This week Krista Gmelich and Sarah Frier reported for Bloomberg that Facebook "said a software bug gave outside developers broader access to the photos of millions of users, another privacy misstep by the world’s largest social network." The question is, how can a company that makes its money by selling access to its users' data remain profitable if rising calls for accountability over privacy force it to alter its business model? Is there a path forward for Facebook? The reporters continue: As many as 6.8 million users and up to 1,500 apps were involved, according to a blog the company … [Read more...]
Archives for December 2018
Can You Afford a 50% Loss?
Can You Afford a 50% Loss? That’s the question I asked readers in March 2014. I wrote: Can You Afford a 50% Loss? It’s impossible to have it all ways. In order to craft an investment portfolio that can act as an all-weather armadillo, you must be willing to forgo potentially substantial upside rewards to balance against the horror of a downside wipeout. If you are retired or saving for retirement in the not-too-distant future, you can easily get a knot in your stomach when you look at the basic math of downside portfolio protection. By example, when you lose 50% on an investment, you must … [Read more...]
Fidelity is Boston and Boston is Fidelity
When you’re an intern at a start-up, you have certain responsibilities. For me, it was to go pick-up lunch when the founders ordered out. But what was cool about being the intern was that I had a seat at the table. I was privy to all their war stories. It was fun (for them) to talk about how hard it was when they were my age—broke, jobless and about to graduate from college. As they looked back it was the road not the destination. Easy for them to say. One of the stories I liked best was when the CEO would talk about how he decided to work in Boston. He said, “I knew it was going to be hard … [Read more...]
Apple’s Biggest Failure Today
Apple is failing dismally in the world’s most important growth market for smart phones. India is the largest untapped market for smart phones in the world. There are 1.3 billion consumers in India and only 24% of them own an iPhone. There is lots of potential for smartphone makers in India. So how is Apple doing in this must-win market? Apple’s market share in India is a whopping 1%. And to add salt to the wound, that number is down about 50% over the last year. What is Apple doing wrong? Price is a major problem. After Apple’s latest price hike, its base iPhone Xs is offered at … [Read more...]
Vanguard GNMA and a Winter of Political Polarization
Anyone who tells you politics has nothing to do with investing is simply not paying attention. In this winter of political polarization—a deep freeze—politics matter. Case in point. Look at Vanguard GNMA. For most of 2018, Vanguard GNMA has been sledding from a peak of $10.45 in January. Guess when the trough, or bottom was hit? November 6th the day of the midterm elections. Since then, as you’ve witnessed, stocks have been twitching like a desperate squirrel working through that last nut for the winter. Not Vanguard GNMA. It has been steady, up close to two-percent, closing at … [Read more...]
Will Amazon Finally Cut the CRaP Products?
For years Amazon has operated its retail business with little or no profit. A big reason for that has been what Amazon insiders refer to as CRaP products. The acronym stands for "can't realize a profit." Now Amazon may attempt to trim some of those products form its sales. Laura Stevens, Sharon Terlep and Annie Gasparro write for The Wall Street Journal: Now, as Amazon focuses more on its bottom line in addition to its rapid growth, it is increasingly taking aim at CRaP products, according to major brand executives and people familiar with the company’s thinking. In recent months, it has been … [Read more...]
Are You Safe from the Biggest December U.S. Stock Drop Since 1931?
In 2018, U.S. stocks have lost more value in the month of December than during any other December since 1931. With the Federal Reserve now slowly raising rates, risky bets are being reevaluated, and market volatility has returned. Reuters reports: ...the benchmark S&P 500 index began the trading session almost 8 percent lower for December. “We’re facing the biggest December fall in U.S. stocks since 1931 and this is striking and worrying at the same time,” said Chris Bailey, European strategist at international financial services firm Raymond James. “We are at a regime shift moment and … [Read more...]
Xi Fails to Move China forward in Speech
At a speech honoring the 40th anniversary of Deng Xiaoping's economic reforms in China, President Xi Jinping was given the opportunity to build on that legacy by announcing new steps forward for China. He failed to deliver, as reported here by Gabriel Wildau of the Financial Times: “To promote reform and development in China — a large country with a more than 5,000-year history of civilisation and more than 1.3bn people — there is no textbook that can be regarded as a golden rule, and there is no great master who can dictate to the Chinese people,” Mr Xi told party leaders at the Great Hall … [Read more...]
Babson College Announces New President
"Babson College, which marks its centennial next year, has tapped a familiar face to replace Kerry Healey, its outgoing president and the first woman to lead the Wellesley business school," reports the Boston Globe. "Stephen Spinelli Jr., a cofounder of Jiffy Lube International, Inc. who worked at Babson from 1993 to 2007, will become the college’s 14th president in July, the school said Friday." Laura Crimaldi writes: Spinelli, 63, is returning to the school after spending 11 years in Pennsylvania, where he served as president of Philadelphia University and negotiated the school’s merger … [Read more...]
Tax Cuts are About to Get A Lot More Popular
Here come the tax refunds. Many Americans haven't really seen what the Trump tax reform is going to do for their returns. With big checks possibly coming back to many families, the retail sector could be buoyed for longer than anticipated. Bloomberg's Matthew Townsend reports: Polling shows that many Americans don’t like the landmark tax overhaul passed a year ago, but maybe that’s because they haven’t received a bulk of the benefits yet. The law cut tax rates for some individuals, but lots of Americans haven’t seen all those savings flow through to their paychecks, according to Wells … [Read more...]