In July 2011 I wrote: On page 480 of 1962’s Security Analysis by Graham, Dodd, and Cottle, I underlined the above header. Since that time, I must have worn out a thousand red pens underlining books, but rarely are they investment books. I have never required another book on investing. I have since read a handful of other books on investing that I have found somewhat useful, but it has been a couple of decades since the last one. And I have no need to add to the list. Successful investing is to me more an art than a science. And intuition plays a big part. Since I graduated from Babson College … [Read more...]
Archives for November 2018
Going to WAR with Your Stock Portfolio
You can stack the odds in your favor. At its root, buying above average yields means the “market” or index yields less. Your task is to root out the higher yields, a contrary stance, and pick the winners from there. Your work has just begun. Because relying simply on the highest dividend yields is a fool’s errand. If the top dividend payers were always the top performers then investing would be easy. You and I know that’s false. What Dick Young has taught you, and tens of thousands of investors like you, is that a large part of investing involves art, not science. In baseball, there’s … [Read more...]
The Digital Currency Trojan Horse
The IMF is urging central banks to seriously consider digitizing their currencies. There are a number of stated reasons why governments would consider digitizing their money, but the real reason is less obvious. When money is digitized, citizens have no option to cash out their currency. If it all sits on a bank's balance sheet in digital form, governments can easily implement negative interest rates, forcing consumers to spend their money, or risk losing it. Today, depositors have a check on bank and government power over their assets because they can always withdraw their money in hard … [Read more...]
Oil Market Turbulence
Oil's recent big price drops are some of the largest ever. Stephanie Yang and Christopher Alessi report: Oil prices notched their longest losing streak on record Monday, as comments from President Trump negated expectations that the global oil cartel and its allies will cut production. Light, sweet crude for December delivery fell 0.4% to $59.93 a barrel on the New York Mercantile Exchange, marking the 11th consecutive session of losses, the longest in data going back to 1983. Brent crude, the global benchmark, also closed lower, down 0.1% to $70.12 a barrel. Read more here. … [Read more...]
Cryptocosm and Life After Google Part III
You instinctively know something evil is going on when a company’s motto is “Don’t be Evil.” As we learned in parts I and II when Google offers you “free” services (Gmail for example)—you’re the product. Will Google be able to compete against a cryptocosm several orders of magnitude larger than it could ever become? At the heart of the matter is big data. Googlers feel big data has all the answers—but big data is no match for human touch and emotional intelligence. Would you trust software to drive your family today? At the heart of self-driving cars is a battle of software (Google) vs. … [Read more...]
Private Equity’s Secret Sauce May Surprise You
In recent years pension funds have paid more and more in fees to private equity funds, but it turns out that the returns generated by the funds don't seem to justify the high cost. Bloomberg's Stephen Gandel reports: The returns provide little justification for that. New York City said in its report that its private equity portfolio since inception in the late 1990s had returned about 3 percentage points less a year — 10.3 percent compared with 13.1 percent — than if that money had been invested in public markets. Private equity firms, which often show returns that exceed public markets, say … [Read more...]
The Fourth Industrial Revolution?
Klaus Schwab, founder of the World Economic Forum, is calling the future economy, "powered by the mobile internet, automation and artificial intelligence," the fourth industrial revolution. After revolutions driven by coal and steam, electricity and the automobile, and computing, Schwab sees these new technologies pushing the world forward to new heights. The Wall Street Journal's Christopher Mims writes: Each of these earlier revolutions is easy to measure in hindsight—tons of steel produced, number of automobiles on the road, the proportion of homes with a PC. Since we’re just at the … [Read more...]
Cryptocosm and Life After Google Part II
What we learned in Part I is there will be Life After Google as explained in futurist George Gilder’s book by the same name. Because when we use Google’s products for free, you and I give them a free pass to do what they will with our data. Who are we to complain if Google mishandles security of our data? “You fools it was free,” they counter. But what if there’s a universe, a cryptocosm, that provides search on a much larger scale where we own our data through a blockchain? Imagine musicians, artists, and other creators whose work has been essentially stolen by the “everything is free” … [Read more...]
Did Apple Raise Prices too Much?
Lumentum, an Apple supplier, told investors it is cutting its outlook for the second quarter, possibly signalling that Apple's business is taking a hit. Tech investors reacted by pushing Lumentum's stock price down 30%, and Apple's down 4.1%. Is it possible that Apple has raised prices too high for its products, thereby decreasing demand? Ryan Vlastelica reports for Bloomberg: The latest warning sign was Lumentum Holdings Inc. cutting its second-quarter outlook after one of its largest customers asked to “meaningfully reduce shipments” for previously placed orders. Lumentum didn’t name the … [Read more...]