In the low rate environment that has followed the financial crisis, big institutional investors have looked to alternative investments like private equity to generate returns large enough to fund promised payouts. The problem is, that once a fund gets big enough, the number of options it has for meaningful investment becomes limited. Dick Young explained this phenomenon in his popular post on the Crisis at Vanguard. Now, after plaguing the largest mutual funds for years, the problem of getting too big is hitting private equity funds. Miriam Gottfried reports at The Wall Street Journal: The … [Read more...]
Would You Hire an Advisor to Buy Your Next Car?
Raise your hand if you enjoy the car buying experience? Anybody? The consumer car buying experience is widely regarded as one of the worst there is. The Internet has made things a little bit easier, as you can now do some basic research so you don’t have to walk blindly into the dealership, but the dealer still has the upper hand. If you try to negotiate a price on your trade-in for example, the dealer will budge less on the new car you are trying to buy. If you are leasing, the dealer may give you a good price on the new car and your trade, but he’ll jack up the lease … [Read more...]
Has the Fed Lost Control of Short-term Interest Rates?
Phil Gramm and Thomas R. Saving make the case in The Wall Street Journal that the Fed Funds rate is no longer in the driver's seat of the monetary policy car, and that instead the rate the Fed pays on excess reserves has become much more important. With that rate guided by movements in Treasury markets, the authors wonder if the Fed has lost control of short-term interest rates altogether. They write: The rate the Fed pays on reserves has eclipsed the fed-funds rate as its key monetary tool, with a much more direct influence over the money supply. If the interest rate on reserves is set … [Read more...]
Is Never Ending Stimulus the New Normal?
Many astute market observers maintain the central banks are never going to be able to stop printing money and stimulating. The Fed finished its wind-down of QE in September, but quickly shifted back to a dovish stance in January. The ECB ended its bond buying program in December, but today assured markets more stimulus is on the way. Those market observers predicting never ending stimulus are looking more and more correct. The BOJ, BOE, and Fed all meet this week. Expect more of the same. Paul Gordon and Piotr Skolimowski report for Bloomberg: European Central Bank policy … [Read more...]
Surprise! Even Kids Don’t Like YouTube Kids
If I told you kids don't like to be restricted or fed substandard entertainment, would you be surprised? The answer is obviously no, but somehow Google and tech media seem to be taken aback by kids' preference of the main YouTube app over the walled-garden of YouTube Kids. Bloomberg's Mark Bergen and Lucas Shaw report: In late May, the advocacy group Common Sense Media held a summit on “digital well-being.” Attendees gathered inside the Computer History Museum in Mountain View, California, to debate the long-term effects of apps, services and electronic devices once hailed as revolutionary. … [Read more...]
As Businesses Tie Themselves to Facebook, They Wonder is it an Anchor or Balloon?
Visa, Mastercard, and other businesses are incorporating their operations more and more with Facebook, but with all the media scrutiny and scandal surrounding the social network, is it an anchor that will pull them down, or a balloon that will lift them up? Facebook Inc. gained as much as 2.5%, making it one of the few tech names moving higher in early Friday trading, after reports that it’s making progress toward its cryptocurrency ambitions. A group of payments and other companies, including Visa, Mastercard, PayPal and Uber, agreed to invest about $10 million each in a … [Read more...]
Value Has Never Been Less Valued
Value stocks are trading at their steepest discounts to the market in history. Chris Matthews reports for MarketWatch: That’s according to an analysis by J.P. Morgan’s chief U.S. equity strategist, Dubravko Lakos-Bujas, who wrote in a Thursday note to clients that “value is currently trading at the biggest discount ever, and offers the largest premium over the last 30 years.” Value investing is a strategy whereby investors look for stocks that are underpriced relative to a fundamental analysis of the companies worth, and one that was made famous by Berkshire Hathaway chief executive Warren … [Read more...]
Rise of the Bond Bots
The bond market, complex and illiquid, has always been tough for funds to crack. Now, a group of computer scientists is working on a way to use data and algorithms to do what has so far been unachievable. This all sounds good in theory, but is this just another case of investors being told "this time it's different?" How well will these algorithms hold up during a downturn, when the sample set of data for such an event is so small? Robin Wigglesworth and Laurence Fletcher report for the Financial Times: “This feels like the early days of the ‘quant’ equity industry,” says Paul Kamenski, … [Read more...]
You Can Run but You Can’t Hide from Stock Based Compensation
In the Financial Times, Aswath Damodaran explains why investors should be skeptical of stock based compensation. The use of stock based compensation is growing among public companies, and is especially prolific in the tech industry. Damodaran writes: As an investor, the two words that you should dread the most in a financial statement are “adjusted earnings”, as companies take accounting earnings and tweak them for sundry items. In the process, they almost always turn big losses into smaller ones, and losses into profits. One adjustment that is consistently made to get to adjusted … [Read more...]
Broken News Industry Seeks Federal Protection to Fight Big Tech Abuse
The News Media Alliance (the Alliance) is seeking federal protection in order to avoid antitrust charges while the industry attempts to negotiate terms with big tech. Google and other big tech platforms made many billions of dollars, $4.7 billion in the case of Google alone, on the work of news publishers in 2018 according to the Alliance. Now those publishers want to work out a deal to deliver more of that money to their dying news rooms. Marc Tracy reports for The New York Times: The journalists who create that content deserve a cut of that $4.7 billion, said David Chavern, the president … [Read more...]
- « Previous Page
- 1
- …
- 92
- 93
- 94
- 95
- 96
- …
- 218
- Next Page »