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Archives for April 2017

Investing in Your Survival is all about You

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One of the more important lessons I’ve learned about survival prep is that oftentimes the best teacher is failure. Surviving a bad experience has a way of focusing the mind. A couple of years ago we lost power in New Hampshire. Becky and I were away that weekend but our kids were staying with my parents who live up the street. When the power went out, my dad and daughter went down to our house to grab something and she noticed that the generator wasn’t working. The following week I had my electrician check it out and he said all was working fine. I thanked him and started thinking about … [Read more...]

Fed Finally Admits to Mistakes

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Janet Yellen takes the oath of office, administered by Governor Daniel Tarullo, on March 5, 2014. In a farewell speech, the outgoing head of regulation at the Fed, Dan Tarullo, finally copped to damaging impact the Volcker rule has had on market functioning. The Volcker rule was intended to ban proprietary trading at commercial banks, but the rule was written so poorly that it has paralyzed banks from making markets in many fixed income instruments. The FT reports The Fed’s top bank supervisor leaves on Wednesday following eight years in which he earned a reputation as a tough enforcer … [Read more...]

Solar on Track for Another Record Breaking Year in Canada

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The year 2016 was a record breaker for shipments of solar modules in Canada. Canadian Solar expects to see another record-breaking year in 2017. Renewables Now reporter Ivan Shumkov writes: The company expects to ship between 6.5 GW and 7 GW of solar modules this year, including some 6.17 GW recognised in revenue. This compares to the just-reported total solar module shipments for 2016 of 5.23 GW, of which 5.2 GW were recognised in revenue. Full-year revenue is projected to be between USD 4 billion and USD 4.2 billion, with 50%-60% coming from the solar module and components … [Read more...]

Scandal Plagued Wells Fargo gets Hit Again

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More problems at Wells Fargo. Emily Glazer and Ruth Simon report that the Merchant Services LLC branch of Wells Fargo has fired at least two dozen employees over the last two years after a probe found them falsely reporting customers' sales and pushing costly contracts on small businesses. This comes after the market-shaking scandal last fall that saw millions of fake accounts opened for customers without their knowledge. They write: Wells Fargo discovered the full scale of abuses in the merchant-services business after undertaking a broad examination of the bank’s business practices in light … [Read more...]

Is the Auto Market Signaling a Peak in Growth?

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U.S. auto sales for March were reported this week and they came in below economist estimates. Our chart below has a decidedly toppy look, highlighting the challenge the incoming administration faces in in accelerating economic growth. While the mainstream economic establishment will argue that expansions don’t die of old age, a satiated auto consumer certainly isn’t going to fuel an acceleration in growth. Keep an eye on the auto market. A continued drop in auto sales could foretell a broader weakening in the economy. … [Read more...]

In Search of a Better Burger: McDonald’s Goes Fresh

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Facing heavy competition from upstarts like Five Guys and old rivals like Wendy's that use fresh beef in their burgers, McDonald's has announced the roll out of fresh beef patties to it's restaurants in the 48 contiguous states. Since adding an ingredient to its menu usually makes McDonald's one of the world's largest buyers of that ingredient, there probably isn't enough fresh beef available to make every McDonald's burger. The company is rolling out fresh beef to its Quarter Pounders first. Daniel Victor writes at The New York Times that the change is one customers have been asking … [Read more...]

Is This the Calm Before the Storm?

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The average daily movement in stocks during the first quarter of 2017 was the lowest since 1965. What did stocks do back in 1965? Basically nothing for the next 16 years or, an entire retirement for many. That’s why you need to get paid to be in this market in the form of dividends. But how do you know which companies have the safest, most sacred dividends, and which companies look out for you, the investor? Allow me to help. My email address is ejsmith@youngresearch.com … [Read more...]

Bubble Stocks Dominate the First Quarter

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Stocks overall had a strong first quarter, with the S&P 500 gaining 6%, but it is the FANG stocks and shares of similar companies that performed best over the last three months. In the chart below we show the YTD performance of the NYSE composite index relative to the Young Research Bubble Basket. Our bubble basket is an equally weighted index of Facebook, Amazon, Apple, Netflix, Google, and Tesla. The bubble basket is up over 22% YTD compared to a 4% gain in the NYSE composite. Raging bullish sentiment among the investing public and compelling stories from many of these firms are no … [Read more...]

This is Why You Buy Companies in Strong Competitive Positions

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Imagination Technologies shares plunged as much as 69% in London trading today. Imagination Tech develops and licenses silicon and software intellectual property for system-on-chip devices. Shares are down on news that Apple decided to cease using the company’s graphics technology for new products including phones, tablets, and watches in 15 months to 2 years. Why did the stock crater so much on the loss of a single customer? Apple accounts for about half of Imagination’s revenue. At Young Research, we favor durable businesses with strong competitive positions. That isn’t am easily … [Read more...]

Make Sure You’re Not Part of This Disturbing Trend in 401(k) Saving

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According to the Investment Company Institute, a disturbing trend is growing among employees with 401(k)s, about a fifth of participants with access to 401(k) loans take them. American companies are trying to stem the tide, but borrowing against the cash is hard for some participants to resist, and for others it’s necessary to survive. Anne Tergesen writes: American companies are trying to stop employees from raiding their 401(k)s, in an attempt to ensure that older workers can afford to retire and make room for younger, less-expensive hires. Employers of all types—from Home Depot Inc. HD … [Read more...]