Like drivers in the U.S., Europeans prefer SUVs over tiny cars with no speed or cargo space. Those understandable preferences though are bumping up against strict goals the EU has set for lowering automobile-generated emissions of CO2. William Boston and Andrew Barnett report for The Wall Street Journal, writing: In the early years of Europe’s effort to curb emissions, manufacturers were able to rely on growing engine efficiency as well as regulatory exemptions and loopholes to cut emissions. But as the goal became more demanding, pressure rose to develop new technologies, especially electric … [Read more...]
Archives for September 2020
You Invest They Win, AGAIN
Let’s file this one under You Invest They Win shall we? Unprecedented monetary policy intervention by the Fed has done what all unprecedented interventions by the government do, create winners and losers. In this case, the winner is BlackRock. The Fed picked the firm to handle its corporate bond buying program. Of course, BlackRock's share of the corporate bond market grew, and the big got bigger. As one investment professional told the Wall Street Journal “The unprecedented actions taken by the Fed during Covid-19 just accelerated the trend where the biggest products get … [Read more...]
Like a Monkey with a Shotgun: Retail Investors Find Derivatives
There are perhaps fewer things in investing more terrifying than retail investors armed with derivatives. It's like giving a monkey a shotgun in a crowded room. The influx of retail investors into the market at the onset of COVID-19 shutdowns has added an unpredictable element to the market. An abundance of naked call buying has unbalanced things, and could lead to trouble. The Economist explains: Who bears most responsibility for the volatility? First, small-trader flow is much larger in size, although it was likely dispersed among more listed companies. Second, and more importantly, … [Read more...]
The World Gets Back to Buying Clothes, but Online
Nike's online sales boomed in the second quarter, increasing by 82% compared to the year before. The Wall Street Journal's Khadeeja Safdar reports: Nike Inc.’s sales rebounded in the summer quarter after slumping earlier during the coronavirus pandemic, as rising digital sales offset declining revenue at traditional stores. On Tuesday, the sportswear company said revenue was $10.6 billion in the quarter ended Aug. 31, down 1% from the prior year. Digital sales increased 82%. “These are times when the strong can get stronger,” Chief Executive John Donahoe said on a conference call with … [Read more...]
Are You Working with Sound Investment Counsel You Can Trust?
When it comes to your money, one question you must be able to answer is: Are you working with investment counsel you can trust? Are you working with a counselor who adheres to the fiduciary rule—someone who, by law, makes investment decisions that are best for you, not them? Are you working with someone who’s seen it all? Yes, stocks do crash. That at least puts you at the starting line. Next, you and your counsel need to develop trust. This comes in many ways. The idea is to get to a level where you can ask your counsel anything, knowing you’ll have an answer with the truth you deserve. … [Read more...]
NYC Hotels’ ‘Temporary Shutdown’ Turns into Permanent Closure
Since the beginning of COVID-19 shutdowns in March, New York City has been suffering. At the top of the list of those businesses worst affected is the hotel industry. What were planned to be only temporary shutdowns have turned into permanent closures for many locations. Patrick McGeehan reports for the New York Times: Many of New York City’s biggest hotels closed their doors in March when the coronavirus wiped out tourism and business travel. The shutdowns were supposed to be temporary, but six months later, with no potential influx of visitors in sight, a wave of permanent closures has … [Read more...]
Americans Make Peace with Shopping Online for Groceries after COVID-19
Americans quickly embraced the idea of shopping online for most things. First books launched Amazon, and then inexpensive MP3s launched Apple's iPod. The hardest in-store shopping habit to give up has been groceries. That is changing now, thanks to people avoiding grocery stores to keep away from COVID-19. Teresa Rivas writes in Barron's: Americans can be very picky about their avocados. That was one of the reasons often cited by experts to explain why people were happy to buy almost everything except groceries online. E-commerce penetration of the food and beverage sector, which includes … [Read more...]
One Simple Way to Help Your Finances in Times Like These
You know how hard it is to talk about money. That’s why I want you to blame Your Survival Guy when you bring up the subject with your spouse. That’s why I’m here, to help you both beat inertia and take care of your financial well-being. One easy way to do this is to start by saying, this Survival Guy feels that simply discussing money will help get us to the retirement we deserve. Use me as the ice breaker: “He says…” Grant Donnelly, assistant professor of marketing at Ohio State University in Columbus, Ohio, can back me up with research. He's quoted in the Wall Street Journal, … [Read more...]
Nikola Founder’s Exit a Reminder of How Manias Can End
The mania in electric vehicle stocks has been nothing short of spectacular in 2020. Tesla has become the 7th largest company in the United States based on the anticipation of what might be many years in the future. Nikola, an electric-truck startup that doesn’t yet produce anything, was larger than Ford Motor Company for a few weeks over the summer. Manias are like wild parties. Both are a blast while they last, but the hangover you wake up to makes you swear you’ll never do that again. William Boston and Ben Foldy report in The Wall Street … [Read more...]
It’s Never a Bad Time to Downsize Your Home
Now, more than ever may be a good reminder that it's never a bad time to downsize your home. Americans are house rich and cash poor, not a great mix in times of economic turmoil. Wealth in cash is very liquid, you can spend it on what you need when you need it. Even stocks and bonds are relatively easy to sell to generate funds. But houses, they're a lot harder to sell quickly if you want to get all the value from them you deserve. In the Wall Street Journal, Ryan Dezember explains how many house-rich but cash-poor Americans are faring today, writing: Americans with mortgages have … [Read more...]