James Mackintosh, writing in The Wall Street Journal, explains that as the term premium rises on bonds, hardest hit could be the so-called "acronym stocks," also known as the FAANGs. With rates on Treasuries rising, the discounted future profits of these tech giants look less attractive to investors. Mackintosh gives investors in the FAANGs three reasons to worry, writing: There are three reasons to worry. The first is that the acronym stocks— Facebook, Amazon, Apple, Google parent Alphabet, Netflix, Microsoft and others arranged into the FANGs, FAAMGs and so on—flew too high, and will now … [Read more...]
Archives for October 2018
American Workers Ecstatic as the Good News Piles Up
"The best job market in a generation or more." That's how Andrew Chamberlain, chief economist at Glassdoor, a recruiting site, describes the current environment. The American worker is ecstatic at the good news piling up. Wages are rising and jobs are plentiful. Eric Morath and Harriet Torry write in The Wall Street Journal: Unemployment in September hit the lowest level since the Vietnam War, with little indication it is going to shoot back up in the near term. The jobless rate fell to 3.7%, the lowest since December 1969, the Labor Department said Friday. Employers added 134,000 jobs to … [Read more...]
Is Your Broker a Used-Car Salesman?
Charles Schwab tells Financial Advisor IQ that many investors believe their brokers are used-car salesmen. He says brokers should keep their eye on the big ball, the millions of investors with 401(k)s who need help. He warns against reinforcing negative industry stereotypes and encourages advisors to act as fiduciaries for their clients. Rita Raagas De Ramos writes for Financial Advisor IQ: The “advice portion” of what the investing public needs worries Schwab, he says, referring to the quality of advice investors are getting – especially elderly and so-called mom and pop investors. “The … [Read more...]
Is Mercedes Getting its Own Giga-Factory?
In the heart of Bibb-County, Alabama, Mercedes-Benz is expanding its production facilities to include a battery factory. Mercedes' plan is to offer fully-electric versions of all its models by 2022, and the Alabama battery plant will be one of eight globally tasked with supplying the batteries for the effort. William Thornton reports at AL.com: Markus Schafer, member of the divisional board of Mercedes-Benz cars, production and supply chain, quoted the lyrics of "Sweet Home Alabama" today, as the German automaker broke ground on its latest addition to the company's growing Bibb County … [Read more...]
Here’s the Investing Advice I’d Give a Professional Athlete
This is the advice I gave professional athletes and my readers twelve years ago about how to make your retirement dollars last a lifetime. I wrote: I advise you regularly to invest only for dividends or interest. I want you to insist on getting paid, as I do. If you want to speculate with a portion of your capital, that's fine, but do not mess with your primary stash of cash. When you retire, your earning years are over. Kaput. You earn no more. Therefore, every dollar you have the day you retire must be treated with the deepest reverence. Treat each dollar as you would a family member. Would … [Read more...]
Rage Gage October: Interest Rates and Employment Up, Up, and Away
My early October readings are in, and clearly Americans are back to work thanks to the Trump Economic Revolution. And as interest rates rise, retired and soon to be retired investors can rejoice in the long-awaited Interest Rate Revolution. CNBC explained the good news for America's economy here: The number of Americans filing for unemployment benefits fell to a near 49-year low last week, pointing to sustained labor market strength, which should continue to underpin economic growth. The labor market, which is viewed as being near or at full employment, is steadily … [Read more...]
Trump Trade Deal with Neighbors to Bring Auto Manufacturing to North America
After the recently negotiated USMCA trade deal, foreign auto companies are considering bringing more of their parts manufacturing to North America. Chester Dawson and William Boston report in The Wall Street Journal: Foreign car makers are considering moving more manufacturing to North America from their overseas plants following the recent U.S. trade deal with Canada and Mexico. Within days of the U.S. and Canada reaching a pact to replace the roughly 25-year-old North American Free Trade Agreement, executives at several foreign car makers said they are considering changes to their supply … [Read more...]
Southern Migration
If you’re a politician the easiest way to grow “revenue” is to treat your successful residents with respect—respect for their money that is. And yet time and time again politicians do the exact opposite. Is it any wonder the most successful New Yorkers spend at least half the year in Florida? The Wall Street Journal editorial board chides Governor Andrew Cuomo for his tone deaf assessment of why people are fleeing the Empire State. They write: Andrew Cuomo is on a roll. After a deft rebuttal of President Trump last month—America “was never that great”—the New York Governor has now finessed an … [Read more...]
Is Zinc the New Lithium?
A promising zinc-based battery technology could revolutionize the economics of energy storage. Ivan Penn reports in The New York Times about the innovations of Patrick Soon-Shiong and Nant Energy. He writes: Over the past six years, 110 villages in Africa and Asia received their power from solar panels and batteries that use zinc and oxygen. The batteries are the basis of an innovative energy storage system created by NantEnergy, a company owned by Patrick Soon-Shiong, a biotech entrepreneur and surgeon originally from South Africa. Thomas Edison tried to develop batteries made with zinc … [Read more...]
Has the Internet Broken the Grocery Store Model for Good?
Most grocery stores are set up in more or less the same way. Aisles and aisles of refined carbohydrates stacked in the middle, surrounded by produce on one side, meat in the back, and dairy on the other. On the ends of each aisle are high calorie impulse purchases tempting shoppers who must pass by to get to the healthier options. Online sales may break this time-tested model. Online shoppers are less likely to want impulse foods because they have more time to consider their options and plan ahead. In response to online shopping behavior, at least one store chain, Smart & Final, is … [Read more...]
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