Will last week's $1.8 billion financing of Tesla, a company with no profits, mark the pinnacle of this debt bubble? It's possible. But whether or not this is the peak, it's becoming harder to argue with the evidence of an unstable market in American securities. Bloomberg reports: “That Tesla could come to the market at a little over 5 percent yield for a low-single B rated company, is something of a sign of exuberance,” said Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle, with about $467 billion under management. “Elon Musk is a pretty cool guy but they haven’t figured … [Read more...]
This is why You Should Avoid IPOs
Blue Apron, the meal-kit delivery service, went public earlier this summer. Since the IPO, the stock has cratered. The shares are down 50% in just over two months. At Young Research, we have long advised against participating in IPOs. Don’t forget that for every buyer in the stock market there is a seller and when you are the buyer of an IPO, the seller is often the owner, CEO, and/or founder. If the founding CEO of a business is unloading shares on the public, do you really want to take the other side of that trade? … [Read more...]
Robot Investing Hits the Skids
As soon as an investment strategy becomes too crowded, it begins to lose its edge. It is the lesson that never seems to sink in on Wall Street. There is always a reason why this time will be different. Quant funds and smart-beta ETFs are today’s example. Both have been sold as a panacea to replace investment managers. Who needs humans when you can run a couple of computer screens for low P/E stocks or high momentum shares? Based on the fund flows into these strategies, this is apparently the thinking of many self-proclaimed investment advisors (self-proclaimed because, let’s get serious, do … [Read more...]
FANGs in the Cross Hairs
The FANG stocks have been some of the hottest stocks YTD. As some investors tell it, the FANGs are rising because they are winner take all businesses. There is and will be no viable competition. In other words the investment thesis for the FANG stocks is "this time is different." Here, the WSJ explains that this time isn’t different. Disney is ending its deal with Netflix and starting a new streaming service of its own. CBS signaled earlier this week that it wasn’t going to sign global licensing agreements with Netflix in the future either. Walt Disney Co. just became the biggest … [Read more...]
China’s Most Serious Bubble
Yet another bubble has caught up to China's over-regulated economy, this time it's growing in the domestic asset-management industry. The problem for China's closed economy is that with no way for money to escape, any time the authorities manage to pop a bubble in one area of the economy, another grows somewhere else. Anjani Trivedi writes: Chinese regulators are targeting the latest bubble in their financial system: the domestic asset-management industry. Unfortunately, it is a moving target. The gargantuan industry—a byproduct of China’s trapped and churning capital—has more than doubled … [Read more...]
Will We Survive Artificial Intelligence?
According to The Wall Street Journal's Greg Ip, humans will still have relevance even after the popularization of artificial intelligence. Ip highlights advancements in other technologies that at first glance would have been thought to lower the demand for human labor, but in fact raised it. He calls this the Jevons Paradox, after the British economist William Stanley Jevons, who studied such phenomena. Ip writes: Yet AI is too amorphous a label to actually convey anything useful about what, precisely, it’s supposed to displace. Instead, think of it as a technology that does one thing … [Read more...]
Are you Brave Enough to Bet Against the FANGs?
The FANG stocks are some of the hottest stocks in the market YTD. The Young Research Bubble Basket which includes the FANGs plus Tesla is up 39% in 2017. Here, Bloomberg points out that even though the FANGs are widely recognized as a crowded trade and overpriced segment of the market, short interest is unusually low. When it comes to calling the FANG stocks a bubble, few are willing to put their money where their mouth is. A number of people have pointed out that shares of some of the most dominant technology companies, including Facebook Inc., Apple Inc., Amazon.com Inc., Netflix Inc. … [Read more...]
The Odd Outcomes of Monetary Manipulation
After a years long campaign of managing the value of the franc, Swiss national bankers are wondering what to do with the hoard of assets they have accumulated in their efforts to keep the currency's value low. Today the Swiss National Bank holds over $750 billion in assets, and the Swiss are beginning to ask how this money could be used, and by whom. Monetary policy around the world is in uncharted territory, and sorting out the details will take time. Brian Blackstone writes: Thanks to its efforts to weaken the franc, the Swiss central bank has amassed $750 billion in stocks, bonds … [Read more...]
Are Index Based ETF Investors Making a Mistake?
Barron’s interviewed James Montier of Jeremy Grantham’s GMO over the weekend. Montier is a member of the GMO asset allocation team. Below are the highlights. Barron’s: Bonds are expensive, stocks are expensive. What’s an asset allocator to do? Montier: Things just don’t add up. One group has thrown in the towel and says, “If you can’t beat them, join them. I’m just going passive and be damned.” [Passive investing] is a very strange thing to do at this particular point in time. The U.S. market is at its second or third most expensive point in history. So people are saying, “I either … [Read more...]
Sweden Brings Artificial Intelligence to Banking
Sweden regularly ranks at the top of the most innovative economies list. Bloomberg reports that Sweden’s biggest banks are pioneering artificial intelligence technology. Aida is the perfect employee: always courteous, always learning and, as she says, “always at work, 24/7, 365 days a year.” Aida, of course, is not a person but a virtual customer-service representative that SEB AB, one of Sweden’s biggest banks, is rolling out. The goal is to give the actual humans more time to engage in more complex tasks. After blazing a trail in online and digital banking, Sweden’s financial industry … [Read more...]
- « Previous Page
- 1
- …
- 138
- 139
- 140
- 141
- 142
- …
- 218
- Next Page »