It's the last day of Cyber Security awareness month, and hopefully you have spent some time considering the state of your current cyber-risks. Are your passwords strong enough? Are the systems you're using secure? Are the people you're working with competent enough to protect your data? Here, Fidelity gives investors a checklist of their own to focus on improving cyber security. Online security is a shared responsibility. We believe that having a close partnership with you helps keep you safe, which is why we encourage you to enhance our security measures by taking some actions on your … [Read more...]
Archives for October 2016
Amazon Projects 4th Q Revenues of $42/45 Billion
The Wall Street Journal reports the huge importance of Amazon’s ability to rent computing power. Amazon posted its lowest quarterly profit in a year as it invested heavily to meet consumer demand for more orders delivered faster. The online retail giant said Thursday that opening new warehouses and shipping items with shorter delivery times caused its costs to soar in the third quarter. The company predicts heavy investments will continue through the rest of the year. Amazon opened 23 warehouses worldwide to fill orders since July, after opening just three in the first half of the … [Read more...]
The Great Distortion
We have written often on this site about the great distortion in financial markets caused by a long period of misguided monetary policy. Here the WSJ reports that the Japanese life insurance industry, managers of over $3 trillion in assets, is now looking to reach for yield in foreign government and corporate bonds because the Japanese Central Bank has mandated a zero percent interest rate on 10-year Japanese government bonds. Japanese life insurers have future liabilities that need to be funded. A zero percent return isn’t going to cut it so the reach for return isn’t much of a choice in … [Read more...]
A Potential Game Changer in Reducing Power Plant Emissions
A release by energyfactor.exxonmobil.com offers some real optimism. FuelCell Energy, Inc. and ExxonMobil have announced the selection of the James M. Barry Electric Generating Station, located near Mobile in Bucks, Alabama, as the site of a pilot project to test fuel-cell technology for capturing carbon-dioxide. This new approach has the potential to substantially reduce costs and lead to a more economical pathway toward large-scale application of carbon-capture technology. There’s no guarantee it will work on a large scale. But if it does, it could be, to quote FuelCell Energy CEO Chip … [Read more...]
Are Stop-Losses More Dangerous in Today’s Volatile Markets?
I have warned investors many times about the undependability and general riskiness of using stop-loss orders. When markets get volatile it's hard to beat the folks with the best technology. And even when you're competing on even ground, markets can simply become overwhelmed with stop-losses in a panic. Then your money is facing terrible odds. Dick and Matt Young and I made not using stop-losses our number one recommendation for 2016. This turned out to be good advice, especially if you were trading in currencies this year. Chelsey Dulaney writes at The Wall Street Journal. A report from the … [Read more...]
If More Rate Hikes are Looming, is Real Estate at Risk?
If markets really believe that Fed rate hikes are coming, will their impact be felt first in real estate markets that have enjoyed record low rates for the better part of a decade? The Financial Times reports: The US real estate sector faced heavy selling pressure on Thursday, as Treasury bond prices declined, amid rising expectations that the Federal Reserve will raise interest rates this year. The market-implied odds that the Fed increases rates in December have crept higher throughout October, hitting nearly three-quarters on Thursday from 60 per cent at the start of the month, as data … [Read more...]
State of Rhode Island Terminates Hedge Fund Investments
Back in 2013 I warned about Rhode Island's pension fund investments in high-fee hedge funds, writing here: It has allocated 25% of its plan to alternative investments, or hedge funds and private equity. Enormous fees are paid to these guys for an investment that a) is illiquid and b) has a subjective price. There are a lot of retired teachers out there who have no idea how poorly their money is being invested. Again earlier this year I reiterated this warning: The state of Rhode Island has been a big-time investor, through its pensions, in hedge funds. Retired teachers who depend on this … [Read more...]
Big Oil Companies to Focus on Shale and Acquisitions
The Wall Street Journal explains that the energy production landscape has changed for the majors. World-wide, oil-exploration spending last year was the lowest since 2007. There’s been less conventional oil and gas (as opposed to resources contained in shale or oil sands) discovered in the past 2½ years than in 2012 alone, according to Edinburgh-based consultancy Wood Mackenzie. Some in the industry say the decline in exploration spending will eventually contribute to an oil drought—and spiking crude prices. Saudi Arabia’s energy minister Khalid al-Falih told an oil conference in London … [Read more...]
How to Time Markets with Accuracy
Market timing is a tough business. Most professionals who try market timing lose. When self-directed investors pursue this strategy, the results are often dismal. Here The Economist explains one indicator that has been around for years that has shown success in spotting market turning points. You of course wouldn't want to go full hog on this strategy, but as a contrarian indicator, it has had some success. FINDING a reliable way of timing the market is something that has eluded the greatest investment minds in history. That is why many people are tempted by the “magazine cover indicator” as … [Read more...]
Could Innovative New Tech Stem the Retail Return Tsunami?
In 2015 Americans returned $260.5 billion worth of retail merchandise. That's an astonishing 8% of total sales. Much of that returned inventory can't simply be placed back on the shelf. If unsealed or broken, it can take too long to get items back on the shelf, and ultimately they become a loss for the retailer. But there is new technology on the rise that could stem at least some of the tsunami of returns plaguing retailers. The technology is called "augmented reality," and it allows customers to see versions of possible purchases in their home, even before buying them. Randy Rieland … [Read more...]
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