Author Archive | Michael Rosen

Everybody Out’ta the Pool

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Markets work through the forces of demand and supply. This axiom applies to all markets, from housing to marriage (as Gary Becker famously noted), and anywhere there is an exchange of goods or services (or mates). In all markets, price is the regulatory mechanism that ensures an equilibrium between the amount demanded and the amount supplied. Adam Smith called this the “Invisible Hand.” You knew all this already, because it is about as fundamental a concept in economics as exists. The price of that house is X, or the price of that automobile is Y, because X and Y are Read More


Updating the Triangle

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Last year, I introduced my big picture framework of assessing the relative attractiveness of markets Inside the Triangle through the lenses of valuation, momentum and sentiment. To recap, the ideal time to buy a market is when valuation is cheap, momentum is positive and sentiment is poor. It’s best to sell when the opposites prevail: expensive valuation, poor momentum and exuberant sentiment. The 2000 internet bubble is a recent case-in-point for conditions at a market top, and March 2009 a time when the conditions to buy were very favorable. Of course, most investors find it hard to sell at the Read More


(Not) Recommended Reading

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I don’t like recommended lists. They turn experiences into a contest (and the winner is…), and one reviewer’s preferences may have little to do with mine. That said, since my writing covers a very wide range of topics—history and sociology to science and art and beyond—I do get asked frequently where I come up with my themes. The answer is simply, I read a lot. More than a book a week, for sure, although I don’t really keep count (or rank). I don’t necessarily assume you would enjoy anything that I did, but, to give you a peek at some Read More


Hot As Hell

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Hell is hot, as everyone knows. Everyone “knows” this, but there really is no conclusive evidence: no eyewitness reports, no scientific instruments to measure the temperature in Hell. So, how do we “know” that Hell is hot? Well, mostly from Dante Alighieri. In the Inferno, part of his opus magnus, La Commedia Divina (The Divine Comedy, subject of our 3Q 2007 letter, https://angeles-srv.s3.amazonaws.com/content./1441740962./2007-3.pdf, there are Nine Circles of Hell, each with eternal punishment of increasing severity, depending on one’s earthly behavior. The Sixth Circle is reserved for heretics, condemned to eternal existence in flaming tombs. The Seventh Circle is for Read More


It’s About Time

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“Lost Time is never found again,” advised Benjamin Franklin in Poor Richard’s Almanack. And Dante Alighieri observed, “The wisest are the most annoyed at the loss of time.” I have been thinking about replacing my seven year-old car, which has me reflecting on the notion of Lost Time. Americans average 42 hours per year in rush hour traffic, but of course, in Los Angeles it’s much more. We each sit in rush hour 104 hours per year, the worst in the world (all data here come from the definitive source of global traffic data, INRIX Research). Moscow, New York, San Read More


For What It’s Worth

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In the summer of 1966, throngs of young people crowded the Sunset Strip in Los Angeles to hear their favorite bands. Over at the Sunset Tower, Jim Morrison and the Doors were the house band, finishing up their first album (The Doors, with Light My Fire, and Break On Through, among other classics). Not to be outdone, a former policeman from Chicago, Elmer Valentine, opened the Whisky-A-Go-Go, featuring dancers in mini-skirts suspended in the air in a cage, thus inventing the Go-Go dancers. The Whisky also had a house band working on their debut album. The year before, 1965, the Read More


Toes in the Sand

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For me, and I think I speak for everyone on the planet, the feeling of warm sand between the toes is one of life’s great pleasures. And for virtually everyone on the planet, including those of us who look at a beach every day (ok, I may be rubbing it in), we don’t give sand much thought: it’s just there. But sand is more than pretty beaches; it’s big business. And it’s gotten to be even bigger business with the advent of the Shale Revolution. That’s because a lot of subsurface rocks that contain oil and gas lack permeability, which Read More


Not Dead Yet

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According to the National Bureau of Economic Research (NBER), the self-acclaimed arbiter of economic debate in this country, the current economic expansion began in June 2009, meaning we just passed eight years of uninterrupted growth. This is now the third longest period of economic growth since the Civil War (see chart below). In May next year, we will pass the second-longest expansion, and if we can get to the summer of 2019 without a dip, we’ll have a new record. Will we get there? And does it matter? The answers are, probably and yes. To answer the first part, we Read More


Humans! What Are They Good For?

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It looks like the world is turning against humans. I’ve talked before about the rise of robots in manufacturing (2016 Angeles Independent School Endowment Symposium…see graph below). But robots are taking on increasingly more complicated tasks. We may be comfortable with robots assembling our cars (although the UAW may take exception), but most us will soon be forced to shift our perception of our family physician from Robert Young (aka, Marcus Welby, MD, which is showing my age) to Da Vinci (no, not Leonardo…see photos below). The Rise of Robots, The Descent of Humans It seems that investors, too, have Read More


Beware Parabolas and Populists

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In scouring the world for investment opportunities, the chart above caught my attention. It shows the year-to-date performance of the Caracas stock exchange, more than tripling from around 30,000 to over 100,000 today. Did we miss a chance to make a lot of money? Well, no. The stock market has tripled because the currency has lost all value. The official USD exchange rate of the bolivar is 10:1; 10 bolivares buys 1 US dollar. But the official exchange rate is a fantasy: the actual exchange rate is 7,500:1 (see graph below from www.venezuelaecon.com). That’s a 75,000 percent depreciation from the Read More