Sad! Once America’s most venerable industrial company, GE has announced plans to shrink itself to a fraction of its former self. GE is going to spin off its health-care business and exit the oil services business that former CEO Jeff Immelt entered near the top of the market. The new GE will be focused on power, aviation, and renewable energy. A leaner and more focused company will result. The breakup of GE could have been done years ago from a position of strength, but former leadership dithered, and doubled down on a conglomerate strategy that is now unraveling. GE is now splitting up … [Read more...]
Archives for June 2018
Can Kroger Make Americans Buy Their Groceries more like Europeans?
Kroger is America's number one grocer. In the current market, companies like Wal-Mart and Amazon.com are fighting to take share away from Kroger, especially in the rapidly developing online grocery market. Kroger is fighting back by purchasing Ocado, a British online supermarket. In the U.K. 6% of food sales are online. If Kroger can increase Americans' share of grocery sales online from 2% to 6%, it will be a major victory. According to The WSJ's Logistics Report: Supply Chain Strategies The grocery-delivery business has a new market leader, and the surprise is that it’s not Amazon or … [Read more...]
SEC to Discuss Long-Awaited ETF Rule Fix
For years companies have been asking for the SEC to fix broken ETF rules, and now the commission may finally be approaching a solution. Rachel Evans reports at Bloomberg: On June 28, the SEC will discuss whether to propose regulations that would allow asset managers to sell certain types of exchange-traded funds without first gaining its approval, according to the commission’s agenda. Under current rules, wannabe ETF issuers must get SEC permission -- a process known as exemptive relief -- before selling funds under the Investment Company Act of 1940. It’s wonky stuff, but the … [Read more...]
Are Markets About to be Disciplined?
In an interview with the Financial Times, Agustin Carstens of the BIS, said that investors have become a disciplining force that will leave markets, specifically those with debt-laden government with little room to grow. Claire Jones writes: The “disciplining force” of financial markets will leave debt-laden governments with limited room to boost growth as central banks ditch their crisis-era stimulus, the head of the Bank for International Settlements has warned. Agustín Carstens, general manager of the central bankers’ bank, told the Financial Times: “Some markets are overstretched and … [Read more...]
If You Have a Minute, I’ll Show You How to Experience Newport like the Rich and Famous
“E.J., we’re going to be in town for the Newport Flower Show, are you available to meet?” asked Anne, a client of mine. “Of course, I am,” I replied. And just like that a wonderful weekend was booked. Lucky them. What are you waiting for? You have plenty of reasons to come to Newport. Not only is today the beginning of the world renown Newport Flower Show, but, most kids in Newport are still in school. No beach crowd traffic to deal with, yet. And I mean yet. Which is why late June, the Flower Show, and perhaps you, go hand in hand with your perfectly timed mini-vacation. If you want … [Read more...]
Are the Pieces Finally in Place for a Bear Market?
The FT reports here that bearish investors may have finally capitulated. Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. John Templeton said that. A lack of bears is a necessary precondition for a bull market, but it should not be viewed as a catalyst for a bear. Media commentary, which invariably reflects the opinions of influential market participants, appears to be becoming steadily less bearish the further we move away from the last crisis. My colleagues on FT Alphaville have pointed out that the number of articles mentioning the term … [Read more...]
My 1% Miracle: How to Avoid Outliving Your Money
Back in 1991 I addressed the most terrifying aspect of saving for retirement that any investor can face, the prospect of outliving your money. I cannot impress upon you enough the importance of saving more than you think you’ll need. Those of you who have been diligently saving and intelligently diversifying your portfolio through the last nine years of historically low interest rates are surely wondering if your savings will hold up after you retire. Ultra-low interest rates from the Fed have been a direct assault on retirees and savers. But now rates are rising, and you have the … [Read more...]
A Category 5 Strike Devastates Your Portfolio
Take note of this post I wrote in September of 2017, it's as true now as it was then. What if you and your family are not completely prepared, well in advance, to put a force-field around your life’s resources? That’s the reality we live in today. No matter if we live in a connected world with information at our fingertips or in a desolate fishing cabin in Alaska: disasters happen. You need to be prepared. Because you’re never, ever, fully prepared for what can come your way. You just hope you’re in the best position possible for if, and when, it does. From a portfolio perspective, … [Read more...]
Growing-Up in Mattapoisett/Rochester/Marion: Going on Survival, Part III
You learn a lot about life and investing by simply putting one foot in front of the other. Today is day five of my nephew’s outward-bound excursion called “Survival.” It’s a legendary trip for seventh graders at Old Rochester Junior High School, in southeastern Massachusetts, from the towns of Mattapoisett, Rochester, and Marion. It’s a wet, sticky morning here in Newport, RI. At this point on the trip my nephew and his classmates will either already have accomplished the required two-days of survival or they will be waking up for day two of it. If it’s day two, hopefully they … [Read more...]
Landmark E-Commerce Decision by the Supreme Court
Today the Supreme Court has decided states are allowed to collect taxes from online retailers. Ten states already have laws requiring out of state sellers to notify buyers of taxes owed and to inform states of unpaid sales taxes. Retailers opposed the laws on the grounds that they had no presence in the states where taxes were being levied. In a 1992 decision, the Supreme Court ruled that companies with no physical presence in a state didn't need to collect that state's sales taxes. But now that online sales account for 10% of shopping, the old rule doesn't work anymore. The change in … [Read more...]
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