When it comes to your investment portfolio, I don’t want it stuck in a bank. They lend your cash for a song and pay you peanuts. Instead, consolidate your lazy cash at Fidelity. I like the Fidelity Treasury Money Market yielding just shy of 4.5%. I also like individual bonds paying fixed-income investors yields we haven’t seen in a generation. If you need help, I’m here. Justin Baer writes in The Wall Street Journal: In the latest sign that higher interest rates are weighing on banks’ balance sheets—as customers find better yields elsewhere— deposits were down 11% at Schwab and 5% at State … [Read more...]
Archives for April 2023
Life Insurance Sours on Commercial Real Estate
Commercial real estate owners are finding it harder to get loans from life insurance companies as the insurers turn their backs on lending to the sector. Leslie Scism and Peter Grant report in The Wall Street Journal: Life insurance companies, until recently a reliable source of capital for commercial property developers, are turning their backs on office building owners as tens of billions of dollars in office loans come due this year. Many of these insurers have slowed or stopped making office loans, executives and analysts say, interrupting the sector’s decadelong expansion into … [Read more...]
Why You Miss Richard C. Young’s Monster Master List
Happy Monday. Is your advisor a bank? If so, is it lending out your money for a song and paying you peanuts? Fidelity is not a bank. Fidelity is not a publicly traded company. In comparison, Charles Schwab has a banking division and is publicly traded. How about Vanguard? When was the last time you spoke with a phone rep? Are you stuck only in Vanguard funds and ETFs? Are you being penalized by investors in the same fund as you who sell at any sign of trouble? Where Vanguard’s fund managers are forced to sell positions to raise cash, often at the worst times? I want you at the private … [Read more...]
Sega Sammy Offers $776M for Rovio
The company that gave you Sonic the Hedgehog, Sega Sammy, has made a $776 million bid for Rovio, the company best known for its Angry Birds franchise of games and movies. Leo Lewis and Tim Bradshaw report in the Financial Times: Sega Sammy, the Japanese gamesmaker behind the Sonic the Hedgehog franchise has launched a €706mn ($776mn) offer for Rovio Entertainment, the Finnish group that gave the world Angry Birds. The €9.25 a share offer values the mobile games pioneer at almost 20 per cent below the price at which Rovio went public five and a half years ago, when it debuted with a market … [Read more...]
Investors Are Worried about the Pending Debt Ceiling Battle
In the Financial Times, Kate Duguid, Lauren Fedor, and Colby Smith note that investors are getting worried about the potential pitfalls of the coming debt ceiling battle in Washington, D.C.. They write: The cost of buying insurance against a US government default has shot to its highest level in more than a decade, in an early sign of market concerns about the political impasse in Washington over the debt ceiling. Amid a stalemate between the White House and congressional Republicans on raising the federal borrowing limit, the price of five-year credit default swaps — the most widely … [Read more...]
World’s Richest Woman, LVMH, Hermès and More
If you’re planning on being in Paris anytime soon, like Your Survival Guy is, then pay attention to what’s going on with the protests. There are certainly some no-go zones we’ve highlighted in the past. But considering all the chaos, France’s stock market continues higher driven largely by the surging luxury and cosmetics sectors. Will it continue? More than a third of the market is in four companies in the luxury and cosmetics sector. From the WSJ: Shares in LVMH—the owner of Louis Vuitton, Dior and Tiffany & Co.—jumped to a record in Paris trading, further cementing its position as … [Read more...]
April RAGE Gauge: A Private Spa Not the Public Pool
OK, my latest RAGE Gauge is in, and it’s not pretty. What did you expect me to say? The black swan isn’t gone for the season. Hardly. But, with interest rates you can sink your teeth into, it’s time to get your banking life in order. Look at the yield curve below and see what I’m talking about. Get your lazy cash off the couch. Get it working for you. No more banker’s hours. As you can see, we’re in the midst of a generational opportunity in bonds. As Your Survival Guy, I want you off the bench and in the game. Don’t let crusaders for the “perfect” get in your way. Inertia is a terrible … [Read more...]
Luxury Rally Drives LVMH Onto Top 10 Most Valuable Companies List
A rally in sales of luxury goods has put the world's largest luxury house, LVMH, among the top 10 largest companies, with a market capitalization of $486 billion. Julien Ponthus reports for Bloomberg: LVMH, Europe’s largest company by market value, has now made it to the world’s top 10. A first-quarter sales beat sparked a 5% increase in the share price Thursday, giving the luxury powerhouse a 29% rally for the year. That, along with a gain in the euro against the dollar, lifted LVMH’s market capitalization to $486 billion, briefly ranking it as the world’s 10th-biggest company. Should it … [Read more...]
While America Cuts Out Coal, China Digs Faster
While America continues to weaken its electric grid by shutting down coal power to cut emissions, China is ramping up coal use. Reuters reports: China plans to accelerate the approval of new coal mines and fast track the construction of already approved mines to support its baseload energy supply during demand spikes, Liang Changxin, an official from the National Energy Administration (NEA), said on Wednesday. Peak energy demand is expected to exceed 1.36 billion kilowatts this summer, representing a "significant increase on last year", Liang added. Some provinces could face power cuts … [Read more...]
When Rates Are This High, I Pay Attention
What you’re looking at is a snapshot of the yield curve at certain points in recent history and today. My, how far we’ve come. And hopefully, there’s further to go. But you and I know hope is not a strategy. With that said, if you’re on a fixed income, take a hard look at locking in some of today’s yields well into tomorrow. If you have lazy cash sitting around, sink your teeth into today’s yields. Remember, it was only three short years ago we were looking at a different landscape. Yields were scraping the bottom, like dredging for bay scallops. Now all of a sudden, rates are … [Read more...]