…when you were younger you used to fasten your own belt and go wherever you wished. But then you grow old, you will stretch out your hands, and someone else will fasten a belt around you, and take you where you do not wish to go.
– Jesus of Nazareth (John 21:18)
YOUGHAL, IRELAND – In an Irish bar on a Sunday evening…
“Let me tell you the story…” began a man at the bar.
“They’re all dead now… so I can tell it…”
| Recommended Link | |||
|
|||
Still Homeless
We are still homeless… wandering like a gypsy… blown from place to place like a dried-up leaf…
We find lodging where we can, close to where we need to be.
As usual, we spent the weekend working on our derelict cottage. We are working alone, so we are being especially careful not to have an industrial accident.
But it went smoothly. We got the roof framed up and ready for tin.
With a little luck, we will get the tin on next week. Then, safe from the rain, we’ll be able to work inside. And with more luck, we’ll be able to finish the cottage this year… and move on to other things in the years ahead.
When we were younger, we undertook these projects without considering how long they would take. It didn’t seem to matter. We would just keep at it until we got the job done. One foolhardy project took three years longer than expected. But what the heck; we had plenty of time.
Now, it is different.
“I’ve had three hip replacements,” said a neighbor.
“You must have a unique body,” we replied.
“No… no… we only have two hips, just like everyone else. But we had one of them replaced twice. And we have a bad shoulder, too. We used to play a lot of sports… and work every day on the farm. But we just can’t do it anymore.”
| Recommended Link | |||
|
|||
Time and Love
Hips, shoulders, knees, brains – something is bound to go bad, sooner or later.
Warren Buffett was asked a good question at his celebrated confab in Omaha, this weekend.
“What are the things that matter most to you,” asked a woman in the audience.
Without hesitation, Buffett answered: “Time and love.”
Love is what Mae West must have had in mind: “Too much of a good thing can be wonderful,” she said.
Love is unique. It defies analysis. Even a genius like Buffett bows down before it. He can’t add it. Can’t measure it. Can’t increase it or stimulate it. He can’t have too much. But he can have too little.
Similarly, time is not something Buffett can control or manipulate. But at least he can understand it. He can follow it on the clock. He can see it passing away. He can figure out how it affects business plans, amortization schedules, insurance liabilities, and rates of return.
A 5% return in a single year may be acceptable. Spread it over two years and it becomes only 2.5% – barely equal to inflation.
Time is a crucial element of every financial analysis. More important, it is what a man of his age is running out of. And so are we all.
| Recommended Link | |||
|
|||
Kitty’s House
After having worked all Sunday afternoon framing the roof, we retired to a bar for dinner. At 7 p.m., the place was already full of people. Young people. Old people. Families with small children.
There was a fire in the fireplace, with the flickering light reflected on the wood paneling and the noise of cheerful conversation coming from every table.
With no tables left available, we took a seat at the bar and ordered our dinner and a glass of Guinness. And before long, we were in conversation with other diners.
“Oh… you’re fixing up Kitty’s house,” said a bar-mate, putting two and two together. “I saw they were doing work on it… and I’d heard that an American had bought it.
“It’s a tragic place, where you’ve rocked up,” a man we judged to be about 80 years old, continued, and proceeded to tell us a story about time and love.
“You’ve fallen into a place with history. I don’t mean the area. Of course, there is plenty of history here, too. I mean, your house. Your farm… There’s a lot of history there.”
That history revealed tomorrow…
Regards,
 |
Bill
MARKET INSIGHT: EARNINGS FORECASTS FALL
By Joe Withrow, Head of Research, Bonner & Partners
 |
The number of S&P 500 companies reducing their Q2 earnings guidance is on the rise…
That’s the story of today’s chart, which maps the number of companies in each sector that have said their next earnings report will fall short of analyst expectations.
Publicly traded companies release earnings reports every quarter. These reports document financial performance and highlight business achievements. Wall Street analysts use these to set future earnings estimates for each company.
And companies typically broadcast their earnings estimates – good or bad – ahead of time.
At writing, 70 companies have issued earnings guidance for Q2 2019.
As you can see, 56 of those companies have reduced their earnings guidance for the second quarter. For comparison, only 14 companies have raised their earnings guidance.
This means that of companies that have issued guidance, 80% reduced their growth outlook. The five-year average is 70%.
While not a smoking gun, this trend suggests that corporate earnings growth is slowing… And that’s bad news for stocks. Strong earnings often power the market higher. And disappointing earnings often lead to lower prices.
This is just one more reason to be cautious in the market, today.
As we have said all year, the snapback rally we have seen since Christmas Eve is not sustainable. The data suggests that the next big move for the market will be lower.
– Joe Withrow
FEATURED READS
Warren Buffett on Two Things Money Can’t Buy
Many investors eagerly await the Berkshire Hathaway Annual Shareholders Meeting to garner insights from investing legend, Warren Buffett. And as our editor highlighted above, this year’s meeting didn’t disappoint. While the Oracle of Omaha tends to reflect on the dealings of the company, one question took Buffett beyond the balance sheets…
How Two Tweets Can Impact the Markets
Volatility has skyrocketed. After weeks of subdued price swings across global markets, the historic calm has been shattered. While it might not be as bad as it looks, the recent shake-up still has an impact on market momentum. The cause of all this ruckus? Two tweets from President Trump…
A Sneak Peek of Bill’s New Book
Regular readers will recall that Bill has been hard at work on his newest book, Win-Win or Lose. He’s spent years researching and writing it. And after much anticipation, Bill’s manuscript is finally ready. But before we ship it off to the printer, we wanted to give Diary readers a sneak peek…
MAILBAG
Today, dear readers hash out a few topics, from Social Security to a market crash. But, at least our editor’s “stuff is interesting”…
Information, if used properly, can be extremely valuable. For example, Custer may have been advised “see all those Indians on the surrounding hills? It would be a good idea to jump on your horse and haul!” Julius Caesar might have been advised “today would be a good day to stay home and relax.” For it’s more important to heed good advice than to receive it. (This sounds like my financial career.)
At least your stuff is interesting. I enjoy it. The time I spent in Argentina in the early 1990s was educational, just like my years in the Middle East, or several weeks in China, in 2008. All in all, a good sense of humor is priceless. Again, your stuff is worthwhile. Keep it up and enjoy those Argentine wines.
– John D.
Until Nixon came along, Social Security was in a separate fund and doing fine. Once again, the Republicans came along and screwed up a good program. The Republicans always claim to be fiscally responsible. Then, like Nixon and Reagan, they spend and run up the national debt. When this was pointed out to Reagan, he said deficits don’t matter! People don’t want the facts but believe what they want to.
– Paul L.
Cash will not be good enough if inflation happens or a market crash happens. Paper money will become worthless. I say, buy land and plant fruits, nuts, and vineyards… a huge garden to grow your own food, people must eat, after all. Even if paper folds, the price of gold could fall, also… same with silver.
Some people need to start building less expensive homes, under $100,000, for families with 5 acres of land to farm… 20 would be better, if they intend to raise livestock, as well. The people need to be taught how to build their own homes to rebuild the housing sector. Then, the cost is just the permits and the building supplies… no forever mortgage… no forever debt…
– Cynthia H.
IN CASE YOU MISSED IT…
Sometimes, the market just seems unpredictable. But, what if you could make money whether the market goes up, sideways, or even down?
After six months of research, this investment guru and his team are revealing a new way you can make fast cash, even when stocks crash… This could make 2019 the biggest money-making year of your life.
If you’d like to get in on this “best-kept trading secret” of the Wall Street 1%, read on here.
Like what you’re reading? Send us your thoughts by clicking here.