Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
There’s a narrative being pushed in the mainstream media right now that people should buy stocks because they are “on sale.” Here are some examples of stocks which people gobbled up late last week. As of Monday’s close, they have already have lost almost half their value from the purchase price. I would point out that these losses were in the face of a nearly 700 point gain in the Dow on Monday!
People are understandably in a funk these days. They’re trapped in their houses. People are sick or dying. Every day greets us with more grim news.
One thing which has been surprising to me throughout my life is how some of the greatest blessings have been born from what seemed at first to be negative circumstances. I thought I’d share three unrelated anecdotes to make my point.
The first is from back in 1994, when my little business Prophet was at the cusp of going under. (If you’re interested in the history of Prophet, there’s a cool documentary about it here.) I had started the company with an investor (the fabled Andy Bechtolsheim, now one of the richest men in the world) and a programming partner.
(more…)In a previous article, I presented a rough approximation to help illuminate how the Covid-19 outbreak might affect the value of American stocks as represented by the S&P 500 Index. Here I take a deeper drive and provide a full spreadsheet model. In the model, the virus has two fundamental effects. First, it depresses earnings next year and second it prevents earnings from ever meeting pre-virus expectations. The best way to see how this works is with reference to the graph below.
