Every year brings a combination of creation and destruction. As the world looks forward to 2017, it's a good idea to take a look back at 2016 to see what has been left behind. Earlier in the year I wrote to you about the closing of the last Howard Johnson's in New England. I wrote: Investors are taking their eye off the ball. With all the hand wringing over what the Fed is—or isn’t—going to do with rates, there’s a much bigger problem lurking in most investors’ statements. It’s called survivorship bias. Most of the big movers never existed when I was a kid. Great ideas or concepts don’t last … [Read more...]
Archives for December 2016
This Danish Co. Owns 29% of the World’s Offshore Wind Capacity
The WSJ takes a look at some huge international wind farms and the ability to compete cost effectively with coal and gas. A Shell-led consortium won a bid this month to build and run parts of what has been hailed as the world’s largest offshore wind project, in the Netherlands. Upon completion, Shell’s portion of the so called Borssele wind project in the North Sea will give off enough energy to power about a million homes at prices that are comparable to cheaper power sources like coal or gas. Other oil firms have also ventured into wind energy partly because of the falling costs of … [Read more...]
Merry Christmas from Youngresearch.com!
You Know How to Buy, but do You Know When to Sell?
Why are investors better at buying stocks than they are at selling? This question and more were on my mind while reading Michael Lewis’ new book The Undoing Project. At the heart of it, the book is a love story (platonic) between two men, Israeli psychologists Daniel Kahneman and Amos Tversky, and their incredible work on how the mind alters our perception of reality. I won’t tell you more than that. But if you’ve read Moneyball by Lewis, you know the mind can play tricks on you. Reality isn’t an obvious thing. This book, as a continuation of the thinking in Moneyball, is about why it plays … [Read more...]
Trump is Going to Make 2017 an Interesting Year
Love him or hate him, Trump was undeniably an unconventional candidate for President and he promises to be an unconventional President. Unlike many in Washington, he doesn’t seem concerned with poll testing everything that he says. He speaks….err tweets his mind. Supporters view that as a refreshing change, while critics consider it a cavalier approach to governing. What about markets? Before Trump has even taken office, he’s had a major impact on markets. As you know, stocks have rallied strongly on the prospect of faster growth, lower taxes, and less onerous … [Read more...]
Fail to Adapt to New Technologies, Fail to Survive
Here is the first in my series of eight breakthroughs that bp.com predicts will be significant in the energy world. As year’s end, I will bring you all eight. Here bp.com explains to readers: None of us has a crystal ball to see what the future will look like. What we can be sure of though is that the world is changing rapidly and our lives will be very different by 2050. From mobility to healthcare, communications to education, as Bill Gates has put it: “Innovation is moving at a scarily fast pace.” Individuals and industries alike will need to adapt to these new developments, to make the … [Read more...]
SHENZHEN, China—A Sea of Skyscrapers too Massive to be Rolled Back
Here the WSJ explains Shenzhen’s deeply entrenched electronics manufacturing infrastructure and its thrust into design and branding. U.S. President-elect Donald Trump ’s threat to compel Apple Inc. and others to manufacture more at home should strike fear into this Chinese megacity where many of the world’s high-tech gadgets are made. Once a sleepy village, Shenzhen today is the sprawling epicenter of China’s consumer-electronics industry, the country’s top export. At two Foxconn Technology Group factories here, some 230,000 workers make gear for Apple and global rivals, including Chinese … [Read more...]
Are Parents Sick and Tired of Living with their Kids?
New data from the Census Bureau shows that almost 40% of young Americans were living with their parents in 2015. That's the highest rate since 1940. I have regularly encouraged Millennials to buy a home if possible (read here, here and here). Chris Kirkham reports in The Wall Street Journal that with so many young Americans living in their family homes, there's much lower demand for housing than there would be typically. The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the … [Read more...]
What is the Auto Market Forecasting about the Economy
Despite the positive signal that the Trump rally in the stock market is sending about the state of the U.S. economy, the auto market is adamant that we are in the winter stage of the economic expansion. Pro-growth policies from the incoming administration have the potential to prolong the expansion, but General Motors, Ford, and Chrysler are taking an, "I'll believe it when I see it" approach to growth. The WSJ reports that the Big Three have scheduled down-time at their factories of as much as three weeks in January to clear inventories resulting from cooling demand and shifting consumer … [Read more...]
Are Blind Trust and Greed the Two Worst Qualities in Investing?
On Monday I told you about a former public employee losing $25 million when he left to work at a hedge fund. Here is another completely separate case of a failure in trust. Both are examples of the blind trust and greed that are the undoing of so many investors. A businessman who is a focus of a federal corruption probe into the New York Police Department and Mayor Bill de Blasio’s fundraising helped arrange an investment of at least $10 million in a hedge-fund firm by the city’s correction officers’ union, people familiar with the matter said. Jona Rechnitz, a Brooklyn real-estate … [Read more...]
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