Monday, November 18, 2013

Monday musings

The stock markets all passed some more round numbers today - 16,000 on the Dow, 1,800 on the S&P 500 and the Nasdaq is just a couple point from 4,000 (though they've all pulled back a bit from the open). These numbers are meaningless, but they make for good headlines.  The rally continues unabated as a result of more bad news.  Global economic weakness is perceived to mean more stimulus which ultimately leads to higher asset prices.

My big concern is that companies have been conditioned to operate in this environment for too long now.  It's hard to generalize, but the pattern that is revealing itself is large corporations continue to defer investments for the future in favor of costs cutting today and stock buybacks.  This is a short sighted approach to corporate management but it is what the market wants right now.  Buyback your stock which drives up the price (reduce supply/increase price) and that is an easier option than investing today in a new plant or new employees which might take 5-10 years to yield a return on that investment.

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Awesome sculpture of the day:



An Infinite Staircase by David McCracken sculpture

This sort of looks like many stock price charts lately.
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Finally, this story shows that not everyone actually saw the movie "Terminator" - Expert predicts US Army will have 10 robots for every soldier within 10 years.  Admittedly, this "expert" runs a company that builds robots for the Army, but it's still interesting nonetheless.

Cheers!

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