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Archives for October 2021

Gold Goose Inc. Keeps Banks off Your Farm

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Listen, this is how I want you to think about yourself as an investor. Imagine you own a wonderful business. We’ll call it Gold Goose Inc. It pays you a handsome salary, plus annual increases to keep up with the times. You retire with a nest egg worth more than you ever thought you’d be worth, and you need to invest it. What do you do? For Your Survival Guy, the next best thing to Gold Goose Inc. is to invest in a basket of eggs that pay dividends that regularly increase to keep pace with inflation. That’s exactly what Young Research’s Retirement Compounders stocks try to … [Read more...]

The Chip Shortage Is Not Even Close to Over

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The global shortage of computer chips is not getting better. Delays are lengthening, and companies depending on chip supplies are scrambling. This will surely change the competitive dynamics in the semiconductor industry a few years out. Just in time inventory methods will be moderated, and governments are going to act to prevent situations like this in the future. In macro terms, this likely keeps the heat up on goods inflation which may start to push inflation expectations higher unless the Fed begins to use more hawkish rhetoric. The Wall Street Journal reports: Almost a year into a global … [Read more...]

My Neighborhood Looks Like a Drone Strike Target

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OK, Your Survival Guy’s writing to you this morning with the house power restored, but no internet service. Let me say, there’s some weakness in security with no internet when, for example, your property security cameras depend on Wi-Fi. (Note to self, when is security more important and necessary than when the you-know-what hits the fan?) And yesterday, stuff was flying around Newport, and it seriously felt like a hurricane at times. No exaggeration. The fierce winds even knocked out observation systems. The Newport Daily News reports: Thousands of New Englanders were without power early … [Read more...]

TESLA OPTIONS: “One of the Biggest Casinos on Wall Street”

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Rampant speculation in Tesla options has driven their trading activity to surpass that of actual shares. Gunjan Banerji calls the trade of Tesla options "one of the biggest casinos on Wall Street." He writes in The Wall Street Journal: Traders are swarming the market for Tesla Inc. options to bet on a continued stock rally. Roughly one of every two dollars traders spent in the U.S.-listed options market on Monday and Tuesday went to Tesla options, according to Cboe Global Markets CBOE -0.05% data. On Monday, traders spent more money on Tesla bets, in what’s known as options premium, than … [Read more...]

BLACKROCK’S BITCOIN-ESG PARADOX: You Can’t Have It All

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You know that you can't have it all. You can't say one thing and do another. That's the fastest way to break the trust of the people around you. You know BlackRock has been selling environmental, social, and governance (ESG) funds, promising investors they'll change the world by lowering greenhouse gas emissions. It's all a game to charge higher fees for funds, and to drive the EGOs of those in charge. But what you won't see anything about in the glossy ESG brochures is BlackRock's investments in bitcoin mining. That's because mining bitcoin is energy-intensive, generating massive amounts … [Read more...]

TAIL WAGGING THE DOG: Options Boost Tesla Shares

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Bloomberg's Lu Wang reports on options activity that boosted shares of Tesla in recent trading, writing: There were plenty of reasons for Tesla Inc. to rally Monday. Everything from Hertz Global Holdings Inc.’s blockbuster order to buying by passive funds and a squeeze on short sellers. But other forces were at play in goosing the gain: options traders who piled on bullish bets, and market makers who were forced to purchase shares to hedge their positions as the stock surged. In other words, the tail wagging the dog. It’s a narrative that’s come up repeatedly in … [Read more...]

Is Your “Wealth Adviser” a Fiduciary? Here’s How to Find Out

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How do you know when you’re working with a fiduciary—someone who by law is required to do right by you? Well, you can ask. But with all the big fancy titles out there, it’s hard to know whom to believe. One recommendation I like to give to prospective clients is, get it in writing. Ask for a copy of the ADV-II to see if your “wealth” adviser is actually registered as a fiduciary with the SEC. Action Line: There’s a lot of wiggle room with titles. Make sure you’re getting what you thought you were signing up for. … [Read more...]

3D Printed Homes Filling Housing Gap in Austin, TX

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Austin, TX could soon be home to a development of up to 100 3-D printed homes. Nicole Friedman reports in The Wall Street Journal: A major home builder is teaming with a Texas startup to create a community of 100 3-D printed homes near Austin, gearing up for what would be by far the biggest development of this type of housing in the U.S. Lennar Corp. and construction-technology firm Icon are poised to start building next year at a site in the Austin metro area, the companies said. While Icon and others have built 3-D printed housing before, this effort will test the technology’s ability to … [Read more...]

Your Key to Happiness Is to Keep On Swimming

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On Friday night, Becky and I visited with college friends for dinner at Scales and Shells here in Newport. It was so much fun. It had been a few years since the last time we were together, bringing back some great memories of our time at Babson. With our oldest child now a sophomore in college and our youngest applying, it’s a funny time to be a parent. We’re in sort of a slack tide, knowing day-to-day life will be a lot different this time next year when we’re empty nesters. It’s hard not to think, “Wow, this has gone by fast.” On Saturday, Becky and I felt like college kids taking a … [Read more...]

Democrats’ New Tax Starts With the Wealthy. So Did Income Taxes

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Despite promises that it "costs nothing," Democrats are planning to plug the holes in the budget their massive reconciliation bill is creating by creating a tax on billionaire wealth. They promise that the tax will affect fewer than 1,000 people. The tax on unrealized capital gains on liquid assets aimed at "billionaires," will likely induce its wealthy victims to simply shift the types of assets they own. In all likelihood, much like the income tax, the wealthy will become so good at avoiding the tax, the threshold for paying it will be moved down to millionaires, and eventually to everyone … [Read more...]