Mickey Drexler, famed Gap and J. Crew fashion genius, has found that in the digital era, the rules of retail have changed. Rather than surviving on high priced signature looks, retailers must focus on price, speed, and accessibility. Drexler told The Wall Street Journal “We became a little too elitist in our attitude.” Khadeeja Safdar reports: Many visionaries focus on doing what they do best, even when the ground shifts beneath them. From newspapers to television, successful companies have been upended by disruptive technologies. Facebook Inc. is now the world’s largest publisher; Netflix … [Read more...]
Archives for May 2017
Where Can You Live the American Dream for Less than $2 Million Bucks?
California is dreaming. Where else in the world do regular homes go for well over $2 million bucks? There are cracks in that foundation. As an aside, take a look at the chart. The top three holdings in the MSCI USA Growth Index are: Apple, Amazon.com, and Facebook. Look familiar? Now forget about this chart. It’s scary. I don’t want to scare you. I want to point you to one of my favorite annual reports. Every year around this time, like Christmas in May, demographer Joel Kotkin and Pepperdine University public policy professor Michael Shires publish The Best Small and Medim-Size … [Read more...]
Could Demand for Oil Peak in 2020?
According to the IEA, a host of new efficiency measures, the rise of electric vehicles, and increased usage of bioplastics could combine to cap world oil demand by 2020. All these things together, which is what the IEA says would be required to limit global warming to within 2 degrees Celsius, would mean oil demand peaking around 2020 and declining by about 20 million barrels a day by 2040. That’s 36 million barrels a day lower than the average oil company forecast for 2040—a gap larger than OPEC’s current production. Some oil companies have acknowledged the potential for demand to peak … [Read more...]
They Call This Investing?
The FT reports how tech stocks have electrified the stock market, overtaking the so-called Trump trade. The performance has been driven by FANG stocks. Mutual funds that have been lagging for years are now jumping on the bandwagon to try to outperform the S&P 500. If you have been active in the markets for more than the bull phase of this market cycle, you already know how this ends. Emphasis is mine. The US stock market climbed another 1.4 per cent last week to close at a fresh record high but the tech industry has been the rally’s dominant fuel, particularly the “FAANGtastic five” — … [Read more...]
Just How Involved in Politics Should CEOs of Public Companies Become?
There are billionaire business owners on both sides of the political spectrum who spend tons of money on politics. Charles and David Koch are universally known as funders of right wing causes, and Michael Bloomberg probably spends more on gun control advocacy than anyone else. But these men all own their companies outright. Recently Ford CEO Mark Fields was replaced in large part due to his involvement in the 2016 political campaign, and his actions afterward. John D. Stoll writes: A longtime Ford executive, Mr. Fields is seen as having unnecessarily put the iconic car company on President … [Read more...]
How to be a Billionaire: Proven Strategies from the Titans of Wealth
Martin Fridson is one of the best high-yield bond analysts, period. I had a chance to meet Mr. Fridson when I started a small stock club at Babson College in Wellesey, Massachusetts in the early 90s. Two of my favorite professors at Babson are involved in this story. The first is Joel Shulman, who introduced me to Fridson. He suggested my stock group co-sponsor a talk by Fridson. Thanks to Professor Shulman, to this day, I have a signed copy of Fridson’s book Investment Illusions in my office. In looking up that book for this post, I found Financial Statement Analysis, now in it's fourth … [Read more...]
This Technology Could Change the Face of Renewable Power
Scientists working in Rutland, Vermont have installed a massive lithium ion battery at the Green Mountain Power, Stafford Hills solar farm. The battery charges up during the day when the installation's 7,722 solar panels are producing power at full blast. The power can then be fed back into the grid when the sun has set. Grid battery storage is something like a "Holy Grail" for power companies. Electricity is mostly a "use-it or lose-it" commodity, and planning generation around fickle renewable power sources like solar and wind can make it hard on utilities to operate. The research … [Read more...]
Believe in My Bezos Law; Invest with Mr. Dividend
Make no mistake. I am a believer in Jeff Bezos. I even coined a term in his name: The Bezos Law: If Jeff Bezos enters an industry, prices will be lower. But that doesn’t mean I’m a buyer of the stock. Remember the dot-com boom and bust? I do. I had a front row seat as a college intern with the founding team of a grocery home delivery start-up. It was the Webvan of the east coast, with the same unfortunate result; Bankruptcy. What went wrong? Turns out, among other things, shoppers like to pick their own produce. What’s changed? Not much, as far as I can tell. Will FreshDirect be … [Read more...]
Income Investing: The Nightmare is Ending
For eight long years, conservative investors, retired investors, and income investors have suffered through a nightmare environment. Risk-free income in the form of full-faith-and-credit U.S. Treasury bills has been held off the market by a Federal Reserve more interested in serving the interests of Goldman Sachs than America’s savers. As our chart shows, that nightmare appears to be ending. There is still a long ways to go to get back to normal, but an investment in 6 month T-bills will yield you more than a full percentage point in income today. It will only take you about 72 years to … [Read more...]
Bitcoin Mania
Is there a Bitcoin Mania? When we posted on Bitcoin last Monday we asked if you could be a millionaire by Thursday. Since that post went live, Bitcoin is up 61%. As our chart below shows, Bitcoin has gone parabolic. YTD Bitcoin is up 185% and over the last month it has gained 110%. Maybe Bitcoin will turn out to be everything its promoters claim it to be. What isn’t a maybe is that a chart of Bitcoin bares a striking resemblance to the charts of almost every bubble in financial market history. … [Read more...]
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