If you have watched markets long enough, you have seen cycles of vertical integration and decomposition occurring in companies competing in changing markets. Today this is happening once again. As AT&T and Verizon are snapping up content creation companies, Google and Facebook are busy developing their own information networks. Wired explains to readers how the media landscape is changing fast. TELECOMMUNICATIONS COMPANIES ARE becoming media companies. That explains AT&T’s agreement to buy Time Warner for $85.4 billion. But something else explains it, too. Media companies are … [Read more...]
Archives for October 2016
Is the Era of Local Cable Broadband Monopoly Ending?
For years cable companies have been bundling in phone and internet service with their traditional TV offerings. If AT&T's proposed purchase of Time Warner goes through, it will be the first telecom to to begin nationwide competition in the opposite direction. The Wall Street Journal explains what the proposed AT&T/Time Warner merger would mean. The Federal Communications Commission’s 2015 power grab over the internet is premised on the need for government to allocate broadband scarcity. So much for that. AT&T ’s $85.4 billion weekend bid to buy Time Warner is the latest bet, and a … [Read more...]
Monday 6:30am: It’s A Brand New Day
You’ll get your first view of U.S. third-quarter economic growth this week. The U.S. economy advanced at a pathetic 1.1% rate through the first half of the year. The Atlanta Fed cut its estimate to 2.4% from 2.8%. In any event, looking at an eighth straight quarter of growth below 3% is not very exciting. I like to think about GDP at the basic level, as though it’s a paycheck. Imagine two workers, A and B over their 40-year careers. If A can increase his salary by 4%, then after 40-years he will have increased it five times vs worker B’s doubling it after growing at only 2%. Time, and a … [Read more...]
Your Retirement Life: Survival is Your Friend
“I was married for thirty years, with three children and a house to manage and doing lots of charity work. Then came the divorce…” a reader wrote to me. I called her up this week and we talked. Our conversation wasn’t about her divorce. In fact it only came up once. We talked more about the success of her family and the financial independence they have achieved. But as she tells it, when she talks with them about their childhood they tell her it wasn’t always the best. I asked her what she meant by that. She said, "We didn’t have a lot of extra money for expensive vacations.” She explained, … [Read more...]
Why You Should be Watching China’s Currency
The Chinese yuan has fallen to a new six-year low as outflows surge. The central bank has either been overwhelmed by currency flooding out of the country, or it is allowing the yuan to drift lower to help the economy. The Chinese economy is the world's second largest, and China has long been a source of deflationary pressure in the world. A depreciating yuan points toward more deflationary pressure for the rest of the world. As you can see in our chart below, a depreciating yuan hasn't worked out so well for the U.S. stock market. Bloomberg has more on the weakening yen. China’s outbound … [Read more...]
There is Only One Vanguard
We are often asked why we like Vanguard and Fidelity. Below is an excerpt from the February 2014 issue of Richard C. Young's Intelligence Report in which Dick Young explains his history with Jack Bogle, founder of the Vanguard Group. As we all know, there is only one Vanguard. P.P.S. In 2014, investors poured $216 billion into the Vanguard Group, which today is #1 in index-tracking products. I have been with Vanguard from the start. Vanguard founder Jack Bogle was at Wellington Management back in the early seventies in Boston. Wellington was an institutional account of mine in the years I was … [Read more...]
Worthy Reads: U.S. economy getting dangerously close to recession?
Existing-home sales jump higher in September, helped by first-time buyers (MarketWatch) The U.S. Unleashes the Full Power of Shale (Bloomberg) SEC preparing major review of exchange traded fund industry (FT) ECB keeps rates at record lows (FT) U.S. economy getting dangerously close to recession? (FoxBusiness) … [Read more...]
Is Your Money with the #1 Online Broker?
"No surprises here as Kiplinger’s names Fidelity as the top online broker thanks to its mix of services, investing products, and retirement-planning tools. If you don’t have an account with Fidelity then you’re missing the boat,” I wrote to you in September. Choosing the right custodian could be one of the easiest, yet most important moves you make as an investor. Choose the right one. As Dick Young wrote in the February 2013 issue of Intelligence Report, it's very important to choose the best custodian. Choose the Right Custodian If you have not switched custody of your assets to … [Read more...]
Renewable Energy Expected to See Significant Growth
ExxonMobil at energyfactor.exxonmobil.com lays out the long-term growth story for both natural gas and renewables. Since natural gas emits up to 60 percent fewer emissions than coal when burned for power generation, utilities switching to more efficient, cleaner-burning gas power plants are spearheading the drive toward lower U.S. emissions. This environmental success story would be impossible without the increase in natural gas production from hydraulic fracturing in the Marcellus and other shale regions. ExxonMobil estimates that the biggest expected growth in energy demand over the … [Read more...]
Where Renting is More Popular than Buying
In the U.S., home ownership is regarded as a positive for society. The political class talks about an ownership society and promotes home ownership through the tax-code. Here Quartz explains why and how Germany became a country of renters. The home ownership rate in Germany, one of the richest countries in the world, is only 43% compared to 66% in the U.S. It’s just a fact. Many Germans can’t be bothered to buy a house. The country’s homeownership rate ranks among the lowest in the developed world, and nearly dead last in Europe, though the Swiss renteven more. Here are comparative data … [Read more...]
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