When you measure the value of your dollars, it should be as dependable as the number of inches in a foot. Judy Shelton understands this simple principle better than most. Her nomination to the Federal Reserve Board of governors will be voted on by the Senate Banking Committee on July 21. James Freeman explains in The Wall Street Journal why this has so many people so angry. He writes: This year the Fed’s balance sheet surged to more than $7 trillion from a pre-Covid $4.2 trillion to offset the economic lockdowns. A slight recent decline offers hope that the money-printing festival may be … [Read more...]
Archives for July 2020
Is this Rally Only Good Until Earnings Season?
At the Financial Times, Michael Mackenzie suggests that earnings season could put an end to the current stock market strength. He writes: Global and US economic data are beating forecasts and there is growing optimism that corporate profits will do likewise, as the second-quarter earnings season plays out in coming weeks. One strong theme supporting equity markets since the worst of the pandemic panic in March is that the shock to companies’ profits will be brief. Before long, the thinking goes, growth in net income will resume its upwards trend. Granted, that rebound is expected to … [Read more...]
Timeless Advice on How Parents Can Help Students Succeed in School
Here’s a wonderful post from my friend Mike Spinrad on how parents can help students succeed in school. Thank you Mike for your timeless advice. Many years ago, as a student teacher in an urban high school, I asked a parent for help in teaching an unengaged and out of control teenager. The parent responded that it was my job and not her's to teach the child. While that unhelpful suggestion may be technically true, parents can do much more to ensure their child's success. Outlining the major concepts of his book, Our Schools and Our Future, Chester Finn wrote in 1991: “…we need to … [Read more...]
The EV Bubble Is now Undeniable
There is a bonafide and undeniable bubble in electric vehicles led by Tesla. Tesla is now almost 50% larger than Toyota. Tesla will likely produce less than 1 million cars this year. As of pre-market, they will be the 11th largest market cap company in the U.S. The EV dreamers seem to expect the electric vehicle market to become a winner-take-all situation. That's an odd conclusion given that many global auto companies are national champions offering good jobs and will likely get support from their governments if Tesla begins to dominate. EVs are also likely to become extremely … [Read more...]
Food Companies Struggle to Keep up with Demand
Shifts in food supply and demand resulting from COVID-19 shutdowns have caused food companies to fall behind, creating shortages at stores. The Wall Street Journal reports: Grocers are having trouble staying stocked with goods from flour to soups as climbing coronavirus case numbers and continued lockdowns pressure production and bolster customer demand. Manufacturers including General Mills Inc., Campbell Soup Co. and Conagra Brands Inc. say they are pumping out food as fast as they can, but can’t replenish inventories. Popular items such as flour, canned soup, pasta and rice remain in … [Read more...]
Your Survival Guy Emergency: Engines Won’t Start, We’re Drifting into the Rocks
Boating conditions off Newport can be a nasty mix. Rolling ocean swells, an opposing current, mixed with 25-knot gusts, can create a challenging chop. Nevermind the reefs hiding under the surface like a school of sharks the size of Jaws waiting for you to get too close. Over the Fourth of July weekend, we traveled by boat from Newport, RI to my parents' house in Mattapoisett. Talking with my dad, coming ashore, motoring to his slip in his dinghy, he told me about the engine problems he’d been having and how he and his boatyard guy came up with a fix. After a long weekend of social distance … [Read more...]
What Is Going to Happen to Oil Prices?
Oil prices recently traded at less than $0/barrel. In 2008, prices were over $120/barrel. What is going to happen to prices for oil in the future? Joe Wallace examines the market in The Wall Street Journal, writing: Some think the bust will set in motion a boom, predicting that investment in oil-and-gas production will dry up and propel crude prices back above $100 a barrel. “That funding pressure is going to be massive. It’s going to be really difficult for some of the producers to produce,” said Trevor Woods, chief investment officer of Ohio-based hedge fund Northern Trace Capital. “We … [Read more...]
You’re Telling Me about 8% and Pickleball
If you’re thinking about retirement or investing in some high yield real estate deal, don’t. Because as soon as you run a few scenarios grounded in reality and not “pie in the sky” dreams, you quickly realize losing income and principle are grave mistakes you don’t recover from, ever. In my conversations with investors, I hear it all. You wouldn’t believe some of the dividend yields I’m told are out there, ranging from eight to twenty percent. Good luck with that. When the government offers ten-year treasuries with an annual yield of 0.66%, it’s time for a reality check. “But,” you … [Read more...]
Gold Price Soars to Nine Year High
Prices for gold have soared over $1,800 an ounce, a range that hasn't been reached in nine years. Neil Hume reports for the Financial Times: Gold prices rose to more than $1,800 an ounce on Wednesday for the first time in nine years as data showed investors had stashed a record $40bn of cash into funds backed by the precious metal during the first half of the year. The commodity, widely favoured by investors as a store of value in times of stress, breached $1,810 during afternoon trading in London, with a gain of more than 1 per cent on the day. Gold has risen about 19 per cent so far … [Read more...]
Walgreens Fights Online Pharmacy Rivals with In-store Doctors Offices
Sharon Terlep explains the latest efforts by Walgreens to become a healthcare provider by adding doctors offices to its pharmacies. She writes in the WSJ: The largest U.S. drugstore chain by stores is pairing with primary-care provider VillageMD to open 500 to 700 clinics at Walgreens sites across the country over the next five years. Walgreens will pay VillageMD $1 billion in equity and debt over the next three years in exchange for a 30% stake in the Chicago-based startup by the end of that term. Walgreens and rival CVS Health Corp. are in a race to become go-to treatment centers, … [Read more...]