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Five Things You Need to Know: The Debt Crisis Is Not a Final Destination


The debt crisis is not an end in and of itself, but rather is something to pass through. And no one knows what will emerge from the other side.

3. Did Buy-and-Hold Die?

So much financial commentary today is targeted toward explaining why everyone at the Federal Reserve is an idiot, how everyone at Goldman Sachs is a thief, and in general favors punditry over analysis. But in the course of doing some separate research this morning I stumbled across a handful of voices in the wilderness who offered some timely advice in May 2009.

You won't find this article easily in searches for "Death of Buy-and-Hold" because it apparently wasn't search optimized. It's from Morningstar. That alone will guarantee many people won't click on the link. (Here, I will save you from having to do this yourself. "Kevin -- Thanks for the link but don't you know Morningstar is more or less just a credit ratings agency for the mutual fund industry? Thanks, but no thanks.") Anyway, this was a nice summary from Chris Davis, a portfolio manager for Davis Funds, at one of the most pessimistic times in market history in my lifetime.

"[T]he last thing I would say is that the chorus that cries out that buy and hold is dead will reach its crescendo at exactly the time that buy and hold should work going forward. In other words, when it looks worst in the rear view mirror is when it will be best in prospect."

Along these lines, there is much speculation today that the individual investor is dead. The consensus view is that individuals are out of the market, which is largely true, mostly because the game is rigged, not true but conventional wisdom, and that the notion itself of buying individual stocks and even investing itself quaint and old fashioned. Fair enough. But there are advantages individual investors are going to enjoy over the next decade that hedge funds and professionals cannot, among them the ability to withstand drawdowns in markets due to liquidity shocks that leveraged traders cannot. Everything eventually cycles in and out of favor. Everything. If I were to write a piece today and file it away to be published on June 27, 2021, I would headline it: The Return of the Individual Investor. Ten years from now it will be relevant.

Follow Kevin Depew on Twitter @kevindepew

4. Payday Is Killing you

I realize this does not quite qualify as "good" news for the many people in America unemployed, but it's noteworthy. People are more likely to die on or shortly after the day they're paid, according to a new study.

5. Interesting Counting and Data Widgets From

Found this widget over at the folks. It provides an interesting visual of just how dependent on fossil fuels we really are.

Follow Kevin Depew on Twitter @kevindepew

No positions in stocks mentioned.

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