Lately, I've been obsessed with everything Jeff Bezos, CEO of Amazon. I'd love to own his stock, but not at these prices. Does that mean the stock is going down? Hardly! I just don't see the margin of safety—a term coined by the late, great Benjamin Graham who taught Warren Buffett a thing or two about investing. You won't be surprised by this, but Mr. Graham paid particularly close attention to one word: Dividends. Bezos' Amazon doesn't pay a dividend. But it does deliver. Sometimes the foyer at my house feels like a fulfillment center with all the boxes. Everything Bezos touches, like an … [Read more...]
Archives for September 2016
International Corporations Remain Committed to the U.K.
The Wall Street Journal breaks the news on a big Apple move in London. Silicon Valley giant Apple Inc. said Wednesday that it planned to relocate 1,400 employees to a new London campus in 2021, in a sign that international corporations remain committed to the U.K. after June’s Brexit vote. Its new offices will be in Battersea Power Station, an iconic former coal-fired plant featured on the cover of Pink Floyd’s 1977 album “Animals” and in the 2008 Batman film “The Dark Knight.” U.K. Treasury chief Philip Hammond said Apple’s new campus reaffirmed both Britain’s business environment and … [Read more...]
Deutsche Bank: This is How a Death Spiral Starts
Monday we wrote about the sharp sell-off in Germany’s largest bank, Deutsche Bank. We posed the question, is one of the world’s largest banks in a death spiral? While the verdict may still be out, things aren’t looking good for Deutsche Bank. Yesterday, Bloomberg reported that a number of funds that clear derivatives trades with the bank withdrew their excess cash and positions. This is how a death spiral starts for a big bank. A few counterparties start walking away and then a few more do the same and then the loss of business pressures results, and then a few more banks walk away and if … [Read more...]
Big Data Creates Big Opportunities for Investors
HP Matter lays out the exciting story of how Dig Bata is opening up a whole new world for sports investors. Making big plays as a sports investor used to mean buying and selling teams, locking in top talent and securing a killer sponsorship. Today, Big Data is getting into the mix and making technology the star. Sure, an analytics platform might not sound that sexy or make for high drama on social media, but savvy investors don’t mind—especially when they’re spinning data into gold. Whether the technology is in the boardroom, on the field or in the home, Big Data is rewriting the … [Read more...]
Should the Colossal Dodd-Frank Law be Repealed this Minute?
Viewers watching yesterday's Congressional hearings featuring Janet Yellen were met with fireworks as Congressman Sean Duffy excoriated the Federal Reserve Chairwoman for failing to end "too big to fail." Duffy's implication was that, despite the massive costs and burdens the Dodd-Frank legislation mandating the end of "too big to fail," America is still burdened by the bad policy. Mark Calabria, who I have met with and listened to at the Cato Institute, suggests that the failed Dodd-Frank be repealed altogether. After the bank bailouts of 2008, the public was promised “never again.” … [Read more...]
The Marvel of American Energy Productivity
Two years ago, the shale oil industry was knocked down. The house of Saud cooked up a scheme to put the U.S. shale oil industry out of business. Instead of limiting production, the Saudi’s decided to make a play for market share. Oil prices plunged as a result, reaching lows not seen since the height of the financial crisis. Some U.S. firms went bust, others slashed expenses, and many were forced to scale back their investment plans. But two years later, the U.S. shale oil industry is getting back up. Firms have adjusted to the lower price of oil by cutting costs and getting more … [Read more...]
Do the Words “Retirement Plan” Make You Calm, or Stressed?
Sometimes the best thing you can do for your investments is to create a plan. Easy for me to say I know. One way that's easy is to get a fresh start. Break bad habits. Start by consolidating with Fidelity, named by Kiplinger as the #1 online broker. Begin by rolling over that 401(k) into an IRA. Here's some of what you get by rolling over. What do you get with a Fidelity Rollover IRA? Help building a plan that keeps up with a changing market and can adapt as your needs change A wide range of investment options, including Fidelity and non-Fidelity funds, plus help choosing them An … [Read more...]
Lowering Tax Rates Improves Incentives For People to Earn
The Cato Institute’s Dan Mitchell boils economic growth down to one simple truth. Why don’t the politicians seem to grasp such indisputable common sense? Proponents of lower tax rates are motivated by a desire to improve incentives for people to earn additional income with more work, more saving, and more investment. That's the basic insight of supply-side economics. It has nothing to do with how they spend (or don't spend) their income. The well known Laffer Curve also suggests that lowering taxes may indeed increase government revenue as well. … [Read more...]
Worthy Reads: How much of America do foreigners really own?
Why So Few Economists Are Prepared to Say Recession Risks Are Fading (WSJ) Yellen Cornered by Lawmaker in Heated Exchange Over Fed Politics (Bloomberg) How much of America do foreigners really own? (MarketWatch) Julian Robertson: "Janet Yellen Has Created A Serious Bubble And Pain Is Coming" (ZeroHedge) Germany 'prepares Deutsche Bank rescue' (BBC) … [Read more...]
Is Your Wealth Manager Held to this Higher Standard?
If you choose to work with an investment advisor, wealth manager, financial planner, stock broker, retirement specialist, you name it, there really is only one question for you to ask up front. Are they held to a fiduciary standard or a suitability standard for all account types, not just IRAs? At Richard C. Young & Co., Ltd. we're held to the fiduciary standard (sign up for our monthly client letter here, free even for non-clients). The difference between the two are night and day. You would think this topic would be crystal clear. It’s not. Most are held to a lower suitability … [Read more...]
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