Investing in commodities can be a profitable endeavor, but unlike the stock market where a passive investment in a broad-based index can yield average results, passive investment in a broad-based commodities index suffers from many problems. The Wall Street Journal highlights some of the challenges passive commodities investors face. If you are going to invest in commodities, stick with an active approach. Commodity indexes haven’t provided that same kind of “significant persistent level of return over time,” says Amanda Agati, an investment strategist at PNC Institutional Asset Management in … [Read more...]
A Basket-Case of Stocks
Only a handful of stocks, the 10 largest, are responsible for 53% of the S&P 500’s 4.7% advance this year according to Fundstrat Global Advisors. You know the names. But these three stand out the most as The WSJ’s Chris Dieterich writes, "Technology-oriented companies dominate the list: Apple AAPL 0.55% Inc., the world’s largest company by market capitalization, is up more than 22% this year through Monday. Social-media company Facebook Inc. FB 1.46% has risen nearly 23% while e-commerce powerhouse Amazon.com Inc.AMZN 1.96% has climbed 20%.” It’s a perpetual-cycle. As money flows into … [Read more...]
Bubble Stocks Dominate the First Quarter
Stocks overall had a strong first quarter, with the S&P 500 gaining 6%, but it is the FANG stocks and shares of similar companies that performed best over the last three months. In the chart below we show the YTD performance of the NYSE composite index relative to the Young Research Bubble Basket. Our bubble basket is an equally weighted index of Facebook, Amazon, Apple, Netflix, Google, and Tesla. The bubble basket is up over 22% YTD compared to a 4% gain in the NYSE composite. Raging bullish sentiment among the investing public and compelling stories from many of these firms are no … [Read more...]
Facebook Fatigue: Tired Network Attempting Pivot to Video
Revenue growth is decelerating at Facebook. The company has saturated most developed markets, and to continue increasing its active user base, the social network must push further into low-income regions with fewer dollars for advertising. To stem the tide, Facebook wants to forge into the already crowded video business in an attempt to steal ad dollars from TV and YouTube!. Miriam Gottfried reports at The Wall Street Journal: The trend explains why the company, with its shares fetching a still-rich 32 times 2017 earnings estimates, is pushing aggressively into video as the next frontier. … [Read more...]
How to Invest in an Age of Compromised and Biased Information
In investment management where you spend much of your time reading, gathering and analyzing information. The trustworthiness and reliability of news and information is vital to your success. The same is true for all investors. You need reliable and trustworthy information to make informed investment decisions. The ugly reality is that it is getting harder and harder to find sources you can trust. The decline of print media has eroded the quality of many of the best print publications. The Wall Street Journal announced earlier this month that due to an accelerating industrywide decline in … [Read more...]
Google, Facebook and Amazon: The New Media Companies
If you have watched markets long enough, you have seen cycles of vertical integration and decomposition occurring in companies competing in changing markets. Today this is happening once again. As AT&T and Verizon are snapping up content creation companies, Google and Facebook are busy developing their own information networks. Wired explains to readers how the media landscape is changing fast. TELECOMMUNICATIONS COMPANIES ARE becoming media companies. That explains AT&T’s agreement to buy Time Warner for $85.4 billion. But something else explains it, too. Media companies are … [Read more...]
Worthy Reads: Why Older People Love Facebook
Why Older People Love Facebook (NYTimes) 78 Million American Pay No Income Tax (MarketWatch) Wind Energy Economics Improving (Washington Post) Seniors the Fastest Growing Demographic on Social Media (NPR) Soda Consumption Falling at Restaurants (Washington Post) Rousseff Out in Brazil (WSJ) Junk Bonds: Handle with Care (WSJ) More on Helicopter Money (Fortune) … [Read more...]
Facebook Un-Liked by Wall Street
We have warned readers on this website and in our premium strategy reports, Richard C. Young’s Intelligence Report and Young Research’s Global Investment Strategy to avoid Facebook shares. After the company’s first earnings report was released yesterday, those warning were proved prescient. A Reuters report on the release by Alexei Oreskovic and Gerry Shih illustrates the drastic overvaluation that the IPO market attached to Facebook shares. Facebook Inc reported a drastic slowdown in revenue growth and failed to offer financial forecasts to quell fears about its ability to boost advertising … [Read more...]
Facebook’s Fatal Flaw Exposed
Has he gone mad? Mark Zuckerberg, Facebook’s CEO announced this week that his social networking company is buying Instagram. Facebook is paying $1 billion—a 100% premium to the company’s valuation only one week ago. Instagram is the creator of the identically named photo sharing / editing app for Apple and Android mobile devices.. Instagram was founded by two twenty-something Stanford grads about 18 months ago. The company only has about a dozen employees and by all accounts it generates almost no revenue. I am no Instagram expert. I didn’t even know the company existed until this week. But … [Read more...]
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