You want to do what you’ve dreamt about, right? Well, a client of mine is doing just that while on sabbatical, as he cleans up his gardening shed, and spends more time helping his parents get their estate in order. He’s doing the things we always think about but have a hard time actually doing. We laughed as I told him my clean garage thanks him for the inspiration. One of the topics we covered during our conversation was “the greater fool theory of investing”—how investors believe someone will buy their stocks at a higher price. That’s a sucker’s game. That’s not investing, and right now … [Read more...]
Archives for February 2020
Coronavirus Infects Stock Market: Part IV
Who loves a market-rattling pandemic more than CNBC? It’s a ratings bonanza that allows them to fill the airwaves with 24/7 fear, and when there isn’t a pandemic, they fill it up with fast-money greed—sell, sell, sell, buy, buy, buy. Same old tune, different day. Imagine if you could get away from it all and take a deep breath (while drinking plenty of water to keep the coronavirus out of your lungs). No one knows what the coronavirus is going to do to the markets over the short-term. What we do know is, it’s causing plenty of investors (not you, of course) to be uncomfortable. A former … [Read more...]
Walmart Prime?
Matthew Boyle reports at Bloomberg that Walmart is developing its own membership program to rival Amazon Prime. He writes: The world’s largest retailer is developing a paid membership program to challenge the internet giant’s Prime offering -- which has become the default online shopping option for millions around the globe. The service, called Walmart+, will expand on the retailer’s existing grocery-delivery subscription service, which it introduced last year. Chief Customer Officer Janey Whiteside will spearhead the service’s development and rollout. A Walmart spokeswoman confirmed the … [Read more...]
Coronavirus Infects Stock Market: Part III
Stocks have lost close to 2,000 points over the last two days. Futures are up a little this morning as I write to you but that doesn’t mean anything really, which reminds me, the less you dwell on the future the better off you tend to be as an investor. Remember, the pain you feel from losing money far outweighs the fleeting feeling of gains—mainly because you get used to the gains—you become comfortable with your net worth. That’s a mistake. Much of my time working with successful Americans like you is spent talking about their lives, specifically, where they are in it. Yes, we’ve … [Read more...]
You Have to Read This
This is a beauty from Bloomberg Businessweek. If you want insight into what has (or had until a few days ago) been driving the speculative fervor in stocks like Tesla and Virgin Galactic, look no further than 2020’s version of the Yahoo Finance or Raging Bull message boards. Bloomberg's Luke Kawa reports (emphasis is ours): In a dingy corner of the internet is a message board, soaked in profanity, bro-speak, and greed, where posters with handles such as OverthrowYourMasters and yolo_tron campaign for their favorite stocks, putting up screenshots from their online brokerage accounts of their … [Read more...]
Coronavirus Infects Stock Market: Part II
Yesterday you read that the coronavirus was causing panic in markets, sending stock prices plummeting. Below you can see that, while DJIA stock prices fell 3.54% in yesterday's turmoil, bond prices (as measured by the Ryan/NASDAQ Laddered Treasury Index) rose 1.05%, a difference of 4.59% over stocks. If you don't understand the value of bonds, this is it. Bonds are a counterbalancer in your portfolio against the volatility of stocks. Bonds will always matter to you, especially when the going gets tough. If you are just beginning to invest in bonds, consider a laddering strategy. And … [Read more...]
Democrats About to Kill Virginians’ Right to Work
You have read my warnings of the impending push to eliminate the Right to Work in Virginia. First, you saw, Will Virginians Allow a Socialist to Take Away Their Right to Work? Then, you read that After VA Democrats Take Your Gun, They’ll Take Your Job. Now, Democrats are preparing to do just that. A bill has been passed in the House and is awaiting the Senate's approval that would adopt rules similar to New York's Taylor Law. Ken Girardin explains at The Wall Street Journal: Virginia Democrats are poised to legalize collective bargaining for government employees. In November Democrats … [Read more...]
Coronavirus Infects Stock Market
Over the past 52-weeks, you’ve received over five percent on any combination of short to mid-term agency, corporate, and/or treasury bonds, and that’s not counting today’s expected bond rally. Remember, bonds tend to go up when stocks go down. As the coronavirus creates panic for stock investors (futures are way down as I write to you), bonds along with safe-haven gold are rallying. What the coronavirus will mean for stock investors this year is unknown. But what’s clearly known is many stock investors head for the exits when panicked. Your key takeaway is to make sure you have your bond … [Read more...]
Large Downgrades Test High Yield Debt Market
Joe Rennison reports for the Financial Times that "fallen angel" downgrades could test the high yield debt market. He writes: When S&P withdrew General Motors’ top-quality credit rating in May 2005, sending $41.5bn of debt crashing into junk territory and creating the largest ever “fallen angel”, it triggered the biggest sell-off in corporate bond markets since the dotcom bust. Along with the simultaneous downgrade of Ford, which remains the second-largest fallen angel after its $40.8bn of debt was docked, the bedrock of corporate America shook. “It is not just they that have a … [Read more...]
Breaking News: Why Fidelity is #1
You now have yet another reason to consolidate your assets with my favored Fidelity Investments: Fidelity takes protecting your most valuable financial information seriously. Yesterday, it was announced that Fidelity is spinning off software start-up Akoya, a platform that gives customers more control over how their bank-account information is shared. Without a service like Akoya, apps can scrape your account gaining access to information you may wish to keep private. “The platform,” explains Justin Baer in the WSJ, “aims to put an end to ‘screen scraping,’ the process where the app … [Read more...]
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