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Is Wall Street Selling a Paper Sun?

Paper Sun was the debut song of the band Traffic in 1967. I happened to hear it when I was getting coffee a few days ago, and it made me think of the market. I’d say the song is about believing something is true when it’s not, and reality comes crashing down eventually. The sun is something that effectively lasts forever. How long will a paper sun last? It may look pretty for a while, but if there’s nothing really there, it will lack permanence.

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Are Staples Now Like the Retail of 2017?

When we bought retail stocks in 2017 it was a deeply unpopular trade. Nobody wanted them, as apparently Amazon (AMZN) was going to take over the retail sector all by itself. There were certainly days early in the process that weren’t much fun.

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BELIEVING MR. MARKET – HAPPY DAYS ARE HERE TO STAY

“Mr. Market” is the idea that Benjamin Graham presented in his classic book The Intelligent Investor. The idea is that Mr. Market is a hypothetical investor who is driven by emotion. Right now it seems to me that Mr. Market is fat and happy after several years of success. That has left him very comfortable.

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MAN OF LA MANCHA
(Dream the Impossible Dream)

In early 2000, tech (along with media and telecom) stocks could do no wrong. They were one decision stocks that took the whole market up with them… until they didn’t as 2000 continued. Reality has a nasty habit of intervening.

Now, once again tech is the safety blanket of choice. Financials and industrials not working out like you hoped? That’s OK, tech will never hurt you. At least not the biggest ones… mostly.

One trend I’ve noticed is that the tech stocks seem to do great as long as…

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A DISTANT MIRROR

How do we use and learn from stock market history? Why are our portfolios positioned the way they are – tilted toward safe stocks and away from high growth technology and the like?

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