Money and Finance
From the book 100 to 1 in the stock market. Remember this was published in 1972.
- The Daily Princetonian Speaks To Paul Volcker
Link to interview: Q&A: Former Federal Reserve chairman Paul Volcker '49 DP: Pretty recently, some economists have suggested that the central bankers took [the threat of] inflation too seriously. PV: I’ll give you a simple answer. The responsibility...
- Leucadia National Annual Meeting Notes 2012
From The Brooklyn Investor blog (found via the Corner of Berkshire & Fairfax). LUK is an Inflation Play In answering the above question about the future of LUK, Steinberg said that they started first and foremost as opportunists. He...
- Wsj: Albert Edwards Has Another Reason You Should Worry About Profits
Last week the BLS revised the unit labor cost rise in Q2 up from 2.2% to 3.3% quarter over quarter. US non-farm business unit labour costs are now rising by 2% year over year. That is very bad news for profits. Bad news for equities. And because the pace...
- How Inflation Swindles The Equity Investor - By Warren E. Buffett, Fortune May 1977
It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment. We have been in such an environment for most of the past decade, and it has indeed been a time of troubles for stocks. But the reasons for the stock market's...
- 15% Capital Gains Tax Myth
Just for a little perspective I made a quick graph showing the true capital gains tax rate adjusted for inflation. To make the math simple let's assume you invested $100 in a stock and it doubled in value to $200 so the capital gains taxes owed would...
Money and Finance
Thomas W. Phelps quote (another on inflation)
From the book 100 to 1 in the stock market. Remember this was published in 1972.
The correct answer to the question, “What does inflation mean to common stocks?” is: “Whatever inflation means to their earnings and dividends.”
Inflation is most bullish on common stocks when it follows a deep depression and is not generally expected. Rising demand for goods and services can be met by putting idle productive facilities to work. Labor is not yet anticipating further increases in living costs. And by the time more plant capacity is needed, risking construction costs haves underwritten the profit margins of existing facilities.
But when inflation persists long enough so that everyone is aware of it, and when the rate of inflation becomes high enough to be a political liability for whoever is in power in Washington, it is no longer automatically beneficial to corporate earnings and may become detrimental to them.
This is where America is now. Some companies may still benefit from inflation but more and more will be hurt as controls proliferate. Far from guaranteeing rising profits for all, whether strong or weak, ably or poorly managed, inflation has reached the stage where it presents a challenge only the best can meet. Selectivity seems likely to be much more important in the 1970s than in the 1960s, and it was not unimportant then.
- The Daily Princetonian Speaks To Paul Volcker
Link to interview: Q&A: Former Federal Reserve chairman Paul Volcker '49 DP: Pretty recently, some economists have suggested that the central bankers took [the threat of] inflation too seriously. PV: I’ll give you a simple answer. The responsibility...
- Leucadia National Annual Meeting Notes 2012
From The Brooklyn Investor blog (found via the Corner of Berkshire & Fairfax). LUK is an Inflation Play In answering the above question about the future of LUK, Steinberg said that they started first and foremost as opportunists. He...
- Wsj: Albert Edwards Has Another Reason You Should Worry About Profits
Last week the BLS revised the unit labor cost rise in Q2 up from 2.2% to 3.3% quarter over quarter. US non-farm business unit labour costs are now rising by 2% year over year. That is very bad news for profits. Bad news for equities. And because the pace...
- How Inflation Swindles The Equity Investor - By Warren E. Buffett, Fortune May 1977
It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment. We have been in such an environment for most of the past decade, and it has indeed been a time of troubles for stocks. But the reasons for the stock market's...
- 15% Capital Gains Tax Myth
Just for a little perspective I made a quick graph showing the true capital gains tax rate adjusted for inflation. To make the math simple let's assume you invested $100 in a stock and it doubled in value to $200 so the capital gains taxes owed would...