As I read the early news reports about how the former Pakistani Prime Minister Benazir Bhutto was killed in an apparent suicide attack in the military garrison town of Rawalpindi, I was sickened. The news and subsequent images were shocking and disturbing, but the event was also a good reminder that not only do we live in a dangerous world, but as investors, we are constantly reminded that this messy world should be factored into our outlook.
As soon as the story hit the wires, stocks began to sell off. Clearly this was not as dramatic as the terrorist attacks of 9-11, or the subsequent terrorist bombings in Spain or London (all of which markets recovered from in fairly quick order). But the Bhutto murder clearly created an impact, especially in light of a light-volume, holiday-shortened week. Before the news hit the wires, stocks were pointing higher, but when the details of the story emerged, stock futures turned lower and continued to decline throughout the trading day.
I happened to be a guest on Fox Business News yesterday and one guest noted that Pakistan is not a particularly large US trading partner and has absolutely nothing to do with oil production. True enough, but it is a nuclear power and when video of riots there hit our airwaves, most people worried, “Who is in control over there?” The Pakistani turmoil reminds us of our dangerous world, which calls into question the safety of all of our investment assumptions and causes general anxiety. Clearly uncertainty is the enemy of investors. As more details emerged, investors sought safe havens like US Treasury-bonds and physical assets, like gold, both of which gained ground.
Perhaps when a senseless event occurs that throws the world and markets into a chaotic state, it is the best reminder that investors can only control so much. We do not know when the housing slump will end; when a corporate scandal might erupt; or when a geopolitical crisis will cripple some part of the world where the US has a significant interest. For that reason, it is imperative that investors maintain a disciplined approach to risk and create diversified portfolios that help weather the gyrations associated with investing in a messy world.
Friday, December 28, 2007
Thursday, December 27, 2007
The Christmas of Small Pleasures
By now you know that this holiday season was not among the best for the nation’s retailers. Although the final results are not yet in, an early projection from MasterCard Advisors, a unit of the credit card company, found that overall spending from Nov. 23 to Dec. 24, when adjusted for inflation, was essentially unchanged over last year -- a weak performance. In many ways, the holiday season is a good metaphor for 2007: the year of reduced expectations and small pleasures.
I keep thinking that despite 2007 being the Chinese Year of the Pig, the year will be remembered more for small indulgences than big ones. In terms of financial stories, the subprime issue grabbed pig-like headlines, but for investors, the housing recession and credit woes got everyone refocused on single-digit investment returns, which frankly, were greatly appreciated, especially considering the alternatives!
On the holiday front, it is obvious that there was no big, “must-have” item either for kids or adults. But somehow, we found delight in some tried and true items: new video games; Apple i-products; and perhaps the strangest category, women’s shoes. While I doubt that most people gave a pair of Jimmy Choo’s or Manolo Blahnik’s to their gal-pals, perhaps a quick, guilty indulgence made its way into our bargain-hunting holiday season.
In entertainment, there was no big movie that blew away expectations, but a few small ones were notable. I loved my friend Adrienne Shelly’s “Waitress” (she wrote and directed the movie before she was murdered in New York City in November, 2006) and if you want a real holiday treat this season, skip the tiresome formulaic pics like “National Treasure” and go directly to “Juno” a quirky film written by first-time writer Diablo Cody and directed Jason Reitman. Meanwhile, on the small screen, the simple pleasure of NBC’s “Friday Night Lights” and “30 Rock” can’t be beat.
But here is the absolute coolest thing about the year and Christmas of Small Pleasures: it hopefully made us all realize just how lucky we are to have so much. As thousands of servicemen and women are stationed overseas in harm’s way, I can’t help but think about the great fortune that we as American citizens enjoy. Next year is likely to be a big year, filled with election-year politics and plenty of vitriol. Try not to forget what a blessing it is to live in a society where we each are given the opportunity to express ourselves -- now that’s a great big gift that we receive each and every year, but rarely take time to appreciate.
I keep thinking that despite 2007 being the Chinese Year of the Pig, the year will be remembered more for small indulgences than big ones. In terms of financial stories, the subprime issue grabbed pig-like headlines, but for investors, the housing recession and credit woes got everyone refocused on single-digit investment returns, which frankly, were greatly appreciated, especially considering the alternatives!
On the holiday front, it is obvious that there was no big, “must-have” item either for kids or adults. But somehow, we found delight in some tried and true items: new video games; Apple i-products; and perhaps the strangest category, women’s shoes. While I doubt that most people gave a pair of Jimmy Choo’s or Manolo Blahnik’s to their gal-pals, perhaps a quick, guilty indulgence made its way into our bargain-hunting holiday season.
In entertainment, there was no big movie that blew away expectations, but a few small ones were notable. I loved my friend Adrienne Shelly’s “Waitress” (she wrote and directed the movie before she was murdered in New York City in November, 2006) and if you want a real holiday treat this season, skip the tiresome formulaic pics like “National Treasure” and go directly to “Juno” a quirky film written by first-time writer Diablo Cody and directed Jason Reitman. Meanwhile, on the small screen, the simple pleasure of NBC’s “Friday Night Lights” and “30 Rock” can’t be beat.
But here is the absolute coolest thing about the year and Christmas of Small Pleasures: it hopefully made us all realize just how lucky we are to have so much. As thousands of servicemen and women are stationed overseas in harm’s way, I can’t help but think about the great fortune that we as American citizens enjoy. Next year is likely to be a big year, filled with election-year politics and plenty of vitriol. Try not to forget what a blessing it is to live in a society where we each are given the opportunity to express ourselves -- now that’s a great big gift that we receive each and every year, but rarely take time to appreciate.
Monday, December 24, 2007
A Few of My Favorite Christmas Things…
No money talk on Christmas Eve day---it just seems a bit too crass! It took me a long time to really get into Christmas. I grew up in a Jewish (although not religious) family and although my mother absolutely adores Christmas trees and knows more words to carols than most gentile folks, we pretty much did the “Jewish thing” around Christmas. We did not go near the maddening crowds in the stores and on the day itself, we headed to the movies, followed by a feast at the local Chinese restaurant.
But when I moved to Rhode Island, my friend Joyce introduced me to her family’s Christmas tradition. I fell in love with it—from decorating the tree, to the countless meals involved. They are Italians from Brooklyn, NY so the major thrust of the holiday centered around fish Christmas Eve and the hand-made ravioli on Christmas Day. When I began to split my time between New York and New England, I found a New York-based Italian family to not only take me, but allow me to become part of their rituals.
In a nod to the season, it’s time to recount some of my favorite Christmas things. The list continues to grow, but here is where I am so far:
1) Selecting, schlepping and decorating the tree: Each year, I now purchase a new ornament that has some special meaning for me. Now if I could only untangle the lights!
2) Shopping: The true meaning of Christmas has nothing to do with presents, but I can’t help but throw my self into the gift-buying rat race. I love how beautiful the stores look and I am often amused by the frenzy that surrounds the season.
3) The tree in Rockefeller Center: I walk by the tree as often as possible to look at its beauty and towering glory. If you get a chance, check out the new GE (what else?) lights.
4) Christmas Day and Marie’s lasagna: By the time we have finished the appetizers, I am usually stuffed, but not too much to indulge in the most magnificent lasagna I have ever tasted. The turkey/ham that follows is a sideshow to the main attraction.
5) “A Charlie Brown Christmas”: The best Christmas TV program or movie, which happened to premier on my exact birthday. I love Linus’ soliloquy about the true meaning of Christmas.
6) Christmas Music: Mary Ann in my office asked someone whether it was OK to play holiday music on our system at work, “because I know that Jill is Jewish”. The response was, “Jill LOVES it!” My favorite is probably Bing Crosby’s original recording of “White Christmas.”
Take it from this nice Jewish girl, you do not have to be religious to enjoy this special season. I hope that it finds you and your families gathered together and celebrating the gifts that have been bestowed on you. MERRY CHRISTMAS!!!
But when I moved to Rhode Island, my friend Joyce introduced me to her family’s Christmas tradition. I fell in love with it—from decorating the tree, to the countless meals involved. They are Italians from Brooklyn, NY so the major thrust of the holiday centered around fish Christmas Eve and the hand-made ravioli on Christmas Day. When I began to split my time between New York and New England, I found a New York-based Italian family to not only take me, but allow me to become part of their rituals.
In a nod to the season, it’s time to recount some of my favorite Christmas things. The list continues to grow, but here is where I am so far:
1) Selecting, schlepping and decorating the tree: Each year, I now purchase a new ornament that has some special meaning for me. Now if I could only untangle the lights!
2) Shopping: The true meaning of Christmas has nothing to do with presents, but I can’t help but throw my self into the gift-buying rat race. I love how beautiful the stores look and I am often amused by the frenzy that surrounds the season.
3) The tree in Rockefeller Center: I walk by the tree as often as possible to look at its beauty and towering glory. If you get a chance, check out the new GE (what else?) lights.
4) Christmas Day and Marie’s lasagna: By the time we have finished the appetizers, I am usually stuffed, but not too much to indulge in the most magnificent lasagna I have ever tasted. The turkey/ham that follows is a sideshow to the main attraction.
5) “A Charlie Brown Christmas”: The best Christmas TV program or movie, which happened to premier on my exact birthday. I love Linus’ soliloquy about the true meaning of Christmas.
6) Christmas Music: Mary Ann in my office asked someone whether it was OK to play holiday music on our system at work, “because I know that Jill is Jewish”. The response was, “Jill LOVES it!” My favorite is probably Bing Crosby’s original recording of “White Christmas.”
Take it from this nice Jewish girl, you do not have to be religious to enjoy this special season. I hope that it finds you and your families gathered together and celebrating the gifts that have been bestowed on you. MERRY CHRISTMAS!!!
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