The SEC just greenlighted the NYSE’s proposal to allow companies to raise capital through direct listings. This is a big win for entrepreneurs, venture investors, as well as retail investors. It’s not such good news for the big banks that underwrite most of America’s initial public offerings, taking a criminal 7% of the proceeds in most cases and too often mismatching supply with demand. Big institutional investors also won’t like this news as it may eliminate the first-day IPO pop that few small investors can gain access to. The WSJ has more: The SEC approved the new kind of direct … [Read more...]
Archives for December 2020
Red State Cities Booming as People Look for a Better America
What's to love about high taxes, high cost of living, high regulations, and business-killing coronavirus mandates? Nothing. That's why many of America's small business owners and entrepreneurs are leaving blue state cities where their retirement savings are treated like a piggy bank for politicians. They want to choose their own retirement life. They're moving to red state cities where governors and mayors look at business and entrepreneurs as something to be nurtured, not targeted for redistribution. One of the newest destinations for Americans fleeing their city is Nashville, … [Read more...]
EV Stocks Officially a Mania
This probably ends poorly for those wagering their hopes and dreams on EV stocks. Not for nothing, but the number of new entrants in the space is off the charts. Doesn’t really give one confidence that there are high barriers to entry. Dyson can attest to that, which is at least partly why the company dropped its electric vehicle efforts. They didn’t see enough room for differentiation. Elon Musk likely recognizes that as well which is why he’s peddling auto-pilot software that, according to some independent analysts, isn’t as good as other products on the market. Now you have … [Read more...]
Robinhood’s Not Coming to Save You
OK, you don't need to look too far to see how low-interest rates are. Talk about a tax on savers. And the destruction of the dollar isn't far behind. That's why my favorite investment continues to be in yourself. If you have a job, try and keep it for as long as possible. If you're retired, invest your dollars like they're the last ones you'll make. I know you don't want to hear this. But there is no Robinhood coming to save us. On the contrary, the more this market melts up, the more it will melt down when the reckoning arrives. And arrive it will. Remember, "adventures make one late for … [Read more...]
Did Google and Facebook Create an Antitrust Pact?
The Wall Street Journal's Ryan Tracy and John D. McKinnon report that Facebook and Google may have created a pact to fight antitrust suits against them. They write: Facebook Inc. FB -2.09% and Alphabet Inc.’s GOOG -0.91% Google agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week. The suit, as filed, cites internal company documents that were heavily redacted. The Wall Street Journal reviewed part of a recent draft … [Read more...]
How Can You Succeed When Politicians Treat Your Business Like Their Piggy Bank?
New York City Mayor Bill De Blasio made official what most business owners in the city have known for a long time, his mission is to redistribute their wealth. Mayor Bill de Blasio: "Our mission is to redistribute wealth." pic.twitter.com/42Dv9tsRK0 — The Hill (@thehill) December 18, 2020 At The Blaze, Breck Dumas reports on what De Blasio told viewers of a press conference: The COVID era has taught us that so clearly, and we need to do better and we will," de Blasio said. "And that means a commitment to fighting disparities and inequality in every part of the life of New York City … [Read more...]
The Tech Landscape Is About to Get Trickier
In Barron's, Eric J. Savitz explains how, despite a booming 2020, the tech landscape is about to get trickier. He writes: No question, 2020 has been a horrific year. But for tech investors, it was sheer bliss. Morgan Stanley analyst Keith Weiss wrote this past week that software stocks had gained 81%, on average, in 2020, driven by low interest rates, tailwinds from the work-from-home shift, and the lack of alternatives for growth investors. As a bonus, companies with rising subscription revenues tightened their belts on expenses, driving up margins. The Nasdaq Composite has rallied … [Read more...]
A Christmas Story: Rich Grandchild, Poor Grandchild
In this most wonderful time of the year, you don’t need to break the bank to help a grandchild. Give the gift that keeps on giving—COMPOUND INTEREST—and let TIME do the heavy lifting. You don’t need to fill Santa’s sleigh with cash. Tuck a little into their stocking each year while sugar-plums dance in their heads using my favored Fidelity UGMA. Start early. It is the key. Because time is the magic that makes money fly. And yes, TIME is a double-edged sword. It goes by too quickly—and yet it turns hundreds into hundreds of thousands. Do what I illustrate below, and you will stop TIME … [Read more...]
More on the EV Stock Bubble
The EV stock bubble is likely to end real bad for a lot of investors. Make sure you aren’t one of them. NIO a Chinese EV startup that burned $1 billion last year and is likely to burn close to $700 million this year is valued at $70 billion dollars. That’s much bigger than Ford and slightly larger than GM. At some point the ugly reality of arithmetic is going to catch up with the EV speculators. Joanne Chiu and Mischa Frankl-Duval report in The Wall Street Journal: China’s electric-vehicle makers have surged in value, boosted by bold national green-energy targets and individual investors … [Read more...]
January RAGE Gauge: “THE MOST Dangerous Investing Environment in My Lifetime”
Good morning from post-winter storm Gail. Your Survival Guy is safe and sound. Not much of a snowmaker here in Newport. But the snow is pretty, especially this time of year. Let me know how you're faring in your neck of the woods. In my conversations with you, you're telling me about your own island life you've created, and I thank you for that. You're telling me you're getting lost in your reading, doing a lot of thinking, and looking forward to when your band gets back together this Spring. In the meantime, your island life is alive and well. You understand you don’t need to spend a lot … [Read more...]
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