With summertime upon us, complete with tropical storm Cindy soaking the South, and nearly half of 2017 in the books, this might be a good time to review the progress and condition of the capital markets. While forecasting the direction of the markets is not...

“And a butterfly can flutter its wings over a flower in China and cause a hurricane in the Caribbean. I believe it. They can even calculate the odds. It just isn’t likely and it takes…so long.”
Robert Redford as card shark Jack Weil in Havana
“In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. The name of the effect, coined by Edward Lorenz, is derived from the metaphorical example of the details of a hurricane (exact time of formation, exact path taken) being influenced by minor perturbations such as the flapping of the wings of a distant butterfly several weeks earlier. Lorenz discovered the effect when he observed that runs of his weather model with initial condition data that was rounded in a seemingly inconsequential manner would fail to reproduce the results of runs with the unrounded initial condition data. A very small change in initial conditions had created a significantly different outcome.” The Butterfly Effect - Wikipedia

Yesterday, Sam, Jared and I were out around town and had multiple people ask us about the recent craziness in the stock market.  If you're not caught up with what's been going on here's a quick update.  On Tuesday the Dow Jones Industrial Average fell 272 points.  The next day it rose 274 points only to plummet 300 points on Thursday, marking the Dow's most erratic 3 days since August 2011.  It would appear that our old friend Volatility has come back for a visit.  So, what’s causing all the commotion?

Despite an overwhelming amount of evidence that passive investing over a lifetime generates far more wealth than active, hands on investing, most people still hold to their losing programs. It doesn't sound logical because it isn't. Logic has been overcome by the emotion of hope - the hope of winning big. Logic alone doesn't really have a chance, it is outgunned. For real progress, there has to be a third component.