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How Warren Buffett’s uphill battle against the S&P 500 is changing

    Warren Buffett during an interview with CNBC’s Becky Quick on February 24, 2020. It turned out to be another year during which the billionaire investor shied away from game-changing acquisitions in a pricey market even after a sudden market cash and as his company holds a massive cash balance. Gerald Miller | CNBC   Warren Buffett’s Berkshire Hathaway made some big purchases in 2020, but the biggest Buffett buy speaks to the big challenge the company will continue to face: there was nothing it could find at a better price than its own shares. Berkshire bought back more than $18 billion in its own shares last year, through October, almost twice as much as Buffett spent on his next biggest acquisition, the $10 billion natural gas assets transaction with Dominion Energy, which including the debt acquired, was the largest acquisition since 2016. Taken at his word — which he has earned — that he won’t do a share repurchase just to prop up the stock, the big buyback was a
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There's a New Addition to the Airport Security Team

  Dogs may be some of the world’s most effective disease detectives. In January, before COVID-19 was known to have arrived on our shores, NPR wrote about the dogs’ ability to smell disease. The host of Medical Monday interviewed Maria Goodavage, author of Doctor Dogs: How Our Best Friends Are Becoming Our Best Medicine , who said:   “With ovarian cancer, there's not much great testing for early detection. I heard about these dogs at the University of Pennsylvania Veterinary Working Dog Center that are able to smell ovarian cancer. They're able to detect it as early as stage one. We're not even talking tumors here. They're able to detect ovarian cancer in one drop of plasma from a woman with ovarian cancer.” Doctor dogs also are being trained to detect the novel coronavirus. Reuters reported, “A study recently found dogs can identify infected individuals with 85 percent to 100 percent accuracy and rule out infection with 92 percent to 99 percent accuracy.” Airp

2020 Year in Review

  Last week was the cherry on top of a turbulent year for investors. After the $900 billion fiscal stimulus bill was signed on Sunday, major U.S. stock indices moved higher. The Washington Post reported, “The S&P 500-stock index, the most widely watched gauge, is finishing the year up more than 16 percent. The Dow Jones Industrial Average and the tech-heavy Nasdaq gained 7.25 percent and 43.6 percent, respectively. The Dow and S&P 500 finished at record levels despite the public health and economic crises.” U.S. Treasuries gained, too, as yields moved slightly lower. Thirty-year Treasuries finished the week yielding 1.65 percent. While government bonds didn’t offer attractive levels of income during the year, they “…lived up to their billing as a stock market hedge in 2020. Rates plunged as stocks collapsed in March, and the Treasury market finished 2020 with yields not much above the pandemic panic lows and down half a percentage point or more for the year,” reported Barr

Bitcoin's Energy Consumption

Have the lights in your neighborhood been dimming from time to time recently?  Maybe you’ve got a bitcoin “miner” next door!  A bitcoin miner is one who produces a new bitcoin by applying immense computing power – requiring immense amounts of electricity - to the algorithms and formulas necessary to properly produce the digital entity that is bitcoin.  The miner is then rewarded with…bitcoins.   The University of Cambridge’s Centre for Alternative Finance keeps track of just how much energy the Bitcoin network of miners consumes.  While the exact amount cannot be known due to the wide variety of equipment employed in bitcoin mining, the Centre says that an educated guess can be produced by tracking the total number of hashes (a building block of bitcoin) produced by the miners and estimating the efficiency of the equipment employed in the production. By this estimation, bitcoin mining activity’s power consumption is staggering - about 92.8 terawatt hours annualized.  This is more than

The Case for Small-Cap Value

  Mark Twain is reputed to have said that history doesn’t repeat itself, but it often rhymes.  A situation is now emerging in the market that is a potential rhyme with 1999: highly overvalued growth stocks vs shunned, overlooked and otherwise ignored small-cap value stocks. As in 1999, growth stocks have outperformed value generally and small-cap value specifically for years – about a decade.  As in 1999, growth stocks have reached stratospheric – and probably unsustainable - levels of valuation.  Warren Buffet shunned growth stocks in 1999 because his favorite indicator – market capitalization vs GDP – had reached the then-unheard-of level of 140%.  Today it is over 180%! This has led to small cap value stocks falling to the lowest relative level vs large cap growth stocks since - you guessed it - 1999.   The years between the dot-com crash and the financial crisis were a disaster for large cap growth, but small cap value did just fine: The S&P Small Cap 600 Value Index gained abo

Wishing Joy and Laughter this Holiday Season

    No matter what holiday you celebrate, we hope it’s filled with joy, laughter, and heartfelt happiness. That said, we know holiday cheer can be overwhelmed by the pursuit of perfection and opinions of relatives. Just in case your goodwill falters, we offer some wise, and not-so-wise, words to help restore your equilibrium and good humor.   “A candle is a small thing. But one candle can light another. And, see how its own light increases, as a candle gives its flame to the other. You are such a light.” --Moshe Davis 1     “Once again, we come to the Holiday Season, a deeply religious time that each of us observes, in his own way, by going to the mall of his choice.” --Dave Barry 2     “The best and most beautiful things in the world cannot be seen or even touched. They must be felt with the heart.” --Helen Keller 3     “If you have a purpose in which you can believe, there’s no end to the amount of things you can

How to Keep a New Year’s Resolution

    Eat healthier. Get more exercise. Save more money. Those were the top New Year’s resolutions for 2020, according to Statista . 1   Few people achieved them. One of the reasons so few resolutions become reality is because people tend to think too big. For resolutions to succeed they must be small and easily managed, according to Susan Weinschenk in Psychology Today . 1, 2   For instance: ·      If your goal is to eat healthier, commit to having a piece of fruit or a fruit smoothie for breakfast in the morning. Then make it a habit. ·      If your goal is to get more exercise, commit to walking for 20 minutes every morning. (You can do it while drinking your smoothie!) ·      If your goal is to save more money, choose an amount to save and then se