Back in 1991, I had already been through multiple business cycles in my investing career. I wanted to teach investors how to avoid my biggest failure in investing up to that point. Here’s what I wrote: Reduce Risk with Betas Not only do I want to help you achieve an “A” in total-return performance, I want you to achieve this return with as little risk as possible. In the stock market, the words risk and volatility are synonymous. I want you to concentrate most of your efforts on stocks that are less volatile than average. What you need to know is a stock’s beta, or the measure of its … [Read more...]
Archives for January 2020
Alaskan Native Sees Right Through Goldman Sachs’ Righteous PR Stunt
In The Wall Street Journal, Mayor Harry Brower Jr., an Alaskan Native, calls out Goldman Sachs for the firm's recent PR announcement that it will no longer finance new oil projects in the Arctic. Brower pierces right through Goldman's argument that it is helping indigenous peoples with "stakeholder engagement." Brower is the mayor of the North Slope borough, a massive land area populated by many Alaskan natives, including Mr. Brower. Goldman, like BlackRock, is virtue signaling to its favored constituency, wealthy investors living in the elite enclaves of New York and San Francisco. Neither … [Read more...]
Can Luxury Brands Survive the Wuhan Coronavirus?
The Financial Times reports that luxury brands could be facing trouble from the Wuhan coronavirus, as Chinese customers have become such a big part of the luxury industry. The FT writes: A queue of roughly 30 people, many of whom were speaking Chinese, queued at the Louis Vuitton, Chanel and Gucci stands in the Galeries Lafayette department store in Paris on Monday, writes Leila Abboud. Across the street at Galeries Lafayette’s centre for Asian tourist groups, crowds of people were waiting to get tax refunds on their purchases. The scenes in the French capital reflect how critical Chinese … [Read more...]
Is the Stock Market Run Set to Continue? And Should You Care?
The stock market has been on a tear since the Fed announced it would start what has been labeled non-QE QE (quantitative easing) in October. The S&P 500 is up 15% since then. The more speculative Nasdaq is up more than 20% and the FANG+ Index (a new index comprised only of the hottest tech stocks) is up 35%. Envious of the returns in the S&P or Nasdaq? Don’t be. You can’t call yourself an investor today and expect to keep up with either index. Even the S&P has now become way too speculative for investors in or nearing retirement. To keep up with the S&P today you … [Read more...]
Don’t Let Your Retirement Dream Community Become a Nightmare
When it comes to your living situation in retirement, there are developments (literally) that may turn your idyllic retirement community into an “anywhere in the USA” suburb. As liberal states like California, crush the middle-class, neighboring states such as Idaho, and towns west of Boise like Star, pick up the slack, explains Dan Frosch in the WSJ: Over the past nine years, Star’s population has doubled to more than 10,000. Most of the growth has come from people like the Turnipseeds who uprooted from the West Coast to the greater Boise area—known as the Treasure Valley—drawn by the … [Read more...]
Cutting Carbon Emissions Won’t Stop Forest Fires
This week, BlackRock CEO Larry Fink told investors that his company, the world's largest asset manager, will make "sustainability"--corporate code for climate change reactionism--the "new standard for investing." Holman W. Jenkins explains in The Wall Street Journal that the climate change hysteria surrounding weather phenomenon like the Australian and Californian forest fires is misplaced. He writes: What about Australia’s and California’s wildfires? Some won’t want to hear it, but climate policy is not a solution for the problems of forest management, especially the need for controlled … [Read more...]
Target Aiming to Crack Top 10 E-Commerce Sellers with Tech
Target is using a completely rebuilt tech department to transform its e-commerce sales. At current growth rates, Target will become one of the top 10 retail e-commerce companies by next year. Sara Castellanos reports for The Wall Street Journal: To be sure, Target’s financial performance isn’t solely tied to its technology efforts. The company has refurbished stores over the past few years and it has debuted new brands that are attracting customers, said Neil Saunders, a managing director with GlobalData PLC. “The most important thing is to have products people want to buy,” Mr. Saunders … [Read more...]
You May Not Be Able to Trust the World’s Largest Asset Manager
Be careful who you let run your money because they might have their best interests in mind, not yours. Despite his fiduciary duty to clients, Larry Fink, CEO of BlackRock, is focusing the company's efforts on achieving his own social goals, rather than on profits for investors. The Wall Street Journal reports: BlackRock is a fiduciary and as such is legally obligated to act in its clients’ best interest. This is ostensibly why BlackRock has voted against more than 80% of the climate resolutions on proxy ballots by activist shareholders. But suddenly Mr. Fink is prioritizing the interests of … [Read more...]
Is Competition Finally Impacting Netflix?
Anna Nicolaou reports for the Financial Times that Netflix is blaming less-than-expected subscriber growth in the United States on increased competition and its higher prices. She writes: Netflix added 8.8m subscribers in the final three months of 2019, eclipsing its guidance for 7.6m and analyst forecasts for 7.9m. This was welcome news for the first quarter that the streaming group competed head-on with Disney and Apple, which launched rival services in November. However in the US, its largest market, Netflix added only 420,000 subscribers in the fourth quarter — below its guidance for … [Read more...]
Value Stocks are Nearly the Cheapest They’ve Ever Been…
“Value stocks are nearly the cheapest they’ve ever been compared with growth companies,” writes Jason Zweig in his WSJ column Intelligent Investor referencing a study by Research Affiliates. The study finds that value stocks aren’t necessarily inexpensive relative to their own earnings and assets, but they are when compared to growth companies. It looks like this is another example of an emotionally charged market. When it will end? Nobody knows, but it may not be pretty when it does. Zweig writes: Financial logic says cheap stocks should ultimately earn higher returns than expensive ones; … [Read more...]
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