When arriving in France and immediately driving away from Charles de Gaulle airport, it’s hard to miss all the warehouses/distribution facilities on your way to Paris. I found this article interesting as companies battle for logistics superiority by building in more affordable Eastern and Central Europe. The WSJ’s Isobel Lee explains: The industrial real-estate market is booming in Central and Eastern Europe, thanks to the region’s geography and cheap labor along with the benefits of Europe’s unified currency and lack of trade restrictions. Developers are adding new warehouses and … [Read more...]
Archives for June 2018
The Case Against Education
The Case Against Education: Why the Education System is a Waste of Time and Money written by economist Bryan Caplan points to the billions of dollars spent on education by government. It seems like everyone needs a diploma these days. For what? An excuse to drink beer? But, as Caplan explains, that degree is valued by employers. Without a degree, whether you learned anything or not, you automatically are branded or placed in a separate, lower paying, jobs pool. Who are the big winners in this game? Tenured professors like Caplan. Stossel: The College Scam Originally posted on … [Read more...]
Sentiment on Junk Bonds Nearing Mania Threshold
Only two times before has the ratio of junk bond yields to high-grade bond yields been lower than it is now. Those two instances preceded the Asian market crisis, and the global financial crisis. Bloomberg's Sid Verma and Cecile Gutscher report: According to a key valuation metric, investors are headed for the kind of bullishness on high-yield bonds that’s been seen just twice before: during the halcyon days of 1997’s tech bubble before the Asia crash, and on the eve of the global financial crisis a decade later. The ratio between U.S. junk-bond yields and their high-grade counterparts has … [Read more...]
Voter Migration and What it Means to Your Family
Who needs to redraw state lines when states can be gutted from the inside out? That’s exactly what’s happening across the country to blue states that have abused their power of taxation for far too long. As the story goes, it’s true that demographics favor Democrats but dig a little deeper and you see that it’s geography that favors Republicans. Look at the mass exodus from blue states such as California and the migration into states such as Texas, Arizona, and Tennessee or East-Cali as I like to call them. Or the blue states of New England and New York that consider Florida and the … [Read more...]
Is Netflix a Bubble?
Great piece by Tara Lachapelle at Bloomberg on Netflix vs. Disney. Netflix market value has now surpassed Disney’s market value. Yup, as Lachapelle puts it, An 11-year-old app that charges $11 a month is worth more to investors than the legacy conglomerates that earn billions more from TV advertising, box-office hits and cable and internet packages. The Bloomberg article goes on to point out the conundrum in today’s market. This is a broader trend that isn’t just limited to Netflix. You see it with Amazon and its competitors. Firms that try to engage in the profit sucking, market-share … [Read more...]
Canadian GDP Disappoints. What Does it Mean?
Canada reported first quarter GDP numbers last week and the country's production didn't increase as fast as economists had predicted they would. Dragging on the numbers was lower housing investment, a result of tighter regulation of mortgages in the Great White North. Kim Mackrael reports for The Wall Street Journal: Canada’s economy expanded at a slower pace than expected in the first quarter, as housing investment dropped sharply following the introduction of tougher mortgage rules. Weaker consumer spending and lower exports of non-energy products also weighed on growth. Canada’s … [Read more...]
Do You Invest Like the Tortoise or the Hare?
You know how this story ends, but the truth is both approaches can work over the long-run, so long as you have the patience and tenacity to stay the course. In the chart below, we compare the 30-year performance of Young Research’s Cyclical and Defensive Indices. Think of these as proxies for the tortoise and hare approach to investing. The Young Research Cyclical Portfolio is a modified market capitalization weighted index of the technology, industrial, energy, materials, financial and consumer discretionary sectors. These are the sectors that tend to fluctuate most with the business … [Read more...]
If You Need More Reasons to Like GNMA, Read This
When times are tough Vanguard GNMA, managed by Wellington Management, has been an absolute force for retired and soon-to-be retired investors. Pay attention here. We’ve already had two substantial cracks in the market so far this century. Originally posted on Yoursurvivalguy.com. … [Read more...]
Does Your Portfolio Pass My Three Step Test for Balance?
Back in 1993 I explained my three-step test for balancing your investment portfolio between bonds and stocks. At the time I was recommending Treasuries, but you can use this advice no matter what kind of bonds you’re buying. Use your age and my three-step test as a starting point for how you plan to allocate your portfolio. I wrote: I want you to keep your investment portfolio well balanced. But just how much of your portfolio should be invested in equities and how much should be in Treasuries? Here’s a basic strategy that is based on your age. The percentage of your portfolio that is in … [Read more...]
The Cool Kids are Not on Facebook
Not so long ago many 12 year-olds anticipated their thirteenth birthday not only for the celebration, but for their new ability to join the world's largest social network, Facebook. It was a rite of passage. Now it seems, kids aren't as interested in joining Facebook. Instead they prefer Instagram, Snapchat and most of all YouTube. A Pew Research poll found that the share of teens who say they use Facebook has fallen to 51%, with only 10% saying they use the platform regularly. In contrast, 85% use YouTube, with 72% and 69% using Instagram and Snapchat respectively. The report is more … [Read more...]
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