Given the incessant focus thrust upon Europe, and with an inflection point seemingly imminent, I thought it worthwhile to take a moment to explore the blocs two options: break-up or backstop.
With the end of the year fast approaching I found this advice timely and useful. It was written by Debbie Knotts, one of our many astute Financial Advisors here at Albion. It’s a quick and insightful piece highlighting a topic with a commendable message.
“Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.” — George Soros
Warren Buffett bought large positions in chipmaker Intel Corp [INTC] and International Business Machines [IBM], according to Berkshire Hathaway’s latest quarterly filing.
As investment managers it is our job to thoroughly examine every economic and financial market data point we ascribe as significant – be it the obscure or the obvious. Indeed, there is no shortage of real-time data flow, and today is no exception. Setting aside the European situation for a moment, this morning the U.S. economic landscape released one of its more market-moving statistics, the government’s Employment Situation report.
For 30 years the economic growth model in China was built upon cheap labor and capital in order to drive its world competitiveness and foreign investment. To some extent, that paradigm has now broken down with profoundly higher inflation rates, as evidenced in wages with 22% growth in recent minimum wage levels [white collar wages even higher]. On the other side of this coin are the positive effects rising wages have on a burgeoning middle class in China – indeed, these higher incomes obligate higher consumption.
While Alcoa is not in our portfolios, the company’s quarterly report marks the unofficial start to the corporate earnings season. As such, it offers Albion an early insight into global industrial demand. As Alcoa came out of the Q3 blocks yesterday, the excitement from spectators quickly receded to disappointment as this esteemed bellwether came up hobbling with an ACL injury. Regrettably, this type of ACL – Anxiety, Concern and Loathing – cannot be quickly treated by a physician, rather its remedy lay in the hands of policy makers and by extension the business and consumer sentiment they create.