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Archives for June 2017

Bill Gross Sounds Scared of This Market: Should You be Too?

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Janus Global Unconstrained Bond Fund manager and market guru, Bill Gross, sounds scared of today's stock market. At the Bloomberg Invest New York summit on Wednesday, Gross said "If there’s a common factor it’s the expansion of credit. And the credit that’s being generated by central banks. Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced." … [Read more...]

Portfolio Strategy: Is This What is Driving the Asset Bubble?

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Here’ s an interesting chart from Bespoke Investments that may go a long way toward explaining the exuberance among some sectors of the stock market today (think FAANG type stocks). This shows the share of Millennials who say they are taking more or much more risk with their investment assets now compared to last year. The Millennials are of course too young to have any battle scars from the dotcom bust. They may not appreciate the damage that can be done in the investment markets when valuations reach pie-in-the sky levels. If the history of markets is any guide, it looks like … [Read more...]

Will Germany’s Auto Makers Be Pulled Apart by Activist Investors?

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Germany's equity market has traditionally been resistant to pressures from activist investors. But recently the country's big corporations are feeling some pressure to maximize stock prices. Some investors are suggesting that big German auto companies spin out their truck manufacturing businesses, which appear undervalued compared to pure-play competitors. Stephen Wilmot writes at The Wall Street Journal: It is the classic conglomerate problem: Daimler Trucks, which dominates U.S. highways with the Freightliner brand, is trapped within the Daimler automotive empire. The fearsome challenges … [Read more...]

Asset Allocation Advice from Jack Bogle

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Here Jack Bogle offers insight on asset allocation which can help you become a more successful investor Diversification is the cornerstone of a prudent investment program, but when you diversify, most often something in your portfolio is performing poorly when other assets you own are performing well. Many investors instinctively want to get rid of the under-performing assets and buy more of the assets that are going up. That would of course defeat the purpose of diversification. As Jack notes here, he is invested about 50% in stocks and 50% in bonds and half the time he worries why he has … [Read more...]

Trump Hotel Chain: American Idea is a Great One

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Donald Trump, Jr. speaking with supporters of his father, Donald Trump, at a campaign rally at the Sun Devil Fitness Center at Arizona State University in Tempe, Arizona. “American Idea” hotel chain? Sounds great to me. I was tuned into this story while scanning Drudge Report last night. "On the campaign trail, President Trump’s children rolled through dozens of small towns across the country, reveling in the adoration of the crowds. But they were less enamored of the budget-friendly hotels along the way, an assortment of run-of-the-mill offerings that were barely distinguishable from one … [Read more...]

Amazon’s Brick and Mortar Bookstore Still Driven by Data

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Amazon.com is opening brick and mortar bookstores known as Amazon Books, like a 4,000 square foot location at The Shops at Columbus Circle in New York City. The shops, despite being physical stores are still driven by Amazon's data on internet book sales. Tonya Garcia reports at Market Watch: Amazon Books will have about 20 associates and stock 3,000 books, all presented with their covers forward and accompanied by a placard featuring a customer review and a bar code that can be scanned using the Amazon AMZN, +0.43% app for pricing and additional information. Every book in stock will have … [Read more...]

Don’t Invest like a Herd Animal

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Investing in the consensus isn't always the right course of action. Beware when the financial press and the majority of analysts agree on something. It can be a sign that the opposite is true. This idea was fleshed out nicely in 2008 by Stephen McClellan in Full of Bull: Do What Wall Street Does, Not What It Says, To Make Money in the Market. Now you can see evidence of the phenomenon of herd investing again in the case of Europe.  The Financial Times reports that Europe's strong performance is a big surprise among investors and economists. Chris Giles and Claire Jones write: The consensus … [Read more...]

Could Self-Driving Trucks Save Lives?

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If you have watched the Disney/Marvel movie Logan, you may have noticed the self-driving freight trucks cruising the highways alongside Hugh Jackman's eponymous mutant character. That part of this near-future sci-fi depiction of America in 2029 may be just over the horizon. Kristen Lee of Jalopnik interviewed Nick Pugh, who designed the look of the trucks for the movie. She writes: The ensuing autonomous truck was just a container with two little robot bottom parts that had wheels with motors on them. They could link up and trail 20 containers at a time or just tow one. The scene with the … [Read more...]

June RAGE Gauge: Sell Your Winners

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Not much has changed in the last month. That’s the conclusion in reviewing the data points in June’s RAGE Gauge. As I mentioned in last month’s gauge, investors seem to be complacent and that feeling continues today. It never ceases to amaze me how quickly investors forget about the devastation markets can bring. They troll the internet for articles that support their points of view. And all is right in their world. Until it isn’t. This is the perfect time to imagine the market falling by 40% to see what that would feel like. How would your overall portfolio handle it? Have you done enough … [Read more...]

Mega-Trend: Millennials Associate Homeownership with the American Dream More So Than Generation X or Baby Boomers

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Alan Berger and Joel Kotkin, authors of Infinite Suburbia, recently had a good interview with the Hyperloop One blog on the resurgence of suburbia. I thought this was interesting: From 1980 to 2003 in the U.S., rural landmass conversion to urbanized areas was about the size of New York State. From 2003 to 2030 the conversion is estimated to be the size of Utah. That's a mega-trend. I think part of the problem with the initial conversion to suburbia was too little attention to quality of life. And to make improvements harder, suburbia had its haters—mostly academics and wealthy city … [Read more...]