Last weekend, the city water department sent out an important mailer. Long Beach has implemented water rationing once again. Irrigation for turf and landscapes is now restricted to Mondays, Thursdays, and Saturdays, occurring only before 9 AM or after 4 PM.
The heat and dryness are unmistakable. Moreover, many wonder if the “big one”—a significant earthquake along the San Andreas Fault—might be imminent. It feels as though we are on the brink.
Indeed, notable events are unfolding. In California, the Santa Ana winds have made an early arrival. On Wednesday, a massive blaze ignited in the outer reaches of the Los Angeles Basin, where the lower foothills of the Cajon Pass transition into the high desert.
Before long, thick plumes of dark gray smoke enveloped the wide landscape, stretching from the San Gabriel Mountains to the Pacific Ocean. The foreboding atmosphere was momentarily lifted in the evening, replaced by a striking sunset. We paused to observe and listen…
It felt as if nature had a message for us: “Get Out!” So we felt compelled to share this cautionary advice with you… Get Out! Continue reading
The strategy of buying low and selling high is the key to investment success. Yet, it remains elusive for many. Most individuals remarkably tend to buy high and sell low.
People often find themselves more inclined to invest in high-valuation stocks like Facebook at 80 times earnings, rather than opting for more reasonably-priced stocks such as DOW Chemical Company at only 13 times earnings. In the realm of financial markets, most investors fail to identify a solid bargain even when it’s glaringly apparent.
The mere appearance of a discount—like a stock priced 80 percent lower than its peak—doesn’t necessarily make it a wise purchase.
Warren Buffett, the world’s preeminent investor, once remarked, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” He also emphasized that just because a stock is unpopular doesn’t make it a smart buy; a contrarian approach can be as misguided as blindly following the crowd. Thoughtful analysis is essential. Continue reading
An influx of money and credit can drastically inflate prices. When consumers borrow against future earnings to spend today, the result is an artificial surge in demand, driving prices upwards.
However, this upward push in prices can never stabilize as long as the supply of money and credit continues to swell. Moreover, the debt necessary to sustain such price increases also rises. Over time, this leads to a distorted financial landscape where purchasing anything outright becomes nearly impossible.
Consider the housing market. In many urban areas, it is virtually unachievable to buy even a rundown house in a decent neighborhood using cash. The influx of credit has propelled housing prices far beyond what a middle-class individual, even with a rigorous savings routine, can amass.
The only viable option for potential homeowners is often to secure a loan, resulting in decades of debt obligation. The silver lining for borrowers lies in the possibility that if the Federal Reserve maintains its credit expansion policies as it has for the past 40 years, their long-term burden may diminish.Continue reading
Listening to the Canary
By Terry Coxon, Senior Economist
During World War II, the British Royal Air Force (RAF) devised a strategy to mislead enemy forces, enabling a squadron of bombers to approach a heavily fortified target in Europe unnoticed. This target was so protected that it required an extraordinary degree of stealth to defeat.
Equipped with the technology to jam electronic detection systems, the RAF worried that this very tactic would alert their foes. They then chose to “train” German personnel to accept misinformation as reality. The RAF had the advantage of knowing that the defending operators were interpreting novel and unreliable equipment, and they were attempting to understand signals without visual confirmation of what they were meant to detect.Continue reading
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