2002

Jan. 2002 – Risky Retirement Plans

We know of a retirement program that has been very much in the news, in which investments were restricted to the securities issued by a single entity. Most participants appeared satisfied, until it was discovered that the accounting methods used to track the soundness of those securities, while apparently within recognized guidelines, completely obscured the …

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April 2002 – Investment Intuition

U.S. economic activity reached a peak in March 2001. Conventional wisdom suggests that at the onset of recession, investors should avoid the stocks of companies selling big-ticket items because nervous consumers or businesses might defer these purchases and instead focus on firms that are ostensibly unaffected by GDP trends. Following this logic, an investor would …

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May 2002 – Spend from Capital

The story is told of a female member of a proper Bostonian family who was picked up by the police for streetwalking. At the urgent family conference that followed, the head of the family asked: “Emily, how could you do such a thing?”“I needed the money,” she calmly replied.“But your father took care of you …

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June 2002 – Investing Abroad

Our parent, AIER, recently reported on misapprehensions over the United States capital-account surplus and corresponding current-account deficit, which have persisted since 1982 (see Research Reports, No. 11, June 10, 2002). Critics assert that the current situation reflects foreigners paying for our profligacy, but they miss the point. The capital surplus is very large because the …

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Aug. 2002 – CEOs Might Lie – Dividends Don’t

Corporate malfeasance has shattered investors’ confidence in corporate America. The great bull market that began in the early 1980s exacerbated a trend whereby anticipated and announced quarterly earnings were trumpeted by Wall Street above all other considerations. With only three mild recessions, earnings grew steadily, as did stock valuations. But recent corporate revelations and the …

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Sept. 2002 – News of War

While politicians and pundits ponder the merits of war, investors too must consider its consequences. Dire warnings, from higher oil prices to the costs of protracted U.S. involvement, are everywhere. At bottom, however, the pertinent question is whether the probability of war and its impact are discounted in the markets. Our investment approach is predicated …

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