If you've been following the financial headlines this week you no doubt caught wind of a major upward spike in shares of Tesla Motors. Tesla has been one of the hottest stocks on the market over the last year. It is a bubble-lover’s bubble stock. While the S&P 500 has gained over 30% over the last twelve months, Tesla is up over 600%. The catalyst for the spike in Tesla stock earlier this week was an upgrade from Adam Jonas, the Morgan Stanley analyst covering the company. Mr. Jonas decided that Tesla wasn't worth the $153 per share he had estimated only a few weeks prior, but $320 … [Read more...]
Archives for February 2014
Can Your Portfolio Take a 50% Loss?
It's impossible to have it all ways. In order to craft an investment portfolio that can act as an all-weather armadillo, you must be willing to forgo potentially substantial upside rewards to balance against the horror of a downside wipeout. If you are retired or saving for retirement in the not-too-distant future, you can easily get a knot in your stomach when you look at the basic math of downside portfolio protection. By example, when you lose 50% on an investment, you must make 100% the next trip to the plate just to get back even. And that's without considering the negative drag of … [Read more...]
Did JP Morgan Know about Madoff?
Accusations are flying and the lawyers have been called in at JP Morgan to defend current and former executives, including CEO Jamie Dimon from accusations they were aware of the Ponzi scheme being run by Bernie Madoff. Attorney David Rosenfeld is bringing a new lawsuit based on interviews with Madoff himself. If any of the JP Morgan executives are found guilty, it could have a major effect on the company and its customers’ faith in its reliability. Reuters reports on the allegations. "JPMorgan was uniquely positioned for 20 years to see Madoff's crimes and put a stop to them," the lawsuit … [Read more...]
The 8th Wonder of the World
Saving money is hard. But the earlier it's started, the easier it gets. I was stacking quarters the other night to explain the concept to my kids. Saving money early helps to bring time into the equation. The result is compounding money–a phenomenon Albert Einstein referred to as the 8th wonder of the world. … [Read more...]
The Hidden Good News on the Labor Market
On February 15, Barron’s ran what many economists (especially those at the Federal Reserve) would consider a provocative piece on the labor market. Barron’s reporter Kopin Tan points out for readers that the labor market may be tighter than many economists are presuming. At Young Research we’ve long held the view that a meaningful portion of the high unemployment rate is structural. Structural unemployment is a problem, but not one that can be remedied with short-term stimulus. If you are a Barron’s subscriber the article is well worth a thorough read. Below are the highlights with the chart … [Read more...]
VIDEO: Senior, 64: ‘I’m never going to be able to retire.’
Yahoo! Finance: The road to retirement for many seniors looks grim. These seniors share their stories, echoing warnings from experts about the importance of making retirement a priority. … [Read more...]
What’s Your Lifespan?
I clicked through this lifespan calculator offered by Northwestern Mutual. Just click here to calculate your lifespan. Drawing down 1% per quarter (4% annually) from a portfolio is a good way to help avoid outliving one's money. Take a look at the chart below to see the effects a lower withdrawal rate will have on the lifespan of your savings. A $10,000 investment in 1945 would have lasted 54 years at a 4% annual withdrawal rate, but an 8% annual withdrawal rate would have burned through the nest egg in a mere 16 years. That's not enough for today's retirees who are living longer and … [Read more...]
What’s in a Name
Here's one take on the world's top brands. It's worth noting how many either don't pay a dividend or are not worthy of your investment. … [Read more...]
Let the Games Begin
Wait until Main Street gets a hold of all this money. … [Read more...]
Is the Fed Hiding its 2008 Transcripts?
We’re waiting to see the transcripts from the most tumultuous time in the last 50 years of economic history, and the Fed doesn’t seem to be inclined to let them go. It’s well past time the transcripts were released and now it’s starting to look a bit suspicious. The 2008 transcripts are sure to show us some very interesting debates and comments from the Federal Reserve officials involved, but is the Fed holding off for some reason? For the past three years the transcripts have been released in mid-January. The 2005 transcripts were released January 14, 2010, the 2006 transcripts on … [Read more...]