One of my favorite investing quotes is from the late, great Jack Bogle, founder of Vanguard and creator of the index fund. In good times and, especially in bad, I love this quote. You know from my piece yesterday that investors have a way of doing the opposite of what they should. For example, when you’re unloading the groceries, and a dozen eggs fall to the floor, you might hear, “Don’t just stand there, do something!” The same reaction occurs when bad stuff happens to the stock market. This is when questions are asked, “Did you see the market today? How’s our money doing?” Bogle knew … [Read more...]
Archives for December 2021
Looking Back at a Strange Year in Markets
People often look back at the end of a year and evaluate what happened. The year 2021 was strange in many ways, and markets were no different. In the Financial Times, Katie Martin remembers the year's biggest moments, writing: This has felt like a long year in financial markets, studded with events that offered insight in to the rapidly changing nature of trading and investment. From across the Financial Times’ markets team, here is our pick of the standout moments of 2021. GameStop: revenge of the nerds In January, US stock markets were transfixed by the outsized trading volumes and … [Read more...]
If It Ain’t Broke Don’t Try and Fix It
You and me? We’re the same. We’re simple people. We like simple quotes that wrap up life in a tidy package with a red ribbon. Here’s a couple of quotes I’m thinking about this morning. “If it’s too good to be true, then it probably is,” and, “If it ain’t broke, don’t fix it.” Simple. Concise. Easy to understand. Why, then, for cryin’ out loud, do investors mess with these truisms, and make a mess of their life’s savings? I’ll try and explain. Let’s start with the first one. Real easy. Say it out loud with me, replacing “it” with “an investment(’s).” Here we go, “If it’s too good to be true, … [Read more...]
Boom: An Arc-Flash Explosion on Billionaire’s Row
“The developer of 432 Park Avenue, one of the world’s tallest and most luxurious condominium towers, on Wednesday filed its answer to a $125 million lawsuit from the building’s condo board over alleged construction defects, calling the board’s suit ‘ill-advised’ and ‘an effort to wrest unwarranted payments’ from the developer,” reports The Wall Street Journal. “The answer, filed in New York State Supreme Court by an entity controlled by Los Angeles-based CIM Group, also alleged that the complaints raised by the board had been ‘vastly exaggerated.’” Sounds like a problem to Your Survival … [Read more...]
Will Automation Disrupt the Nail Salon?
In America, robots have long dominated manufacturing processes, but are they now coming for the services industry? According to the New York Times, mani-pedi customers may soon be served by robots rather than human beings. Ellen Rosen reports: Omri Moran was on time for a first date, but the young woman, inexplicably, was late. She finally arrived, but skirted the question of her tardiness, saying “Never mind, you wouldn’t get it,” Mr. Moran recalled. Not easily deterred, Mr. Moran, then the head of a geo-tracking start-up, persisted and discovered the reason: His date had ruined, and … [Read more...]
Hyundai Isn’t Giving up on Hydrogen
Despite the heavy lead in technology and propagation by electric vehicles, Hyundai isn't giving up on hydrogen fuel cell powered cars just yet. Alan Ohnsman reports in Forbes: Hyundai Motor has a highly anticipated electric hatchback heading to the U.S. in the coming weeks and showed off an edgy concept version of a battery-powered midsize SUV in Los Angeles this month. Yet even as it prepares to take on Tesla in EVs, the Korean industrial giant also has big plans to take hydrogen power mainstream—though it’s an option that may not be fully competitive until the end of the decade. Hyundai … [Read more...]
Your Survival Guy: Your New Year’s MONEY Resolution
Anyone thinking about a New Year’s money resolution? I remember when I was a kid my dad telling me, “Saving money is like planting a tree. The best time to plant a tree was yesterday. The second-best time is today.” I’d be thinking tomorrow would be just fine too so could go play street hockey. We’d get my change, dump it on the floor, and start feeding quarters, dimes, nickels, and yes, pennies into paper rolls. We’d count the dollar bills, some fives, maybe a ten or twenty and then grab my bank passbook and make the deposit. Counting money, once we got going, was fun, especially after … [Read more...]
ELECTRIFYING: Would You Convert Your Gasoline Truck to Electric?
Would you convert your truck or car that runs on gasoline to electric power? GM plans to help its customers achieve that goal by offering electrification kits to owners. Al Root reports in Barron's: Now any vehicle can become an electric vehicle. General Motors (ticker: GM) on Wednesday announced a plan to offer electric-vehicle component sets. The sets will allow anyone, mainly businesses, to turn older, gasoline-powered vehicles into EVs. Converting a car isn’t easy and will take, for the most part, trained professionals. Still, for some vehicle owners—ranging from hot rod … [Read more...]
Understand the 800-Pound Gorillas in the S&P 500
OK, this stock market is top heavy. Remember, you buy the stock market when you buy a 500 index. But do you know how that index works? Look at the S&P 500 for example. Sure, it's 500 stocks, but about a third of the index is dependent on five companies. Why? Because it's a market cap weighted index meaning the size of a company, its market cap (price times shares outstanding) dictates its influence. “Remember when a trillion dollars was a lot of money?” asks Spencer Jakab in The Wall Street Journal’s Heard on the Street feature, “Gigantic Stocks Are a Reason to Worry.” Five companies … [Read more...]
SQUARE PEG, ROUND HOLE: Are ETFs and Muni Bonds a Good Match?
There are some asset classes that lend themselves well to the high liquidity world of ETFs, and some that don't. The municipal bond market is not a very liquid part of the investing universe. The mismatch between ETFs' super liquidity and munis' lack thereof could be a problem in the future. Heather Gillers reports in The Wall Street Journal: Investors this year spent record amounts of cash buying shares in all types of ETFs, baskets of securities that trade as easily as stocks and typically track indexes. They are drawn to muni ETFs for their easy access to tax-exempt yield at low cost under … [Read more...]
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