Our take on the investing, financial, & economic themes of the day

Twenty years from now, would you rather be paid in euros or pounds?

17 October, 2016 by Matthew O'Brien, Ph.D. in Commentary
I asked myself this question as I read the commentary about the recent sell-off in the pound sterling.  Here is the pound against the dollar: Many commentators have taken the opportunity of the sell-off to castigate Brexit and Britain’s new prime minister, who seems bent on implementing ... read more...

Barron’s on Competitive Devaluation

2 February, 2015 by Matthew O'Brien, Ph.D. in Commentary
In my post from last week about central banks I argued that they are devaluing their currencies in a zero-sum game for stimulating their domestic economies at the expense of their trade partners.  A recent piece by Jonathan Laing in Barron’s echoes some of the same points.  Laing cites ... read more...

Competitive Currency Devaluation Continues Apace

29 January, 2015 by Matthew O'Brien, Ph.D. in Commentary
One of the first things that you learn about economic growth, if you learn anything at all, is that growth is not a zero-sum game.  That is, when a company like Apple increases its earnings by 40% or so, as it did last quarter, it didn’t simply “take” those earnings from its ... read more...

Proctor & Gamble’s (Temporary) Currency Headwinds

26 April, 2014 by Matthew O'Brien, Ph.D. in Commentary
In Proctor & Gamble’s recent quarterly earnings report, the company announced a two percent growth in profits.  Profit growth would have been much less tepid if it weren’t for the effects of foreign exchange.  In 2013 P&G’s U.S. sales amounted to $30.3 billion, while ... read more...

The Investment Perils and Promise of Currency Manipulation

3 January, 2014 by Matthew O'Brien, Ph.D. in Commentary
About 40% of sales from companies in the S&P 500 Index come from their businesses in international markets, so an investor who buys American companies has greater exposure to foreign economies than he might realize.  Our clients’ equity holdings are primarily U.S.-listed stocks, but we ... read more...