Author Archives: Michael Murphy

Dear New World Investor: The S&P 500 bottomed on October 12 at 3491.58. It’s a Wall Street shibboleth that the market leads the economy by six months, so let’s see – November 12, December 12, January 12, February 12, March 12, April 12 – yep, here we are. All...

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Dear New World Investor: Inflation is slowing towards the Fed’s current 2% target. Employment is slowing rapidly, with the March payrolls number due during tomorrow’s stock and bond market holiday. In February, the personal consumption expenditures (PCE) price index — the Federal Reserve’s preferred measure of inflation — was...

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Dear New World Investor: In the wake of the Silicon Valley Bank et. al.failures, Wall Street sentiment has turned from mere “doom and gloom” to outright “apocalyptic.” According to the latest BofA fund manager survey, the majority of Wall Street professionals now expect a “systemic credit event” emerging...

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Dear New World Investor: “Whenever the Fed hits the brakes, someone goes through the windshield.” It’s an old Wall Street saying born of painful observation, and it’s true. After 11 days of turmoil that brought down four banks and left a fifth teetering, the markets went from pricing...

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Dear New World Investor: Well, the Fed finally broke something. This morning, Yahoo Finance wrote: “The once-difficult job now facing Federal Reserve chair Jay Powell and his central banker colleagues just became a seemingly impossible dilemma — continue its fight against inflation by raising rates and tightening credit markets...

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Dear New World Investor: Date: Tuesday, March 7, 2023 Scene: Senate Banking Committee Hearing: Humphrey-Hawkins Testimony Presenter: Jerome Powell, Chairman, Federal Reserve Chairman Powell: Due to the persistence of inflation, we may have to raise rates in larger steps again, and to higher levels than previously expected. Senator Murphy...

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Dear New World Investor: “It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. ‘Efficient’ markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.” – Warren Buffett, February 25, 2023 Last Friday’s...

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Dear New World Investor: From the Fed minutes of their February meeting, released yesterday: “Almost all participants observed that slowing the pace of rate increases at the current juncture would allow for appropriate risk management.” It looks to me like the economy is stronger than expected (good news), which...

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