The Wall Street Journal reports that oil demand is rising again as the world reopens after its coronavirus induced shutdown, writing: Oil consumption is rising again in those parts of the world emerging from coronavirus lockdowns, helping to alleviate a global glut and rebalance a market stymied by months of low demand and a devastating rout that saw prices drop as much as two-thirds this year. Green shoots of an oil recovery are sprouting with regions of China attempting a semblance of normal life as lockdowns are eased and parts of Europe and the U.S. allow businesses to reopen. “We … [Read more...]
Archives for May 2020
Investors Flock to Chinese Distribution Facilities
The Nikkei Asian Review's Taizo Wada reports that investors are putting money into Chinese logistical real estate, writing: As China shakes off the economic impact of the coronavirus outbreak, investors have flocked to funds focused on logistics facilities there and elsewhere in Asia, anticipating that growth in e-commerce will drive strong demand even after the pandemic. Singapore-based GLP last month closed a $2.1 billion fund with a portfolio of 34 properties across 18 Chinese cities. Participants include seven Chinese institutional investors, six of which are new clients of the … [Read more...]
An Alternative Approach to Investing when Markets are Down
In 2008, when investing seemed like an exercise in futility to many investors, I explained an alternative approach. This approach has worked for me now for over five decades. I learned this method from the teachings of Ben Graham, and have successfully employed it my entire career. Here’s what I wrote: Concentrate on Shares, Not Price... The stocks and funds you own pay you dividends based on the number of shares you own, not on the price of those shares. Unless you are fortunate enough to be Gandalf redux, it is likely that the price of most of the shares you own in 2008 is down hard, to … [Read more...]
You Owe it to Yourself to Continue Doing What You’re Good At
Coronavirus Infects Stock Market: Part XLVI Clients of mine on the West Coast, we’ll call them Rock and Tess, sold their business a number of years ago. They were in their early 50s. Rock could care less about money. Tess handles that. Rock fixes things. Rock can fix just about anything mechanical. Rock is still working. He doesn’t need to. But Rock loves his work. He continues to do what he loves to do. In speaking with Tess this week, I remind her that a j-o-b is one of the most valuable assets in the world today. If “retirement” can wait, why not let it? I tell her … [Read more...]
Should the Trump Justice Department Fight an Uber-Grubhub Acquisition?
Should the Trump administration fight a proposed takeover of Grubhub by Uber? If the two companies unite, they'll own 55% of the market for food deliveries. That's a staggeringly large number in a very young industry. Regulators might want to look at the path taken with Facebook. They allowed the social network to purchase Instagram and WhatsApp, delivering to it massive market share, and killing two of the best options for creating a competitive market. Since then, Facebook has been embroiled in scandal after scandal. Cara Lombardo reports on the proposed deal for the Wall Street … [Read more...]
Your Survival Guy’s Home (and Money) Protection Plan
Coronavirus Infects Stock Market: Part XLV Your Survival Guy was recently asked how I would protect my family if a gang showed up at my door (answer below), which leads me to wonder: Where you live may never be more important. Elon Musk has had it with California. Put me in jail, he says, but don’t think I’m letting my business die without a fight. How hard would it be for you to move to a Red state? I’m not saying you do it now, but in prep for the next unforeseen event you might want to think about it. Would being in a Red state improve your situation? We might find out, as guys … [Read more...]
Established Brands Take Revenge on Startups
The coronavirus effect has halted a trend toward startup consumer companies that has been ongoing in the industry for years. Carol Ryan reports in The Wall Street Journal: Seeking comfort while sheltering at home, shoppers are reaching for Hershey Bars rather than gluten-free energy balls. That is bad news for challenger brands, whose healthy snacks were taking market share from global food companies until very recently. Discussing their latest quarterly results, executives at Nestlé, NSRGY -0.32% Kraft Heinz and Procter & Gamble PG -0.66% all said consumers are returning to … [Read more...]
“Good Golly Miss Molly!” You Own a Bank?
Coronavirus Infects Stock Market: Part XLIV When you visit me in Newport, R.I. you’ll need your GPS. Our office is at 98 William Street, but you’ll never find a number on our building. We like it that way. The privacy. The building? It’s beautiful. It’s brick with ivy climbing up the side, manicured trees in front, protected by a black wrought iron fence. Welcoming? Perhaps, that is, if you can get beyond the startling “No Parking” sign. Once inside the gates, you’ll see a solid wood door protecting the foyer, with an American flag, and a security phone setting the tone. Once you dial-in, … [Read more...]
The Fed Drowns Bond Market Signals
During normal times in markets (remember them?), bond yields play an important roll in signaling investor sentiment. With unprecedented Federal Reserve intervention in bond markets, those signals are completely wiped out. Colby Smith and Tommy Stubbington report for the Financial Times: When the Federal Reserve stepped in to support the world’s largest debt market in March, fixed income investors were relieved. But in successfully staving off a more pronounced financial crisis, the Fed has further distorted markets, they say, overwhelming the once-reliable signals that bonds used to give … [Read more...]
You Can Kiss Summer Goodbye in Newport, R.I.
Coronavirus Infects Stock Market: Part XLIII You can kiss this summer goodbye. This weekend Newport opened for business, but it’s hardly open. There were cars driving along Thames Street, but hardly the traffic you see on a typical Mother’s Day. Most of the cars were just driving with no intent on stopping. The two restaurants I saw open had maybe four customers combined. Hotels are already thinking about next summer—if they survive. Governor Raimondo still has a 14-day quarantine requirement for out-of-state guests. Hotels can’t take reservations until they know when the quarantine will … [Read more...]