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Investment Research Since 1978

Here’s why Diversification is Vital

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The wildfires currently raging in California have decimated thousands of acres of land, including homes and businesses. Around 100 people are still considered missing. That is simply a catastrophe, and at Young Research & Publishing we thank the first responders trying to stop the blaze, and hope the missing are reunited with their families soon. Possibly to blame for the fires is PG&E, the power utility for much of California. The utility reported a power outage in the area shortly before the outbreak of the fire known as the Camp fire (there are multiple major blazes occurring … [Read more...]

The Digital Currency Trojan Horse

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The IMF is urging central banks to seriously consider digitizing their currencies. There are a number of stated reasons why governments would consider digitizing their money, but the real reason is less obvious. When money is digitized, citizens have no option to cash out their currency. If it all sits on a bank's balance sheet in digital form, governments can easily implement negative interest rates, forcing consumers to spend their money, or risk losing it. Today, depositors have a check on bank and government power over their assets because they can always withdraw their money in hard … [Read more...]

Private Equity’s Secret Sauce May Surprise You

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In recent years pension funds have paid more and more in fees to private equity funds, but it turns out that the returns generated by the funds don't seem to justify the high cost. Bloomberg's Stephen Gandel reports: The returns provide little justification for that. New York City said in its report that its private equity portfolio since inception in the late 1990s had returned about 3 percentage points less a year — 10.3 percent compared with 13.1 percent — than if that money had been invested in public markets. Private equity firms, which often show returns that exceed public markets, say … [Read more...]

Did Apple Raise Prices too Much?

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Lumentum, an Apple supplier, told investors it is cutting its outlook for the second quarter, possibly signalling that Apple's business is taking a hit. Tech investors reacted by pushing Lumentum's stock price down 30%, and Apple's down 4.1%. Is it possible that Apple has raised prices too high for its products, thereby decreasing demand? Ryan Vlastelica reports for Bloomberg: The latest warning sign was Lumentum Holdings Inc. cutting its second-quarter outlook after one of its largest customers asked to “meaningfully reduce shipments” for previously placed orders. Lumentum didn’t name the … [Read more...]

The Problem with Tech Stocks Today

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Writing at Bloomberg, Michael Regan explains that the problems with tech stocks today "can’t be erased by a strong quarter or two." He continues: One is higher interest rates, which raise corporate borrowing costs and boost the appeal of bonds relative to stocks. Another is the Trump-induced trade war, which threatens to reshape global supply chains and make investors rethink internet companies’ overseas ambitions. Low unemployment has added labor market pressure, as exemplified by Amazon.com Inc. increasing its minimum wage. And with every discussion of social media’s role in election … [Read more...]

Amazon Doesn’t Scare FedEx

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With Amazon creating its own network of delivery services around the country, you may think FedEx CEO Fred Smith would be worried, but according to him, he's not. Smith thinks that rather than FedEx being hurt, the Postal Service is more likely to take a hit. Bloomberg reports: FedEx Corp. Chief Executive Officer Fred Smith isn’t sweating Amazon.com Inc.’s move to expand its own delivery network, saying the e-commerce giant is likely to take more business from the post office than the package courier. “Amazon is a good customer. We think they’ll be a bigger customer in years to come if … [Read more...]

Indexing’s Biggest Failure

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Active bond managers are beating their passive peers by protecting portfolios from rising interest rates. Asjylyn Loder reports for The Wall Street Journal: Higher-priced portfolios pieced together by active money managers are handily beating the cheaper index-tracking competition, largely because they are doing a better job protecting their portfolios from rising interest rates. Investors have bulked up on passively managed portfolios since the financial crisis amid a steady drumbeat of evidence showing that most managers can’t beat the market, especially after fees. But fixed-income … [Read more...]

What Apple Doesn’t Want You to See

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Since Apple started reporting unit sales for its products, analysts have been glued to the numbers as a direct measure of Apple Inc.'s health. Now Apple is doing away with that reporting, and no one is happy. Tripp Mickle reports: Apple Inc. AAPL -2.84% reported its fourth consecutive quarter of record revenue and profit, as the combination of higher iPhone prices and strong app-store sales propelled the technology giant to its best year ever. But the world’s most valuable company offered guidance for the current period that disappointed many investors, and said it would stop reporting … [Read more...]

Law & Order coming to Brazil

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Brazil’s president-elect picked Sergio Moro, an anti-corruption judge to be justice minister, a signal the nation will step up its battle against graft, but fueling criticism of the judiciary from opponents. The WSJ reports: The appointment of the widely-respected judge as minister is considered by legal experts to be a stamp of approval for the future government of Mr. Bolsonaro, who swept to victory Sunday with his promise to restore law and order. But the move has also fueled criticism of partisanship in the country’s vast Car Wash corruption investigation that Mr. Moro helped lead, … [Read more...]

The $9,000 Steak Dinner

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The Department of Labor's Fiduciary Rule almost spelled the end for the annuity industry, but with the rule's rollback, Americans can once again look forward to the high fees, pressure sales tactics and poor returns on their money promised by annuities. The Wall Street Journal reports: Lawmakers have panned the product’s high commissions, and Sen. Elizabeth Warren (D., Mass.) has criticized the prizes given to sales agents, like expensive vacations. The estimated average commission received by agents selling certain types of annuities is more than 6%, according to Wink Inc., an industry … [Read more...]