As Amazon grows, and it aims to turn sales into profits, things are changing. Sometimes that means customers aren't always getting what they thought they paid for. One Amazon Prime customer ordered a ladder and a different one arrived... broken. A month later, he was still trying to get a refund. Katherine Bindley explains what's happening in The Wall Street Journal: Mr. Arguello says the seller then told him that to get a refund, Mr. Arguello must destroy the ladder, so no one will get hurt using it. Though it wasn’t a Prime purchase, Amazon intervened after the Journal’s inquiry and … [Read more...]
Walmart, Amazon and the Retail Arms Race
In the race for retail domination, Amazon and Walmart are putting increasing emphasis on the ability of shoppers to get what they want, when and where they want it. In a bid to win the high end digital sales war, Walmart has created a new invite only shopping experience called Jetblack. The service provides wealthy online shoppers with the ability to shop via text message, and to rapidly receive what they have ordered, usually the same day. Sarah Nassauer writes for The Wall Street Journal: Epiphany Davis arrived at work in lower Manhattan on a recent morning, consulted her cellphone and set … [Read more...]
The One Thing Investors Forget Late in A Bull Market
More than ten years into a bull market it’s easy to forget that your investment portfolio (assuming it has been crafted properly) was designed for a full investment cycle. How do you invest for a full-cycle investment cycle? When you invest for the full-cycle, you not only focus on how your portfolio will do when risk sentiment is at a peak, but you also consider how your portfolio will hold up when risk sentiment plunges. There may not be a better reminder of the power of full-cycle investing than the performance of Consumer Staples stocks over the last three decades. The Power of Full … [Read more...]
Are Canadian Banks in Trouble?
Steve Eisman of "The Big Short" fame believes Canadian banks are in trouble thanks to a sagging housing market and slow economy. The FT's Richard Henderson and Lindsay Fortado report: Steve Eisman, a portfolio manager at Neuberger Berman, is among a growing number of short-sellers taking positions in the likes of TD Bank and Royal Bank of Canada, in anticipation that the shares will fall. The moves come after property prices raced ahead of incomes for several years, boosted by loose lending, low interest rates and lax controls on foreign money. But new house prices in Canada slipped year on … [Read more...]
Fed Delivers a Sucker Punch to Retired Investors
The Federal Reserve delivered a sucker punch to retired investors yesterday. The Fed managed to announce an even more dovish decision than Chairman Powell had hinted at in January. Powell took any additional rate increases off the table in 2019 and announced a much faster end to the roll-off of the Fed’s bloated balance sheet than expected. Bonds will stop rolling off the balance sheet in September, with a reduction in the pace of roll-off starting in May. The Fed increased the size of its balance sheet by $3.6 Trillion during the crisis, but it is only taking back about $750 billion of … [Read more...]
Is This a Generational Opportunity in Foreign Stocks?
The chart below shows the ratio of U.S. stocks to developed market foreign stocks. As anybody who takes a proper approach to crafting stock portfolios by diversifying globally can attest, U.S. stocks have carried the load in global equity portfolios for the last decade. But has Wall Street taken this trend too far? As things stand today, the ratio of U.S. stocks to foreign stocks sits nearly three standard deviations above its long-term mean. Assuming a normal distribution, a measure this extreme happens once every century. If global equity performance remains a cyclical business as … [Read more...]
Why the ETF Fee War is Misguided
The WSJ reports today that BlackRock is slashing fees on one of its index ETFs by almost 75%. An investor friendly move? Maybe, but we are talking a reduction from 4 one hundredths of a percent to 1.25 one hundredths of a percent. For every $1,000 invested, ETF holders save a whopping 25 cents. You probably tip the coffee girl more than that every morning. This race to the bottom in index-based ETFs is getting silly. Compound out the difference between 4 basis points and 1.25 basis points for 30 years and you’d barely have enough to take your wife to dinner. And let’s not forget … [Read more...]
Is Amazon’s Brand Power Wide but Shallow?
Amazon has stepped into many industries, not just e-commerce and online services, but actually producing its own line of Amazon branded products. There has been fear among branded consumer products companies that Amazon's efforts would severely hurt their business, but a study shows that might not be the case. Bloomberg's Spencer Soper reports: The explosion of Amazon.com Inc.’s private-label products -- batteries, baby wipes, jeans, tortilla chips, sofas -- has prompted concern that the world’s biggest online retailer could use its clout to promote these house brands at the expense of … [Read more...]
Facebook’s Talent Exodus is a Harbinger of Change, or Trouble
Executives are fleeing Facebook as the company comes under increased fire for privacy and anti-trust issues. Last week Facebook's chief product officer, Chris Cox, and vice president for WhatsApp, Chris Daniels, both departed the company. Facebook has announced changes in the direction of its product, perhaps making departures of personnel who no longer fit the mission inevitable. It could also be that these executives are tired of dealing with Facebook's many troubles and have decided to leave while they can. Bloomberg's Sarah Frier reports: Cox was well-liked internally, known for his … [Read more...]
The Real Reason Firms Buyback Stock
The pols are out trying to punish firms that buy back their own shares. The left wants to ban buybacks unless a company agrees to a litany of their demands. The right wants to put buybacks and dividends on equal footing by taxing buybacks. Neither approach is a good idea. If the government bans buybacks, acquisitions and conglomeration are likely to increase—both have a higher probability of destroying value. The politicians are attacking this from the wrong direction. As we have written in the past, buybacks started to soar in the 1990s after executive pay for public firms became … [Read more...]
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