A Tale of Two Independent Counsels

Written by Alex Shen, CFA on .

In March, special counsel Robert Mueller subpoenaed the Trump Organization to turn over documents related to Trump’s business interests in Russia. Getting into Trump’s family finances could run afoul of a red line previously drawn by the President, who subsequently assailed Mueller on Twitter and raised speculation that he would fire the special counsel. The FBI’s more recent raid of Trump’s longtime lawyer, Michael Cohen, only increases the intrigue.

These developments make a 40-year old series of events suddenly very interesting.

In mid-1973, Watergate independent special prosecutor Archibald Cox issued a subpoena to President Richard Nixon asking for copies of taped conversations recorded in the Oval Office. The President refused to comply and later ordered Attorney General Elliot Richardson and Deputy Attorney General William Ruckelshaus to fire Cox. Both refused and resigned. Solicitor General Robert Bork considered resigning but carried out the order. This series of events, known as the Saturday Night Massacre, sped up Nixon’s political demise.

For Trump, firing Mueller is equally inconvenient. Republicans hold both the Senate and the House, making impeachment proceedings seemingly unlikely, so it is notable that Republican Senator Lindsey Graham, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell all warned the President to leave Mueller alone, with Graham ominously stating “it would be the end of President Trump’s presidency.”

While the tweets attacking Mueller stopped in March, the Michael Cohen raid is once again raising speculation that Trump may fire Mueller.

For investors, the question is what impact Washington’s high drama could have on the stock market. A cursory glance at history raises red flags: in the 10-month period from the start of Nixon impeachment proceedings to his resignation, the S&P 500 dropped a stunning 43.5%.

Watergate vs Trump Transparent

What Can We Learn from the Headlines?

Written by Andy Pratt, CFA on .

When in the midst of a stock market selloff I like to go back and read the headlines from recent market corrections.  There are many measured, reasonable takes but headlines exist to grab attention and often do a good job describing what it felt like to be in the middle of the selloff.

In August 2015, oil prices were cratering and companies were in the middle a protracted earnings recession. It didn’t seem like the fall in corporate earnings was going to reverse any time soon and no one knew if the Federal Reserve was about to start pumping the brakes on the economy. The fall in stock prices felt justified.

201508 Headline

Stocks are up 33% since.

The Economy Can Only Grow So Fast

Written by Andy Pratt, CFA on .

Today, the Bureau of Labor Statistics released its monthly “Employment Report” that showed the U.S. added jobs for the 86th consecutive month and unemployment remained in the range of full employment at 4.1%.  While the recovery out of the Great Recession was slow, we are currently beyond the recovery phase and into the expansion phase. Just this past month, the economy finally hit a major milestone, reaching its potential growth rate after an output gap that lasted for nine years.

Economists measure the economic health of a country through a measure of economic growth called GDP. In advanced economies like the U.S. where the total level of GDP per capita is already high, potential GDP growth is limited compared to developing countries where productivity gains through better technology and infrastructure are still being implemented.  The CBO estimates potential GDP, revising estimates as new information about the labor force and productivity become available. Long-term, this growth rate is estimated at 1.8%.

November Size and Style Update

Written by Alex Shen, CFA and Andy Pratt, CFA on .

Value stocks turned back in favor in November as the Senate passed a tax bill proposing lower corporate taxes and more favorable tax treatment to income earned abroad. Companies in Value oriented sectors, like Consumer Staples and Financials, tend to pay higher tax rates than companies in Growth oriented sectors, like Information Technology, and, as a result, stand to benefit most from corporate tax reform. Despite this, Growth stocks have still outperformed year-to-date and remain the long-term trend.

InvestmentNews names the financial advice industry's 2017 “Best Practices”

Written by Burney Company on .

StandardLogo BP AwardWinner logo copy
October 17, 2017, Boston, Mass. – InvestmentNews today named The Burney Company (Burney Company Investment Management) a winner of the 2017 Best Practices Awards, an important initiative that recognizes the top-performing and most innovative firms in the financial advice industry.

The winners of the InvestmentNews Best Practices Awards were identified through their participation in the 2017 Adviser Compensation & Staffing and the 2017 Adviser Technology Study. The winning firms were officially recognized today at InvestmentNews’ Best Practices Award and Workshop, which was hosted at The Colonnade Hotel in Boston.

"The Best Practices winners are some of the most strategic and successful firms in the advice business," said Mark Bruno, associate publisher at InvestmentNews and head of InvestmentNews Research. "Their leaders have a clear plan and vision for growing their firms and managing elite organizations. Acknowledging their accomplishments and telling their stories will help educate, inform and influence the growth of the overall industry.”

To identify the 2017 Best Practices Award winners, InvestmentNews Research created composite scores that examined several key metrics from its core benchmarking studies – including a firm’s rate of growth, profitability and productivity level. The data was obtained from over 700 independent advisory firms that participated in the 2017 Adviser Compensation & Staffing Study and the 2017 Adviser Technology Study. The “Best Practices” were those who ranked among the top-quartile of all participants; in addition, the final firms were selected after qualitative interviews conducted by the InvestmentNews Best Practices Committee.