FOMO: the fear of missing out. Never let emotions drive your investment bus. Despite this sage advice, that's exactly what many investors are doing, reports Amrith Ramkumar at The Wall Street Journal. He writes: Investors are putting more money into U.S. stocks as 2019’s rebound continues, a shift that some analysts expect to drive markets higher despite the recent rally in government bonds and an expected slowdown in economic growth. Optimism about trade talks and the Federal Reserve’s signaled halt to interest-rate increases propelled the S&P 500 to its best quarter since September … [Read more...]
The Arithmetic of Losses: A 68% drop this Century
In his April 2000 issue of Dow Theory Letters, the late-great Richard Russell wrote about the arithmetic of losses noting that Nasdaq had dropped about 68% from the previous year’s peak. To get back to even, he noted, Nasdaq would have to climb more than 170%. As many of you know that didn’t happen for a long-long time. “Note that CNBC,” explains Russell, “and many other sources continue to talk about a stock’s climb in percentages. But this can be misleading and frustrating. Example: you buy a stock for $50. In the bear market it drops to $2—you’ve lost $48 plus commissions. Then you … [Read more...]
How Many “Retirees” Will Keep Working?: Half Haven’t Saved a Thing
An incredible 48% of Americans aged 55 and older haven't saved a thing for retirement. I've asked the question "How Many “Retirees” Will Keep Working?" and it appears that the answer is, a lot. Despite this disturbing proportion of Americans who haven't saved a bit, the numbers are actually getting better. In 2013 the percent of older Americans who hadn't saved anything was 52%. Bloomberg's Ben Steverman writes: Two in five of such households did have access to a traditional pension, also known as a defined benefit plan. However, 29 percent of older Americans had neither a pension nor any … [Read more...]
Is a Four-year College Degree Really the Best Plan in Today’s America?
Millennials are burdened with student loans they can't repay, college degrees that don't get them jobs, and no clear path forward. Is a four year college degree really the best plan for America's high school graduates today? The former host of Dirty Jobs, Mike Rowe thinks not. He has started the Mike Rowe Works Foundation to "make work cool again." Here's a little about what Rowe is doing: America has become slowly but undeniably disconnected from the most fundamental elements of civilization—food, energy, education, and the very nature of work itself. Over the last 30 years, America has … [Read more...]
Bad Blood
If you want an inside look into how money is lost then read Bad Blood by John Carreyrou. It reads like fiction about blood testing start-up Theranos and its founder Elizabeth Holmes where high profile billionaires and investors with “access” lose every penny invested. Read extended excerpt from Wired here: ALAN BEAM WAS sitting in his office reviewing lab reports when Theranos CEO and founder Elizabeth Holmes poked her head in and asked him to follow her. She wanted to show him something. They stepped outside the lab into an area of open office space where other employees had gathered. At … [Read more...]
Can Private Equity Really Save Sinking Pension Funds?
In The Wall Street Journal, Jason Zweig tells the story of Calpers, the nation's largest pension fund, and the nation's growing investments in private equity. Like Calpers, many pensions are hoping to meet unrealistic return expectations (something I have written about many times, including here, here, here, and here) by investing in private equity. The problem is, it isn't a sure bet that private equity will be able to produce the returns necessary. Zweig writes: Still, the future for private equity might not be as lucrative as the past, with money gushing in and with buyouts priced near … [Read more...]
Here’s How States Can Double Their Manufacturing Job Growth
In an analysis of new data published by the U.S. Labor Department, the National Right to Work Committee found that states with Right to Work laws had a manufacturing job growth advantage of 2:1 compared to forced unionism states. NRTWC writes: Last week, the U.S. Labor Department issued updated and revised annual data for payroll manufacturing employment in each of the 50 states. The newly-published figures for 2018 show that 6.76 million manufacturing jobs — or 53% of all factory jobs across the U.S. — are located in the 27 states that have passed and implemented Right to Work laws … [Read more...]
Welcome to Florida
In response to reports of the sagging luxury real estate market in Manhattan, blaming the capping of the State and Local Tax deduction for the drop in demand, Senator Rick Scott of Florida has written an op-ed in the Wall Street Journal explaining exactly why New Yorkers are fleeing to low tax Florida. He writes: A recent article in a Beltway publication warned about a potential recession and considered how it might affect President Trump’s chances at re-election. The story began—no joke: “The luxury real estate market in Manhattan is sagging.” It goes on to argue that softening in the … [Read more...]
The Benefits of Billionaires
In a new post, my friend Chris Edwards of the Cato Institute lays out why billionaires, despite being constantly bashed, are actually benefiting America. He writes: Are rich people idle “rentiers,” as economist Thomas Piketty calls them, who inherit wealth and add no social value? In supporting Sen. Bernie Sanders’ plan for higher estate taxes, former Labor Secretary Robert Reich claimed that “America is creating a new aristocracy of the non-working super rich.” And in plugging Sen. Elizabeth Warren’s wealth tax, Paul Krugman said “we seem to be heading toward a society dominated by vast, … [Read more...]
Can IBM Revolutionize Foreign Exchange with Blockchain?
IBM has rolled out a new service called IBM Blockchain World Wire that hopes to optimize and accelerate foreign currency exchange. Rachel Wolfson reports on the new service at Forbes, writing: IBM is paving the way for banks and other regulated financial institutions to join the blockchain revolution. Rather than going through a series of intermediaries when sending money across borders, IBM has created a real-time, global payments network to support cross-border transactions and foreign exchange in more than 50 countries using digital assets, also known as cryptocurrencies or “stable … [Read more...]
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