Yellowstone Partners Blog

Although the last few blog posts have also been links to WSJ Opinion pieces, we must again refer you to another insightful piece by Arthur Laffer.

http://online.wsj.com/article/SB10001424052748703977004575393882112674598.html?mod=rss_Today’s_

I once had the opportunity to hear the Oracle of Omaha speak in person at a Utilities conference. I was enthralled by his remarkably simple wisdom. If there’s one thing that makes Buffett who he is, it’s his ability to distill difficult concepts into easy, memorable phrases. This article draws out some of the best recommendations – the same exact principles that have guided his investment philosophy for dozens of years.

http://articles.moneycentral.msn.com/learn-how-to-invest/buffetts-tips-for-new-investors.aspx

I know this is a tired, tired story, but if you have any interest at all in re-living last year’s credit collapse, this is a nice way to do it.

http://jonathanjarvis.com/crisis-of-credit

It is a master visual compilation and explanation of exactly what went on in the 2008 Credit Crunch.

The advent of screen-scraping technology has caused for a revolution in budgeting. If you’ve ever wanted to track your expenses closely or monitor your net-worth in a way that doesn’t require hours and hours of data entry, you might want to check out http://www.mint.com.

Warren Buffett wrote an interesting Op-Ed piece in the New York Times recently. The subject of his discussion is the growing federal deficit and government’s efforts to resolve it through quantitative easing.

Buffett’s Op-Ed

Buffett makes some compelling points about the national debt relative to historic levels and the nature of inflation as a dangerously-wielded tool.

The interesting point in his observation is that for all of government’s projected fear and distaste for inflation, the truth is that it is their most effective tool to hide the consequence of their excesses, all the while devaluing the assets of individual citizens.

With inflation as an inevitable reality, the best way to combat it is to invest in assets which will outpace the rate of inflation – hard assets like oil, basic materials and precious metals.

We’ve been comfortable overweighting the materials sector for some time now given the prospect of aggressive global growth and emerging countries’ infrastructure outlay. The spectre of inflation only adds to the opportunity in this area.

Wells Capital Economist Jim Paulsen has been making some interesting comments about where he sees potential for GDP growth in coming years: the U.S. trade balance.

In its simplest terms, his thoughts are that the United States’ binge on cheap imports over the last few years has fueled the growth of a middle class in much of the emerging world, which will now be anxious to consume U.S. exports. Exports rising relative to imports will improve GDP growth to offset a slowdown in consumer spending.

That’s in line with what another savvy economist, Don Hayes, has been saying for years now: “The technology revolution produces a massive new flat world which ignites a spread of democracy which unleashes a huge sponge of new consumption which launches the greatest economic boom in the history of the world…”

With so much negative news out there, this is a scenario that is more fun to ponder.

Here is a link to an article in Barron’s about Jim Paulsen’s recent remarks.

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