January 2016


As I continue to strive for greater efficiency here, I 
have installed a new email system, designed to get YOUR words to me faster and filter out more and more of the "noise". 

No system is perfect, however, and occasionally, one of your emails will end up in the wrong mailbox. 

Should you ever write to me and not hear back by the next business day, PLEASE give me a call right away and I will fix the problem.

By the way, over the years, many of you have been writing to me at my personal email address and I am always happy to hear from you there. 
Please understand, however, that THAT mailbox may not be checked for long periods of time. For anything that is time-sensitive, please use Robert@TheIntelligentDe


Warren Buffett once said that the best thing about stock market prognosticators is that they make fortune tellers look good!  

In the last newsletter, I bid farewell to another great American thinker, Yogi Berra. One of my favorites of HIS quotes is, "Predictions are hard to make, especially about the future."

Just the same, we hear them all the time. The best are useless and worst are ridiculous. 

One of the MOST ridiculous recently crossed my desk. A "rock star" in the bond world, whose name I won't mention here, predicted a 30% chance of a recession this year.

I had to laugh. How can a prediction like that be wrong? If there IS one, he can say, "See, I told you! Am I a genius or what?" and if there ISN'T one, he can say, "Yep, that's why I said there was only a 30% chance".

If someone was kind enough to forward this to you, please click below and make sure you get future editions directly. Of course, you can always stop at any time with one click.


Look for future issues with discussions of Quantitative Easing, liability insurance, the Alternative Minimum Tax and more.

Bye Bye 2015!!!
You are gone and I can't say you will be missed. As we all know by now, it was not a good year for prudent, long term, diversified investors. Of course, we all ALSO know that not every year can be a good one. Market cycles are a necessary, and actually healthy, part of a free economy. Typically, portfolios were up a bit in the fourth quarter, but not enough to make up for earlier declines. A few very big, domestic, "marquis" names did well but the broader market suffered. Emerging market stocks and commodities, key diversifiers, were hit the hardest.
Then came a lovely, mild (here in the Northeast), long New Year's weekend.
THEN, we all came back to work on Monday and saw the markets take a big dive. This was due, primarily, to the disarray in the Chinese economy. Readers of this space know that I have been talking about this for a while. Sorry for not buying into the global "kumbaya" story, but the artfully named "People's" Republic of China is still a totalitarian regime. Yes, it is the largest population in the world and yes, there is a huge, new, growing middle class, but no society has ever, nor can ever, thrive without individual liberty and property rights. On top of that, there are some huge demographic problems in China, also wrought by a dictatorial government.
So, China was the catalyst for the domestic market selloff, and I see it literally as a catalyst in the pure scientific sense. As I recall from high school chemistry, a catalyst CAUSES a reaction without actually taking part IN the reaction. We see this time and time again. Markets get overheated and wait for something to pop the bubble. Remember, several years ago, a major market correction was triggered by the devaluation of the Russian Ruble? The Ruble! Really? We have a minuscule amount of trade with Russia but the marketplace jumped on it just the same. Today, we buy a fair amount of inexpensive goods from China (and the weaker Yuan makes them even more inexpensive) but our exports to China are not significant.
So the selloff occurs and it is, as always, little more than a buying opportunity. Good companies are still good, just on sale for the moment. Now I have no idea if the market will recover in a week, or a quarter, or a year or longer, but I believe it will. Typically, after times like this, the market moves to new highs.
Make no mistake, the economy is weak and struggling, but it is not broken. Growth is slow, painfully slow, and we need a few grownups in the room to address that, but we will break out eventually.
What I DO know is that The Intelligent Decision is to have a plan, and to stick to that plan through market cycles. If I have the privilege and responsibility of monitoring your money, you have a plan. Please call me at any time and we can review it. 

Further, if you are at that glorious time of life where your money is working for you and you are taking regular distributions, your plan is built around the fact that corrections will come and this current volatility will not effect your lifestyle one bit!
IF you do NOT have a plan, regardless of who is handling your money, please give me a call as well. Maybe I can help you achieve greater security and peace of mind as the markets continue to challenge us.

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