Securities markets endure any number of threats each day. Sometimes news that appears dire isn’t necessarily so. Other times, the market overlooks the little signals that portend a rout. After the 2005 revaluation of the yuan by China, I discussed how such seemingly small developments could create major change via the “butterfly effect.” I wrote that September: I’ve written over the years about Chaos Theory, a subject on which I have read extensively. Of the scads of neat books on Chaos Theory on my shelf, I would send you first to Chaos—Making a New Science by James Gleick (author of the … [Read more...]
Archives for July 2019
In Investing, Be Brave When Others Are Scared
When others are scared in investing, it pays to be brave. So says analysis from Jan Dehn anyway. His work examining bad news cycles and emerging market returns shows that buying when others are afraid of EM markets can increase returns by 10 percent a year. The FT's Steve Johnson reports: Number-crunching by Jan Dehn, head of research at Ashmore, the British investment manager, suggests the best time to buy EM assets is during media blitzes — all driven by bad news — while the worst is when the EM world is so tranquil it barely garners a column inch. Mr Dehn analysed mentions of “emerging … [Read more...]
“I wish that I could give you something… but I have nothing left” FIRE! (Part III)
As you read in my FIRE series parts I and II, the acronym stands for Financial Independence, Retire Early and is as much a mindset as it is a financial plan. Think about what you spend the most money on and you’ll quickly realize some of it can be reduced but a lot of it cannot when you’re in retirement. Chances are you’re out of debt. You’ve saved until it hurt and now you should be living the retirement you deserve. You’ve won the war. But there’s one thing I need to talk to you about. I talk to a lot of investors during any given week which provides me with a front row seat to … [Read more...]
Would You Buy this Bond?
Imagine a bond from a creditworthy country that pays you each year for 100 years. The only catch is, it only pays 1.2%. Would you buy it? In Bloomberg, Marcus Ashworth calls the idea of the 100 year bond at 1.2% "madness." He writes: If you needed any more proof that the world of fixed income has gone mad in the rabid hunt for yield, look no further than the Republic of Austria. If you liked its 100-year debt issued two years ago with a 2.1% return, how about settling for the same maturity for 1.2% now? Yes, you read that right: A 100-year bond yielding about 1.2%. Austria is in the … [Read more...]
Is Africa Ready for Uber?
Uber executive Brooks Entwistle tells Reuters that Africa is a target for potential expansion for Uber. The continent's low personal car ownership and population growth are tailwinds for a service such as Uber. Alexis Akwagyiram reports for Reuters: In much of sub-Saharan Africa there are low levels of personal car ownership, rapidly expanding populations and a lack of efficient mass transport systems in fast-growing cities. Uber, which said it has 36,000 active drivers in sub-Saharan Africa, operates in a number of countries in East and South Africa but is largely absent from West Africa, … [Read more...]
“Dad, You’re Stressing Me Out” FIRE! (Part II)
Living a lifestyle where you spend 50% less than your “normal” spending doesn’t sound like much fun. But that’s exactly what many members of the FIRE movement are doing. FIRE standing for Financial Independence, Retire Early. I’ve been studying this movement big-time, because there’s a lot for you and me to learn by understanding what others are doing. This is not some hypothetical model of how you’ll live your life off your investments. This is real. It’s a lifestyle. When I brought up living a FIRE-centered life to my daughter she said, “Dad please stop with the FIRE, you’re stressing me … [Read more...]
Is the Presidential Campaign a Threat to Market Security?
Recently on the campaign trail, Sen. Bernie Sanders, who is running in the Democratic Presidential primary, explained his plan to pay off American students' college debt by putting a tax on securities transactions. According to Felice Maranz at Bloomberg, Sanders' plan includes "a 0.5% tax on stock transactions, a 0.1% tax on bond trades and a .005% tax on derivatives transactions." Maranz continues, noting that shares of online brokers like TD Ameritrade and E*Trade fell in value after Sanders' comments, writing: The financial transaction tax (FTT) “boogeyman” appearing on the campaign … [Read more...]
It’s Getting Harder for a Family to Buy a Home
According to the U.S. Home Affordability Report from ATTOM Data, median selling prices for homes were more than most middle income families could afford. That means, that house prices are outpacing wage increases in America. Bloomberg's Alexandre Tanzi reports: The U.S. Home Affordability Report, released Wednesday by ATTOM Data Solutions, found that median selling prices were too high for average wage earners in three-fourths of the nation’s real estate markets during the second quarter of 2019. At the same time, affordability in four of five markets is starting to improve compared with … [Read more...]
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