Apple shares were clubbed again yesterday after the company lowered revenue guidance for the upcoming quarter. The stock lost 10% yesterday—the biggest single day drop in six years. The shares are down 38% from their high last year, translating into a $450 billion loss in market value. Apple pointed the finger at China, but there is more to the story than the weakening of Asia’s biggest economy. A saturated smartphone market, missteps in select emerging markets, and a major mistake on pricing are all parts of Apple's problem. We have long harbored doubts about Apple’s ability to sustain … [Read more...]
Archives for January 2019
“Trees Don’t Grow to the Sky and I see Clouds…”
In Springsteen on Broadway now showing on Netflix, Bruce Springsteen talks fondly of a big copper beech tree in front of his childhood home that was a symbol of times when he was able to escape life for a little while and be with his army men and play. Years later when writing his book, he jumps in his car and goes back to where he grew up and that big ‘ole tree was gone. It’s a powerful segment in his wonderful performance. One that’s still with me and one I think you will love too. Trees don’t grow to the sky. And sometimes they’re cut down. But in the case of Springsteen, the soul … [Read more...]
Remember This to Survive 2019 Market Turmoil
The new year is here, and America’s stock markets are weathering some turmoil after ending 2018 mired in volatility. There are some concerns about the future earnings potential of companies currently making up big parts of the major stock indexes. Apple’s current trouble is just the most recent example. Back in September of 2012, I reminded readers of one simple fact that can help them through hard times in the markets. I wrote “In the majority of cases, the price of common stocks has been influenced more markedly by the dividend rate than by the reported earnings.” I … [Read more...]
Will China’s Downturn Take Apple with It?
Weak performance in China has forced Apple to lower its quarterly revenue guidance for the first time in 15 years. Pricing pressures from competitors like Huawei, and broader economic problems in China could be to blame. I've noted before that Apple's pricing has cost the company heavily in India, and the same issues could be at the heart of its problems in China. Earlier this year there was some warning for investors that Apple was having trouble selling its phones when the company inexplicably ceased reporting unit sales of its products. On the latest troubles for Apple in China, Robert … [Read more...]
2019: Promise Me You’ll Do this One Thing
Get 2019 off on the right foot and bring some peace of mind to your portfolio. One way to help clear your mind is to get out of the prediction business. Lot’s of words are wasted this time of year with articles predicting the future. Don’t let them mess up your voyage. I want you to imagine that you’re in the midst of a months long Atlantic crossing. Your job is to trim the sails and hold your course, and yes watch the weather. But now is not the time to re-outfit your ship simply because it's January. It's an emotional time of year. Don't let it get the best of you. Take a deep … [Read more...]
A 2019 Survival Guy Investment Strategy
Last year Vanguard GNMA made just under one percent or 0.87% for 2018 as interest payments offset a decline in bond prices from rising interest rates. As I’ve written to you before, you don’t want to be in the interest rate prediction business. You simply want to collect your interest payments and let the chips fall as they may. When you near retirement your success as an investor depends on a nine to five mentality—work nine to five to steadily save money for retirement and invest to keep what you’ve saved. It’s that simple. A survival guy investment strategy helps you to win the war … [Read more...]
Is Chinese Manufacturing Hurting from the Trade-War?
A closely followed measure Chinese manufacturing industry's health has signaled its first contraction since mid-2017. The news sent stocks in Asia and Europe tumbling, along with American futures prices. Bloomberg's Jana Randow reports on trade tensions and manufacturing around the world, writing: Growth in the world’s largest economies is set to slow this year. Ongoing trade tensions between the U.S. and China are hurting demand across Asia’s manufacturing hubs and export-oriented European economies including Germany. Political uncertainty is weighing on confidence, while the U.S. government … [Read more...]
Tesla Slashes Prices after Missing on Deliveries
Tesla has been forced to cut prices on its Model 3 sedans after missing missing expected deliveries on the vehicles. The price cuts also target an expected loss of demand from the end of federal tax credits for Tesla in 2019. The Wall Street Journal's Tim Higgins reports: Chief Executive Elon Musk had promised to increase sales and production of the Model 3 in the fourth quarter from the third quarter. He spent the final weeks of the quarter urging buyers to take advantage of the $7,500 federal tax credit that phases out for the company this year. Deliveries of the Model 3 in the fourth … [Read more...]
Happy New Year!
Start 2019 by reviewing some of our most popular posts of the last year: Crisis at Vanguard: Part II Your Retirement Life: How Do You Know Where to Live in Retirement? Will You be Ready When the Stock Market Crashes? "E.J., What’s Going on with Vanguard GNMA?" Vanguard GNMA and Your Retirement Years Vanguard Founder Jack Bogle Sounds the Alarm on Index Funds The 6 Basic Investing Principles That Will Make You a Winner Dynamic Maximizers®: an Update … [Read more...]
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