It is no secret that research from the big brokerage houses once had a reputation for being compromised by investment banking relationships, but following the dotcom bust, the regulatory apparatus assured the investing public those problems were solved. That now seems like a sick-joke perpetrated on unsuspecting investors. Investors who follow the markets closely knew from the start those regulations wouldn't fix the problem. Wall Street is and always has been in the business of distributing securities. The research-arms of the big banks should be thought of as a branch of the marketing … [Read more...]
Archives for January 2017
Is This Solving the Pension Problem?
How many consultants do pensions really need? It's a pretty simple problem: Pensions are underfunded and are dependent on unrealistic future returns. That's not stopping the independent reviews. This from the Boston Globe: The pension fund has been in a period of upheaval since December 2013, when it was revealed that it had lost $25 million in a bankrupt hedge fund whose troubles it had failed to disclose for more than two years. Since then, Governor Charlie Baker has named three new “management” trustees to the fund’s board and has signed a new public records law that requires the … [Read more...]
What Happens When Microsoft Buys a New AI Startup?
Microsoft has announced the acquisition of the deep learning/artificial intelligence startup, Maluuba. The AI program's focus is on natural language understanding, and Microsoft expects the technology to help improve question and answer and decision making systems. Harry Shum, Executive Vice President of Microsoft's Artificial Intelligence and Research Group wrote about the acquisition saying: We’ve recently set new milestones for speech and image recognition using deep learning techniques, and with this acquisition we are, as Wayne Gretzky would say, skating to where the puck will be next — … [Read more...]
These are the 5 Best “Intelligent” Cities in the World
An astonishing global revolution is underway that will dramatically change the way the world economy functions. A surprising list of pioneering cities are at the forefront of a ground breaking movement. Read here from hpematter.com about the big five IoT breakthrough cities of the future. The smart cities of the future are being designed and built now—with dozens of urban centers around the world leveraging technology to rebuild themselves for the future. Smart cities promise more efficient, safer, more livable urban areas despite the demands placed on them by increasing congestion and … [Read more...]
You’ll Be Surprised When You See Amazon’s Astonishing Job Plans
On our drive to New Hampshire we pass by an Amazon fulfillment center in Fall River, MA. The time it takes to drive the length of the building, going 65 mph, is breathtaking. I’ve never seen a larger warehouse with so many truck bays. And now Amazon is looking for office space in Boston to host some of the 100,000 new jobs it plans on adding over the next 18 months. The Boston Globe reports Amazon's strategy in Bean Town. Amazon.com Inc. said Thursday that it plans to add 100,000 jobs nationwide over the next 18 months. And it sounds like that could include a big expansion into Boston. The … [Read more...]
Are You one of the 22% Making this Sinful Mistake in Your Portfolio?
According to the Employee Benefit Research Institute, 22% of people in their 60s have more than 80% of their 401(k)s allocated to equities. With only a few years left until retirement, an 80% allocation to stocks is asking for trouble. An 80-20 mix of stocks and bonds can experience crushing losses that are difficult to recover from—especially if one is already taking an income stream from the portfolio. Our chart shows the drawdown of an 80-20 portfolio invested in the S&P 500 and the Merrill Lynch Government and Corporate Bond Index and rebalanced annually. The drawdown is the … [Read more...]
This is a Horrifying Black Swan Risk
Artificial Intelligence offers profound promise for future productivity and optimal decision making. AI is likely to touch or have an impact in almost every industry. But there are also some with deep knowledge in the technology industry who fear a frightening outcome. The Financial Times has the story. A new arms race in artificial intelligence and robotics risks spiralling out of human control, according to a report paving the way for next week’s World Economic Forum in Davos. The WEF’s annual Global Risks report highlights mounting concern at the few regulatory constraints on AI … [Read more...]
Can One Man Smash the Business Roadblocks in Teetering Illinois?
With the recent passage of a Right to Work law in Kentucky, Illinois is nearly surrounded by states with such laws. Only Missouri, far away from Chicago, the industrial heart of Illinois, remains a union state. With at least five Right to Work bills working their way through the Missouri legislature and headed toward the state’s newly elected Republican governor, it’s likely that soon Illinois will be an anti-business island in a sea of pro-business states. Additionally, three of Illinois’ neighboring states have lower corporate income tax rates. Today Illinois demands 7.75% from its … [Read more...]
Watch What Happens to Obama’s Costly Transport Rules on the 21st
The WSJ makes an excellent case that the Obama administration's executive order writing against the transportation industry needs to be throttled back. Leaders of the industry trade groups say they are trying to unite transport representatives in Washington, including airline, automobile and shipping groups, in the effort to reverse Obama administration-era safety initiatives and slow the process for enacting new regulations. The Obama administration, through agencies that oversee trucks, railroads and highways, has written a series of freight and passenger transport rules in the past … [Read more...]
Amazon’s Assault on the Mainstream Retailers Yields Massive Gains
This is a powerful graphic from the Visual Capitalist. At year-end 2016, Amazon had a market cap of $356 billion. The combined market cap of Walmart, Target, Best Buy, Macy’s, Kohl’s, Nordstrom, JCPenney, and Sears is only $298 billion. Amazon is now worth more than most of America’s major department stores combined. Revenues at big box and department stores fell by almost 40% over the last ten years. Sales at Amazon increased more than ten-fold. What about profit? Despite Amazon’s 10-fold increase in sales, there has only been a marginal improvement in profit margins and much of that … [Read more...]