I was an auditor with Arthur Andersen many years ago. We would send confirmation letters to banks to verify cash balances. Weren't any audit tests used to verify this cash balance valued at 25% of total assets?

I thought it was despicable when, 4 years ago, people were diagnosing Trump as having a mental illness and I find it equally despicable that the Trump enthusiasts are now projecting those same ailments onto Biden. It appears to me that almost everyone over 70 years old stumbles over their words now and then. Prof Siegel’s recent interview with Ritholtz is just one example - but please, no one would say Siegel isn’t capable deep thought. And unless you are a mental health expert using a formal process you shouldn’t say it about anyone either.

https://cnn.com/2020/06/23/tech/wirecard-ceo-markus-braun-arrested/index.html

Wirecard (WCAGY) acknowledged on Monday that €1.9 billion ($2.1 billion) in cash included in financial statements — or roughly a quarter of its assets — probably never existed in the first place. The company withdrew its preliminary results for 2019, the first quarter of 2020 and its profit forecast for 2020.

I can't tell you the number of times I've seen this company as a top holding at international small cap funds such as Wasatch's, Artisan's, Oakmark's and Grandeur Peaks. Although I don't think it's a top holding anymore, this CEO Braun has been in charge for many years and I wonder as with the Sequoia Fund/Valeant and Oakmark/Washington Mutual cases what it says about active management that such frauds go undetected for years. Active fund managers get paid a lot of money to ostensibly do deep research on companies. Yet when these scandals happen you usually don't hear boo about it from them, and I wonder if they either completely missed the fraud despite their deep research or, worse, kept quiet about it. Do managers/analysts report financials that look weird to authorities? And why do they so rarely say anything about the fraud after the fact? I'm not pointing at any particular manager. I'm saying this in general always makes me a little more skeptical about managers' abilities. It seems like this fraud may have been ongoing for years, just like it was in the other examples.

John’s been betting on economic and stock market collapses forever. We finally got the 30% bear market he’s been prophesying for about ten years and 20,000 Dow points. Unfortunately, it only lasted like two weeks and the market immediately rebounded. That’s got to be frustrating, waiting all that time to be right and then being right for a different reason and then it comes and goes in a blink anyway…

something-to-hate-for-everyone/
Hussman's Petition:
house-committee-on-financial-services-senate-banking-committee-stop-the-federal-reserve-from-printing-money-to-buy-junk-bonds?

Again, again, why post this drivel?
This MIchael Lee guy does not know historical correlations of taxation and returns.
>> As controversial as President Trump is, market pros would contend that these types of moves upward in equities wouldn’t necessarily happen if the market was sniffing out the real possibility of a blue wave and higher taxes under a president Biden. There is still time for that pricing in to happen if Trump continues to stumble in the polls, but to Lee’s point the market may simply view Trump as friendlier to one’s investments and the economy at large and that sticking around for four more years.
“I do think for the overall economy, a Trump administration would benefit the masses more than those with financial assets,” Lee adds.

Laughable.
I do not know the longer term, but if Trump loses, the market the next day will jump yugely, I think, just from relief.

perhaps of interest; taken, though not verbatim, from email and docs making the rounds at GS
Subject: Some assorted market stats and anecdotes about what has happened in the last months

It has been a few months of records. They say a lot about the relationship between risk-taking by economic policies and financial conditions.
1. 2020 has likely featured the sharpest -- but the shortest -- recession in US history (certainly since the 1850s for the US, and since WWII on a global scale).
2. in turn, we’ve just seen the strongest rally out of a bear market since ... 1932.
3. the US alone had conducted $2.3T of QE in the past three months (Treasuries + mortgages). For those keeping score at home, that’s an average of around $35B of bond buying per business day since mid-March.
4. GIR expects zero interest rates in the US for several more years -- until the economy reaches 2% inflation and full employment -- which is perhaps not until 2025.
5. largely thanks to fiscal support, GIR expects US disposable income to grow 4.0% in 2020.
7. USTreasury planned to borrow $3T in Q2 alone; despite that supply glut, we’re just off the alltime low yields in US 2y notes and 5y notes.
8. in that same general context, US 30yr mortgage rates are down to alltime lows .
9. the past six weeks have seen the largest amount of global equity issuance on record, at $205B.
10 and 11 are driven by the Fed purchases of corporate bonds:
10. March saw record outflows from corporate bond funds (-$42B); we’re now witnessing record inflows to corporate bond funds (+$85B since the start of April).
11. it’s not just that we’re witnessing record new issue in the credit markets, it’s that we’re also seeing record low corporate financing costs (e.g. AMZN raised $10B of capital at the lowest 3/5/7/10 and 40y yields ever).
What is the rationale for buying 40y bonds now? Don't they want more flexibility? Don't they think that there is a high probability that underlying conditions will change well before 40 years?
One possible explanation: as yields get lower, investors have to go out the yield curve (thus take more duration risk) in order to obtain higher yields (think of a pension fund that needs to generate a fixed return). This would be one example of the portfolio-rebalancing effect of QE. Also note that few investors ever hold bonds to maturity, and a 40y bond would "enjoy", because of its longer duration, a large price appreciation should interest rates fall further (of course the opposite is true if rates increase). Recall that, in 2018-19, the Austrian 100y bond doubled in price as yields declined from 2 percent to 1 percent.
So this would be investors betting that interest rates will not increase from here and may decline further.
12. March saw record outflows from equity mutual funds and ETFs; one can argue we’re now seeing legitimate signs of retail investor euphoria (e.g. a record # of account openings at US retail brokers).
13. subject to interpretation: the market cap of MSFT is larger than the entire US HY market.

One of these years he'll be right again....

Right you are, @msf. That class of the fund has lost an average of 4.18% over the past three years. Even FMI Common Stock has barely broken even.

https://www.google.com/amp/s/www.marketwatch.com/amp/story/suze-orman-urges-investors-to-stay-away-from-traditional-401ks-2020-06-17
Suze Orman: ‘You have to be crazy’ to put your money in this investment
Published: June 19, 2020 at 1:24 p.m. ET
By Shawn Langlois
‘Do you really think that tax brackets aren’t going to have to go up five, 10, 15 years from now in order to pay for all the debt that we’re carrying’
Dont think I am crazy. Ms Orman maybe indeed nutty

Ironic that American Beacon continues to maintain direct account services, but now they will not allow new direct accounts to be opened via exchanges or new applications. Janus Henderson reopens its "D" share class accounts after being closed for 11 years.

This is great. Janus Hederson has a number of good funds, and for years nearly the only way a new Janus investor could purchase shares was to pay an extra 10 basis points for T shares though a brokerage (NTF).
DIY investors do also have an option to purchase I shares through Fidelity (and only Fidelity) by paying a TF, but those shares save just 5 basis points over the cost of D shares. With such a small savings, it takes a long time or a large account to make I shares worthwhile.
Now that Janus is reopening its direct sales channel to new accounts, smaller investors have access to a low cost share class (D) of a relatively low cost family of actively managed funds.
Note that D shares continue to be sold only directly through Janus. I suspect this is due to brokerages refusing to sell retail shares unless they can collect their 40 basis points from the fund family to sell the retail shares NTF.
There's a 2018 thread that covers this (not some of my clearest writing, though).
https://mutualfundobserver.com/discuss/discussion/40037/series-d-n-mutual-funds-the-new-share-classes-of-the-future

Hi guys. I agree with Ms. Schenone about not putting all of ones eggs in one basket.
An interesting fund that makes up about 9% of my hybrid income sleeve is AZNAX. This fund has a distribution yield of 7.7% and disburses 7 cents per share per month. To do this, it is very active in the market with its positioning as it has a 66% turnover ratio. Part of the distribution comes from capital gains and the other parts from dividend and interest income. And, at times, it has also returned some principal. I have been an owner of this fund for better than five years and so far through the years that I have owned it I am net positive on my principal investment plus what it has paid out to my pocket.
For me, it has been a good income generator. If it were not already at a full allocation within its sleeve I'd buy more of it during stock market downdrafts.
This is also a fund that @Scott, who use to post on the board a few years back, touted.
In checking Scott's MFO handle he was last active in December of 2016.
Old_Skeet

Some of us have no choice but to fly. But I can't complain. I knew a guy back on the Mainland, way back 20 years ago, who quit flying and drove everywhere. Too much hassle, even back then.

When I was a child, we met an air traffic controller on the Great Northern Railroad. He loved planes. He hated airports.
If anything is bound to get worse for the rest of us, it's air travel.

Some of us have no choice but to fly. But I can't complain. I knew a guy back on the Mainland, way back 20 years ago, who quit flying and drove everywhere. Too much hassle, even back then.

Interesting...maybe the year of the RV?

There’s an interesting thing happen between the rate at which flying returns versus driving. It’s intuitive that people taking trips this summer would prefer to do so by car, with gasoline being cheaper and proximity to strangers being shunned. I think it could be years before we’re flying at the rates we used to.

driving-not-flying/

When it rains it pours ... Reading MFO and following Bloomberg ... it now appears that we are in the midst of an inflated dollar ... inflated bond market ... and inflated equity market.
Where to hide?
- It’s hard to call cash “inflated” at today’s rates.
- Oil was twice as expensive 10 years ago as today.
- Japan’s Nikki 225 stock index isn’t yet back to 1980s levels.
- Silver was more expensive in 1980 than now.
- Many Latin American countries are mired in debt, unstable governance, corruption and rampant Covid 19. These are scary scenarios. On the other hand these are the kinds of conditions that can prick bubbles and reward long term patient investors.
Longer term: U.S. equities may well have attained “bubble” status. But those who’ve invested in them over the past 30 years (and longer) have been laughing all the way to the bank.
Perspective: I graduated from HS in ‘65 with little knowledge of investing (aside from saving cash acquired caddying). A friend in college (around ‘67-‘68) introduced me to her dad who was selling mutual funds as a second job. That was the first I ever heard of them. He talked them up optimistically. We’d just been through a serious market correction and most average people feared stock investing. Since that time, markets have experienced multiple bull and bear markets. The term “bubble” gets tossed around loosely. If there were bubbles along the way, after they burst the U.S. market went on to even higher levels.
Link: Linked article discusses the highs and lows in the U.S. market since my own initial 1967-68 reference period. https://www.fool.com/investing/general/2013/02/25/bear-markets-in-modern-times.aspx Others here who date back to the ‘30s, ‘40s and ‘50s may want to share their even earlier recollections.

Fidelity data shows nearly one-third of their investors 65 and older sold all of their stock holdings at some point between February and May while just 18% of all investors across their platform sold out of stocks.
I had a number of discussions with investors who were contemplating selling out of stocks in March. Many we retirees who worried about how an extended downturn could impact their retirement plans.
I understand why this group is more trigger happy with their portfolio. The U.S. stock market was up 10 out of 11 years heading into 2020. This crisis was looking like it could turn into Great Depression 2.0.
We’re living in scary times.
But scary times and panic are never good reasons for selling out of your stocks.

https://awealthofcommonsense.com/2020/06/when-should-you-sell-your-stocks/

Every time I read about Grantham I try to remember what "Adam Smith" wrote about him years ago, when Grantham was a young man.
So, I went looking. While I have concluded I'm just going to have to re-read "Adam Smith," I did find a wealth of quotes that might come in handy for investors of a certain frame of mind:
Here.
Here.
And here.
Besides re-reading "Adam Smith," I think I need to pick up a copy of Where are the Customer's Yachts?, by Fred Schwed Jr. "Smith" was certainly all about preserving principal.

Sorry, Jeremy Grantham was wrong so many times since 2010 that it's not even funny but sad.
He predicted at the end of 2010 that US stocks will lag EM but he also was way, way off about several categories performance.

Example: he said that US will make 2.5% inflation + 0.4% = 2.9% yearly average in the next 7 years. The SP500 made 14.45% in the next 7 years (link)
All these "experts" are wrong because of Fed intervention.
Bottom line: add another false prediction.

"When Russian table tennis or Korean baseball won’t scratch the itch, some are trying their hand at trading equities. It’s enough to move the market, analysts say."
"Millions of small-time investors have opened trading accounts in recent months, a flood of new buyers unlike anything the market had seen in years, just as lockdown orders halted entire sectors of the economy and sent unemployment soaring. It’s not clear how many of the new arrivals are sports bettors, but some are behaving like aggressive gamblers. There has been a jump in small bets in the stock options market, where wagers on the direction of share prices can produce thrilling scores and gut-wrenching losses. And transactions that make little economic sense, like buying up the nearly valueless shares of bankrupt companies, are off the charts."
https://www.nytimes.com/2020/06/14/business/sports-gamblers-stocks-virus.html
Zany action in recent days has me convinced. Apparently these guys (and gals) are watching every short term development or coment by an official and placing wagers on which way the indexes will move.
- Week ago - Payroll numbers better than expected - Powerful up day
- Thursday - Covid 19 redeveloping in China - Powerful down day
- Monday - Friday's steep dive continues until Fed Chair Powell reveals Fed is buying Corporate bonds - Market reverses, makes up 700 point drop (Dow) and ends day higher
- Tuesday - Monday's rally continues after strong overnight futures - some based on reports of a trillion dollar infrastructure plan in the works. Morning's hotter than expected retail sales numbers add fuel to the fire.
- Later Tuesday - Dow falls about 500 points from day's high, apparently on comments Fed Chair Powell makes to Congress that deficit spending will hurt us longer term. But later recovers (based on whatever else he said)
Just watching. You'd need to be insane to try to time or outsmart this market. A lot of short term dumb money sloshing around.