investing. This is it guys, the biggest U.S. fantasy trip of all time.”
– Jeremy Grantham, co-founder of investment firm GMO, in a 6/23/21 article in Advisor Perspectives. He was referring to all of the interest in stocks such as GameStop and AMC. Grantham, long known for his bearish sentiments, said, “The last 12 months have been a classic finale to an 11-year bull market, checking all the necessary boxes of a speculative peak.” Read more at bit.ly/3d9jC0W.
Onward
“It’s hard to wrap your head around the idea that this bull market could still have a number of years to run but stranger things have happened. I’m not saying it’s going to happen, just that it could.”
– Ben Carlson, in a 6/17/21 post on his blog, A Wealth of Common Sense. While he understands the concern over today’s high valuations, he said it’s possible for the market to continue its upward climb. Read more at bit.ly/3wJOQnc.
What’s the story?
“To update what Benjamin Graham, the father of value investing, once said: ‘In the short run, the market is a narrative machine, but in the long run, it is a narrative debunking machine.’”
– Barry Ritholtz, in a 6/21/21 post on his blog, The Big Picture. He said story-driven investment decisions seem to be ruling the day right now, but that fundamentals will win out. Read more at bit.ly/3xFPguN.
If it sounds too good to be true…
“It’s not free trading.”
– SEC Chairman Gary Gensler, in a comment made to CNBC on 6/9/21. Gensler was talking about “payment for order flow,” in which brokerage firms are paid to direct buy or sell orders to certain companies that execute the orders. The practice has become a point of controversy, with Gensler and others suggesting that it is both misleading for brokers to advertise “free trading” without disclosing this source of income and it may lead to customers not getting the best prices for their trades. Read more at cnb.cx/3xQxF3D.
Driving without a map
“This is an extraordinarily unusual time. And we really don’t have a template or any experience of a situation like this. We have to be humble about our ability to understand the data.”
– Fed Chairman Jerome Powell, quoted in a 6/20/21 Washington Post article. He acknowledged that policymakers had not properly judged parts of the recovery and said they could not be certain about what will happen next. Read more at wapo.st/3gJG3fo.
“Well done”
“At the end of all of Jesus’ stewardship parables is this question: Will we be found faithful when the master returns? The same question waits at the end of every financial decision, at the end of every decision about how we spend our time, at the end of each day, and at the end of every life. Have we been faithful with all of the opportunities, possessions, and experiences he has given us? Have we made the most of our time and our relationships?”
– Jill Foley Turner, in an article on the National Christian Foundation’s web site that was published on 5/23/21. Read more at bit.ly/3gY2BIc.
