Tired of mandates and government overreach? Want to get away? Well, here’s some news to ruin your 401(k). The Biden administration is pushing its radical agenda through retirement account regulation. In this case, it’s a proposed Labor Department rule that was not heavily reported—shocker. The change is to the Erisa Act, which governs your 401(k), and forces plan sponsors (your company or retirement plan provider) to offer funds focused on ESG—environmental, social, and governance. The Wall Street Journal editors explain the rule here: Asset managers like BlackRock are pushing to create ESG … [Read more...]
Archives for October 2021
INFLATION WORSE: The Market Is Pricing in MORE Inflation
The bond market is pricing in even more inflation. The Financial Times reports: Market measures of future levels of inflation have climbed to a decade high this month, as investors digested company reports on how tangled supply chains, pent-up demand and rising energy prices were affecting their businesses. The 10-year “break-even” inflation rate, derived from US inflation-protected government securities, rose to 2.62 per cent on Thursday, its highest level since September 2012 and above the Federal Reserve’s long-run inflation target of 2 per cent. The five-year break-even rate rose to … [Read more...]
BREAKING: November RAGE Gauge, Walmart, and YOUR MONEY
OK, let’s get this out of the way. My proprietary RAGE Gauge is not a prediction tool. It’s a way for me to look at the current landscape and draw my own conclusions. I share it with you because you’re my valued reader and because the best things in life are FREE. As I write to you this morning, I’m thinking about the piece I wrote to you yesterday on one of my favorite rags-to-riches stories. Yes, I love Dave Portnoy’s success with Barstool Sports, but it’s hard not to think about Sam Walton (RIP) and what he did with Walmart, which has been paying dividends for 48 years with 45 … [Read more...]
GROSS MISCALCULATION? New Rivals Threaten Tesla’s Success
Analysts are boasting about Tesla's strong gross margins, but are they sustainable? With seemingly every major automaker and other major manufacturers like Foxconn, and untold numbers of startups getting into the electric vehicle business, how long can Tesla maintain its dominance in the market? In the long-run, are Tesla's high margins possible in a business with such low barriers to entry? Rebecca Elliott reports in The Wall Street Journal: Tesla Inc. TSLA +2.91% notched a third consecutive record quarterly profit, thanks in part to the electric-vehicle maker’s ability to navigate … [Read more...]
FORBES 400: One Bite Everybody Knows the Rules
You’re familiar with the phrase “One bite everybody knows the rules,” if you watch Barstool Sports founder Dave Portnoy’s pizza reviews. Fast forward from his days distributing flyers on the streets of Boston to today, where his media empire is worth hundreds of millions, if not billions. Portnoy connects with his followers. Portnoy’s frozen pizza, One Bite, is now carried by Walmart. If you want to get a feel for just how big Walmart is, check out the list of stores where you can pick up one of his frozen pies at the end of this piece. As an aside, we’re hearing a lot about the Forbes … [Read more...]
FLIP FLOP FED: The Inflation They Said Wouldn’t Come Is Here Now
For months the Federal Reserve has been telling America that they had inflation under control and that it was transitory. Now, Fed governor Michelle Bowman is admitting "that supply-related pricing pressures could last longer than expected." Nick Timiraos reports for The Wall Street Journal: A Federal Reserve official warned in a speech Wednesday night of growing risks that supply-chain disruptions could keep inflation elevated for longer than forecasters have anticipated. While monthly inflation readings should decline from high rates observed in the spring, “I still see a material risk … [Read more...]
RISKY BUSINESS: Pension Managers Risking Clients’ Money to Plug Deficits
It never ceases to amaze me how fiduciaries take risks with other people’s money. A case in point is Farouki Majeed, an Ohio pension manager overseeing the investments responsible for the benefits to over 80,000 retired librarians, bus drivers, cafeteria workers, and other former employees. How is he doing it? By adding risk. Not good. “The solution for Mr. Majeed—as well as other pension managers across the country—is to take on more investment risk," reports Heather Gillers at The Wall Street Journal. "His fund and many other retirement systems are loading up on illiquid assets such as … [Read more...]
MAJOR NEW POLLUTION SOURCE: Electric Vehicles Are Dirtier Than You Think
Despite being touted as a clean energy alternative to gasoline or diesel powered vehicles, Jurica Dujmovic describes electric vehicles as "poised to be one of the biggest new sources of pollution." He writes in MarketWatch: The International Energy Agency (IEA) said this year it’s expecting 145 million electric vehicles (EVs) worldwide by 2030. If governments ramp up efforts to meet international energy and climate goals, the number could soar even higher — up to 230 million — and that’s not counting two- and three-wheel vehicles. That’s a lot of new cars to hit global markets. Also … a … [Read more...]
TIMES OF TROUBLE: No Assets Are Uncorrelated When They All Go to ZERO
When a major financial publication discusses how to leverage your portfolio to boost returns, you realize how dire the financial market situation has become. The strategy works when non-correlated assets remain non-correlated assets. Sounds good on paper. But, Your Survival Guy remembers how investors rushed to the exits in times of trouble three times already this century. The correlating asset? Investors trying to save theirs. So, when strategies depend on non-correlated assets to remain non-correlated, remember, everyone feels the same when you-know-what hits the fan. You and I … [Read more...]
NOBODY WANTS TO WATCH JOE: TV Ratings Fall in Post-Trump Era
Apparently, Americans don't want to watch Joe Biden on TV. Ratings have fallen in the post-Trump years as Americans avoid television. The Financial Times' Anna Nicolaou and Caitlin Gilbert write: As the news cycle has calmed under Joe Biden’s presidency and the pandemic has eased, US media groups have suffered dramatic audience declines, with primetime ratings for cable television news networks CNN and MSNBC falling more than 50 per cent in the third quarter compared with a year ago. Last year’s cocktail of Donald Trump, a deadly pandemic, the US presidential election and historic racial … [Read more...]