Weekly Market Review
Michael Acho
Guardian of the Wealth of the Most Productive People on Earth | Creating, Protecting and Distributing Wealth for Clients
Good afternoon,
Headline: The Russians hacked the Oscars!
That is the only logical explanation for such an egregious error this past Sunday night when the Hollywood elite inadvertently named the wrong film as winner of the most prestigious award in moviedom, the best picture. Oops. It had to be Vladimir Putin’s fault. After all, La La Land won the popular vote.
When that excuse fails, blame the accountants, https://www.hollywoodreporter.com/news/oscars-we-sincerely-apologize-moonlight-la-la-land-accounting-firm-says-980846
Aside from that faux pas and the minor fact that they showed an “in memoriam” picture of a producer who is still alive, the show went superbly well. We don’t care for the speeches or the political commentary and the whole thing takes about 3x as long as it should, much like a football game, but we do think that Jimmy Kimmel did a fine job as host. Now maybe we’ll get a chance to actually go see some of the movies they were celebrating.
In contrast to the finale of the Academy Awards, the last issue of the WMR worked just like it was supposed to. What do we mean by that? Well, it’s no secret as to why we send out the WMR each week. There are several reasons. We want to keep our clients and friends informed and updated about finance and the markets. We want to keep them informed about current events that we care about. We want to keep them informed and educated about things that we think are important at the time. Plus, our head would probably explode if we didn’t have an occasional outlet for our stream of consciousness. Consider us your financial do gooder, like a financial planning Superhero. Ok, that might be a stretch. We also don’t try to hide the fact that by putting out a WMR regularly, we strive to keep ourselves top of mind for our subscribers. That way, should something come up in their financial lives, they’ll remember that they just got a message from their friendly financial professional and hopefully they’ll give us a call.
That exact scenario happened after last week’s letter. We got a call from a friend who wants us to take a look at his mom’s affairs. “Your email reminded me that I’ve been meaning to get in touch with you.” He said. Great. That’s exactly what it is supposed to do. And just like in this case, the reader themselves may not be the primary subject. We get contacted frequently from readers about friends or family members or colleagues that they’d like us to talk to. Great again. No problem. As a service to our clients and friends, we often serve as a sounding board and/or offer second opinions for other people they care about.
So besides Russian Oscar hacking, here’s what’s on our mind this week.
Tax reform is in the news. President Trump’s new treasury secretary, Steve Mnuchin, has announced that there will be an announcement, hopefully before August regarding tax reform.
We don’t put much faith into predicting what the government (or the markets) might do, so we’ll just wait to see what comes of the new rules, if any, and react appropriately at the time. Like we’re fond of saying, we make the best decisions we can with the information we have at the time. If the information changes, we change our decisions.
It’s that time of year again, time for Warren Buffett’s annual letter to Berkshire Hathaway shareholders. Some of us may disagree with Mr. Buffett’s politics, though we suspect he’s more pragmatic than he lets on and at 86 years old, he’s earned the right to say whatever he’d like. But we can’t argue with his investment acumen. Here is this year’s annual letter, enjoy.
https://www.berkshirehathaway.com/letters/2016ltr.pdf
In other Buffett news, he’s about to win a bet he made 10 years ago,
One final story to share this week, and we apologize in advance because it’s a little slimy.
Regular readers know that the WMR loves teachable moments. We like to take an event and find a meaning or reason or moral in it when we can. So here’s a personal one. Our youngest daughter has been getting into slime lately. Not in a bad way, but in the way of making slime at home. The WMR considers itself fairly well read on current events, but the homemade slime trend had eluded us until our daughter proclaimed that she needed to gather certain ingredients in order to manufacture some slime.
Elmers glue is one of those ingredients. Sidenote: because of this trend, Elmers is now in short supply.
But that is not the teachable moment. That moment came when I asked my young scientist what she does with the slime after she makes it.
“I play with it.”
Oh. Then what.
“Then I give it to my friends and make more.”
Oh.
“Sometimes I sell some of it too.”
Oh. Wait. What? You do? The capitalist in me perked up. How much do you sell it for? And who do you sell it to?
“Fifty cents. My friends.”
Great! Teachable moment on a silver platter! Thus began my unsolicited econ lecture. Have you figured out how much it costs to make it? How much of each ingredient do you use? Why do you charge fifty cents? Then I prodded her to begin calculating the amount and cost of each ingredient and the value of her production time to determine if fifty cents was a reasonable retail price for slime. Alas, the profit motive doesn’t seem to be one of her driving concerns. She wasn’t very interested in any of the calculations or underlying economic rules. She just likes the fact that she can make the stuff and that other people want what she makes. Her reaction reminded me of an old commercial I used to hear when I was a kid. I think it was for a car dealer, but I might be mistaken. The pitch went something like “our prices are the lowest in town, we lose a little on every deal but make it up on volume.” Which didn’t make any sense even to my 10 y/o self.
That all reminds me of an SNL bit, the First CitiWide Change Bank. We work with our customers to give them the change they need. “If you give us a $100 bill, we won’t give you 2000 nickels. Unless 2000 nickels is what you need.”
https://www.nbc.com/saturday-night-live/video/first-citywide-change-bank/n9701?snl=1
LF23 – “Have no fear of perfection, you’ll never reach it.” – Salvador Dali.
Have a great week.
Michael J. Acho, MBA, CFP? Private Wealth Advisor --------------------------------------------------- Lincoln Financial Advisors/Sagemark Consulting 1000 Town Center, 26th Floor Southfield, MI 48075 248-948-5100 direct 248-948-5101 fax 248-933-4339 cell [email protected] https://www.dhirubhai.net/pub/michael-acho/27/913/3a8
CRN-1720610-022717 If you do not want to receive future emails, please call me at 248-948-5100, or email me at [email protected] or write me at 1000 Town Center, 26th Floor, Southfield, MI 48075. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances. Please do not send any trading or transaction instructions through this e-mail. They will not be honored or executed. Should you require immediate assistance, please call the Lincoln Financial Advisors Trade Desk at 1-800-237-3815. Michael J. Acho is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker-dealer, registered investment advisor and an insurance agency. Insurance offered through Lincoln affiliates and other fine companies. CRN-1349178-111015