The Wall Street Journal reports that soaring interest rates and volatile equity markets are causing investors to reassess the value of cash. The chart below shows the YTD performance of the three major asset classes, stocks, bonds, and cash. Cash is measured by the performance of 3-month T-bills. Cash, with a 0.05% return, is the best performing major asset class YTD. The WSJ has more on Wall Street's newfound love of cash. Rick Rieder, managing director at BlackRock Inc., said the world’s largest asset manager is increasing cash holdings by more than 50% in many portfolios … [Read more...]
Archives for April 2022
BIDEN BLAME GAME: Inflation Is Everyone Else’s Fault
You may have seen Joe Biden's pathetic blame game tweet this week where he wrote "Let’s be absolutely clear about why prices are high right now: COVID and Vladimir Putin." Really? It doesn't have anything to do with the Federal Reserve's low rates or the federal government's massive spending? It doesn't have anything to do with Biden's restrictions on oil and gas drilling and transportation? Here's Biden's tweet in full: I know that families are still struggling with higher prices. I grew up in a family where if the price of gas went up, we felt it. Let’s be absolutely clear about … [Read more...]
Can the World Economy Keep Growing in the Face of Mounting Problems?
War, sickness, famine. The problems facing the global economy are beginning to sound apocalyptic. Given the adverse events facing the global economy, it's reasonable to ask if it can still grow. Tom Fairless analyses potential global economic growth in The Wall Street Journal, writing: Economic growth is slowing in large parts of the globe as businesses struggle to navigate a looming slowdown in China and surging prices aggravated by Russia’s war in Ukraine. Surveys of purchasing managers conducted over recent weeks point to weakening growth in major economies such as Germany and the U.K. … [Read more...]
The Painful Truth for ESG Investors
You have undoubtedly seen the glossy product brochures for Environmental, Social, and Governance (ESG) funds. They promise strong performance and the chance to impact the world for the better. But it turns out, that neither of those promises is being kept. Sanjai Bhagat reports in the Harvard Business Review: As of December 2021, assets under management at global exchange-traded “sustainable” funds that publicy set environmental, social, and governance (ESG) investment objectives amounted to more than $2.7 trillion; 81% were in European based funds, and 13% in U.S. based funds. In the fourth … [Read more...]
WAGE INFLATION: Tech Worker Pay Soars on High Demand
The tech industry is increasingly paying higher wages to its employees as rampant demand chases scant supply. Suman Bhattacharyya reports for The Wall Street Journal: Wage inflation in the technology sector is accelerating, pressuring companies to boost compensation for key roles by 20% or more as they compete for a limited pool of workers skilled in areas such as cloud computing and data science. There is no single source of data on all tech jobs, but it is clear from a range of market analysts and executives that demand for labor in the tech sector is on the rise. During the first … [Read more...]
Guess Which States Are Growing the Fastest
You know that Your Survival Guy recommends you live in a Super State. One where politicians care about residents enough to let them keep their own hard-earned money and to leave them alone. There are some state politicians who just don't get it though, and a new analysis from the American Legislative Exchange Council (ALEC) shows just how much damage they're doing. In its new report, Rich States, Poor States, produced in part by economists Arthur Laffer and Stephen Moore, ALEC ranks the states based on their economic outlook. You can already guess which states came out on top. The Super … [Read more...]
Netflix Crashes
The bust in high growth stocks continues to spread with shares of Netflix down 25% in pre-market trading. According to its most recent earnings report, Netflix has lost subscribers for the first time in ten years. Since hitting a peak in November of last year, that’s 5 months ago, Netflix shares are down 63%. How did a company with a market value of over $300 billion and bigger than Exxon, Disney, and Verizon crash so hard? Inflated expectations and an inflated valuation. Netflix was trading at over 50X earnings in November. When growth starts to slow or even reverse at companies trading at … [Read more...]
Retirement Income: Be Realistic, Live within Your Means
You know from here and here that retirement plans aren’t worth a dime if they don’t change with the times—if they’re not dynamic. Planning for retirement and income drawdowns is what I do every day of the week. It’s part of my conversations with you. It’s why we talk, because change happens. Look, we’ve been telling you for years now that you want to live below your means. You want to save until it hurts, work for as long as you can, consider part-time work in retirement, and pay attention to reality. Retirement income draw rates created in the mid-90s are about as relevant today as the … [Read more...]
The USPS Surrenders on Package Delivery
Need to get it there as fast as possible? Don't send it via USPS. The U.S. Postal Service has announced that it will slow down its delivery times for some first class packages. Dean Seal reports for The Wall Street Journal: The new service standards, scheduled to go into effect May 1, will add up to one or two days to some packages traveling long distances. Most package delivery times will be unaffected, and a small amount will arrive one day sooner. The longer delivery times are part of the Postal Service’s plan to reduce more than $160 billion in projected losses over the next decade … [Read more...]
April Boating in New England: Steiger Craft Fisherman ‘31
Over the weekend, we had a chance to hit the water on the north shore of Massachusetts on our friends’ Steiger Craft Fisherman ’31. What a vessel. The weather outside wasn’t exactly a beach day, but the Steiger handled the chop with ease. One of the best parts about this craft is the pilothouse, protecting you from the weather and easily adding a month (and possibly more) on either side of the short New England boating season. Make your boating plans now to get out on the water this summer. If you’re in the Newport area, let me know. I would love to see you. Action Line: There’re plenty of … [Read more...]