Archive

It's as if airlines want to make you suffer. The average coach seat is less than 17 inches wide. The average American man's shoulders are 16.1 inches across. Still, it's hard to blame the airlines. The business is hypercompetitive. It requires a huge amount of capital. Passengers will buy the ticket that's cheapest, with little […]

• AAL
• DAL
• UAL

We call it the "winner's curse"... It's a simple idea. When you're the highest bidder, you almost always overpay. Winning means you had the most optimistic view of an asset's value. That is, unless you know something that everyone else is missing. It shows up in online auctions on eBay. It happens in bidding wars […]

• ABBV

Housing is booming right now. New single-family home prices are up 3% since July 2018. New home sales were up 4.3% in July compared with the same month last year. Year-to-date home sales are up 4.1% relative to the same time last year... and 2018 was a stronger year than 2017. And yet, investors aren't […]

• KBH
• XHB

Earnings growth is the key to a rising stock market. When you buy a stock, you are buying a stream of earnings in the future... If earnings don't grow, or the market perception of earnings doesn't change, a stock won't rise. But if earnings, or market expectations for earnings, do change, stocks move. This is […]

Stock markets do not always act rationally. Emotions like fear, greed, and excitement can cloud our better judgement of a situation and lead to suboptimal decisions. Behavioral economics is the analysis of how factors other than rational economic frameworks drive real-life human decisions. You see this play out all the time in the markets. Just […]

• BYND
• NFLX
• SKX

If you believe the headlines, any number of things could trigger the next recession... Morgan Stanley predicts we will enter a recession within the next nine months due to heightened tariffs from the trade war. Capital Economics says there is a one in three chance the U.S. will be in recession in the next year […]

Imagine if apparel maker Hanesbrands still relied on the spinning jenny. Or if software giant IBM hadn't updated its servers since the 1980s. We'd be paying more for scratchy underwear. And an IBM "desktop" computer would be a desk. More likely, of course, Hanesbrands and IBM would simply disappear. Companies can't possibly compete without this […]

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