August 15, 2013 4:32 PM
It all started with two western railroads needing access to Chicago and all of the rail traffic that flowed through there. James J. Hill and Edward H. Harriman the opposing railroad magnates ultimately set in motion an epic battle of wills to control access to Chicago—in the process, they nearly destroyed the entire financial system of the US and created one of the most famous short squeezes of all time.
Hill struck first and used his Northern Pacific railroad to purchase control of the Ch... more
August 7, 2013 6:31 PM
The rule with oligopolies is that eventually, someone cheats a bit—then everyone cheats a lot. That’s the reason that oligopolies rarely last very long—particularly when you are dealing with global commodities that are not all that scarce. Or at least, that’s how most economists think of the world. I would like to offer a slightly different axiom—if you are making too much money, you will also destroy the oligopoly due to new supply.
In almost any product, there is almost always a bit of ne... more
July 13, 2013 10:03 AM
Last night, a friend sent me this video http://www.youtube.com/watch?v=hlxHoboDz2k&feature=player_embedded with the subject line—“Bull market in tear gas. How do we get exposure…??” That got me thinking—I bet there is a raging bull market for the guys who produce this stuff.
As I watch the chaos in Egypt, Brazil, Greece, Turkey and other countries, I am reminded that even within the chaos, there are bull markets. Uncertainty and change create opportunity. As investors, we need... more
June 30, 2013 7:16 PM
Gold means lots of things to lots of people. To some, it is a store of value, to others; it is a barbarous relic from a long-ago era of archaic finance. To some, it is a day-trading product, to others; it is meant for jewelry and little else. The issue with gold is that it has lots of personalities. Those personalities are the embodiment of those that are buying and selling it on any given day. Sometimes, those personalities are in balance, sometimes one of them takes precedence. At the same... more
June 25, 2013 1:31 AM
Over the last few months, I have had this recurring thought. It sort of takes the form of a girl having a conversation with Ben Bernanke. I know, very odd, but bear with me.
Girl: Mr. Ben, why are you so sad? You’re the most powerful person on earth.
Bernanke: This deflation is unstoppable. I keep trying, but I just cannot figure out how to create inflation.
Girl: Mommy says that the price of everything keeps going up—that’s why we can’t go out for dinner anymore and why I can’t get any n... more