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Investment Research Since 1978

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Your Social Life During the Pandemic and MORE

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A few thoughts for you as a client/friend tells me life is good. Life hasn’t changed too much in retirement during the pandemic, he tells me. He laughed and commented that according to Clint Eastwood, you know you didn’t have much of a social life if the pandemic didn’t change it much. You read Amazon will stream NFL games. Yippee. What happens when your internet gets overloaded, and you miss the game-winning TD? Cash is king? Not buying it? Good. When was the last time the government created anything of value? I like high-quality short-term bonds mixed in with some high yield junk … [Read more...]

Good Timing? Virgin Galactic Shares Tumble After Chairman Sells Shares

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Does Chamath Palihapitiya have great timing? He sold $213 million in Virgin Galactic shares just before their prices cratered. Bloomberg reports: Palihapitiya, the investor who has helped drive the frenzied growth of blank-check companies, disposed of 6.2 million shares at an average price of $34.32 this week, based on a filing with the U.S. Securities and Exchange Commission. He still owns 15.8 million shares with his partner Ian Osborne through investment firm Social Capital Hedosophia, amounting to about a 6.5% stake. Palihapitiya previously sold shares worth almost $100 million in … [Read more...]

Do You Remember When You Purchased Your First Home?

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Do you remember when you purchased your first home? If you’re old enough, you remember when interest rates were as high as 12 3/4%, as a client friend reminded me yesterday. “I didn’t worry too much about the interest rate because, in relative terms, it was reflected in the price.” The price was always the main driver of value. Still is. What’s always worth remembering, he reminded me, is you can negotiate the terms. But you can’t revisit the purchase price. And if banks aren’t interested in renegotiating the terms, you can do it yourself through the back door by doubling or tripling your … [Read more...]

Which Fossil Fuel Wins in a Shift to Renewables?

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Many countries are moving toward more renewable sources of energy. According to BP, in one of their more optimistic scenarios, renewable energy could supply almost half of the world’s energy by 2050. That is still a long way away, but long-term investors should start thinking about the potential winners and losers now. The losers in a shift to renewables are likely to be fossil fuels. What defines a loser? We are defining it here as a fuel that will lose market share. The biggest loser among fossil fuels is likely to be coal. Oil is also likely to see a significant loss of market … [Read more...]

Richard Young Reports: The Great Money Explosion and Disasters

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You and I know disasters happen. Just because they haven’t happened yet doesn’t mean they won’t. But disasters aren’t accidents. People do dangerous stuff—beginning with getting out of bed. It’s the start of your chaotic day. The world is filled with Chaos. As my father-in-law Dick Young reminds me from time to time, “There’s no such thing as accidents.” I try to explain that to my teenaged kids, though they insist “accidents” happen all the time. When it comes to your money, think about it like you’re hiking with a heavy backpack (I hope!) where you have decisions to make about which … [Read more...]

Fidelity’s 26 Million Retail Accounts in 2020, Up 17%

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Yours truly can attest to Fidelity’s banner year, as business is booming in my neck of the woods. Never before have I opened more accounts for existing and new customers. Who would have thought this would EVER happen in a pandemic year? I certainly did NOT. But as I’ve written to you before, when it comes to investing, you don’t want to be in the PREDICTION business. It never hurts to have a front-row seat, though. “Fidelity’s Retail Investor Accounts Rise 17% to 26 million” reports the WSJ here: Fidelity Investments capped 2020 with record annual operating profit, lifted by strong … [Read more...]

You’re Rich When You Invest Like Croesus

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One of my favorite investment themes is about investing like you don’t need the money. Because THE MARKET doesn’t care about your NEEDS. Time and time again it’s the investor who doesn’t need the market who ends up being as RICH AS CROESUS. I want you to think about your investments as lifetime positions that you don’t need to maintain solvency. Learn, like I do, from the rich and you’ll discover what TRUE investment success feels like. Konrad Putzier discusses Charles Koch and his company's real estate business, writing in The Wall Street Journal: Koch Industries Inc. is emerging as a … [Read more...]

Joel Kotkin: Economic Civil War

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On his blog, Joel Kotkin explains that America is in a form of economic civil war, with the tangible economy of "making, growing, and using real things," in competition with the "incorporeal world of media and digital transactions." Donald Trump, the irascible New York developer, focused on the places where the tangible economy was strong, but President Biden convinced enough voters in heartland states that their economic interests would be taken seriously. Some parts of the Biden agenda—measures to reshore industry, restore supply chains, and improve basic infrastructure—could unify the … [Read more...]

Depositors in Europe Now Being Charged by Banks

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In The Wall Street Journal, Patricia Kowsmann reports that depositors being charged by banks for their business are getting fed up. She writes: Interest rates have been negative in Europe for years. But it took the flood of savings unleashed in the pandemic for banks finally to charge depositors in earnest. Germany’s biggest lenders, Deutsche Bank AG DB -0.04% and Commerzbank AG CRZBY 0.05% , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank … [Read more...]

Teaching A Family Investment: Warren Buffett’s Annual Letter and You

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It’s nice to have some traditions you can count on. One of those is Warren Buffett’s annual letter to shareholders of Berkshire Hathaway, released over the weekend. With all the chaos in the world, it’s nice to have stability when you can find it. I read the report Sunday morning before Becky and I met my parents for lunch at a favorite spot in Tiverton, RI. My Mom and I ordered the fresh cod with littlenecks and linguica. My Dad commented that he had the same dish Friday with his friend at another restaurant in New Bedford. If you’ve ever read the history of how Berkshire Hathaway got … [Read more...]