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Archives for October 2018

Calper’s OPM

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Turns out, members of California’s public pension don’t like it when the C-suite are activists with other people’s money. The workers expressed their dissatisfaction with pension-fund-activism by firing CEO Priya Mathur and replacing her with Jason Perez. New CEO Perez's main point of criticism against Mathur's approach was her focus on "environmental, social and governance investing," which is a euphemism for using the pension fund's money to play politics. Perez ran on a platform of refocusing the pension fund on "the agency’s fiduciary duty to maximize investor returns." Sound … [Read more...]

The Ethical Minefield of Structured Settlements

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Accidents leading to exorbitant medical bills are unfortunately a part of the reality many Americans face each day. Often medical bills from those accidents end up paid for with negotiated annuities called structured settlements. This is a reasonable arrangement for many victims, but there is occasionally some nefarious behavior attached to the business. Some of the planners who create the structured settlements are offered incentives to steer victims into the products sold by particular insurance companies. These kickbacks could influence planners to recommend plans that aren't in the best … [Read more...]

Getting on the Map with Gold

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I have been a longtime supporter of including gold in diversified portfolios. Gold is a safe-haven asset, an inflation and currency hedge, and a hedge against geopolitical turmoil and general market turbulence.  It is an insurance policy of sorts. When everything else is down, gold is often up. Gold’s counterbalancing effects can dull the pain of a market rout. We have seen shades of gold’s counterbalancing power over recent weeks as both stocks and bonds have sold-off while gold prices have risen. I’ve long been an outspoken advocate of owning gold (I say owning because I buy gold … [Read more...]

Don’t Stop Believing

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Imagine sitting on the board of your favorite company, attending the next meeting, clearing your throat, and asking “How much are we going to increase the dividend this quarter?” Welcome to the company! Because that’s what it’s like to be an investor in a stock that cherishes its shareholders, its owners if you will, showing appreciation through regular dividends and dividend increases. It’s nice to be appreciated, especially when stocks are a little shaky. Getting paid to be in them helps. A lot. Which is why dividends are so important to every investor no matter their age or net … [Read more...]

Can China Restore Confidence in the Heat of a Trade War?

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China's economy is slowing down, with GDP growth at 6.5% in third quarter. That's the lowest rate since 2009. The question for Chinese policy makers is whether or not they can restore market confidence in the face of a trade war with the United States. Lingling Wei reports in The Wall Street Journal: Restoring market confidence is proving to be one of the toughest economic challenges for China’s leadership. Soon after the financial mandarins’ remarks were released, the official Xinhua News Agency published an interview with Vice Premier Liu He, President Xi Jinping’s economic captain, in … [Read more...]

Librarian Leaves $4 Million to UNH

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If you want some inspiration for your savings, read this post I wrote back on September 2, 2016. It tells the story of Robert Morin and the power of saving.  "Robert Morin worked nearly 50 years at the University of New Hampshire library and never seemed to spend any money,” writes Brian MacQuarrie of the Boston Globe. He ate fritos and coke for breakfast, a cheese sandwich for lunch and frozen dinners for dinner. I’m not saying this is the life for you. But I do think it’s pretty amazing how being frugal can impact one’s finances. At the core of Mr. Morin’s financial success is the fact … [Read more...]

U.S. is #1: World’s Most Competitive Economy

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For the first time in a decade the U.S. is the world’s most competitive economy. That according to the World Economic Forum rankings. Thank you President Trump. And the good news is, there’s room for improvement. I can tell you from my conversations with investors that Trump has brought a new level of energy, an energy that was missing in the Obama years. And, finally, the misguided zero percent interest rate policy—a brutal time for savers as their life savings earned nothing as it was given away for free to Wall Street—may be behind us. Which leads me to believe that this is a … [Read more...]

A Story of Retail Dominance Ends

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Sears filed for bankruptcy this week. NBC News provides a timeline of Sears' storied history. Sears was the Amazon of its day, creating businesses in many different industries and disrupting the dominant retailing model of the time. Here's how Sears got its start: 1886 — Richard Sears begins selling watches at a railroad station At age 22, Sears, who was working as a railroad station agent in North Redwood, Minnesota, began selling watches to fellow agents as a way to supplement his income. 1886 — Mail order business, the Amazon of its time Within six months, Sears’ watch business … [Read more...]

Get Rich Slow with This Strategy

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Most “get rich quick” schemes end up turning into “get poor quick” schemes. Reach too deep into the risk pool and you’re likely to fall in. I knew that 30 years ago, and in 1988 I wrote: I’m an ultra-conservative investor at heart…and by intent. I know my reputation in the industry puts me in the most cautious camp possible, and that’s just swell with me. My motto has always been, “Get rich slowly with compound interest.” At even a 7% rate of return, money doubles in about ten years. In IRA, Keogh and other retirement accounts, over half of total return should come from dividends and … [Read more...]

The Four Stocks Propping up Global Equity Markets

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You wouldn’t know it if you rely on CNBC for your financial news, but outside of a select group of U.S. growth stocks, global equity markets are down YTD. The MSCI All-Country World Index is down 2.4% for the year, while the same index excluding U.S. stocks is down 9.34%. Emerging equity markets have already dipped into bear market territory (down 20% from high), and developed equity markets outside of the U.S. are not far behind, falling 15% from their January peak. Two thirds of the 3,000+ stocks in the FTSE All World Index (similar to the MSCI All Country Index) are down … [Read more...]