The WSJ has a must read on how a new generation of investor is getting investment advice. Youtube channels and discord groups run by folk with no formal background or knowledge of investing have apparently taken the place of licensed professionals . What could go wrong? Below are some of the highlights, but the full article is well worth your time. This is the belief system and behavior we start to see near market tops. An entire generation of young investors doesn't know what a bear market looks like. Sadly prudence and skepticism have gone out of favor. You can read the entire article … [Read more...]
IT’S A GAMBLE: First Bitcoin ETF Will Be Loaded with Risk
Fund companies are racing hard to be the first to offer a bitcoin ETF. The Wall Street Journal's Michael Wursthorn reports on the risks of such funds, writing: Despite the additional safeguards, investors in such funds would have to deal with issues associated with trading futures, as well as the risks around cryptocurrencies. Todd Rosenbluth, head of ETF and mutual-fund research at CFRA, warned that futures-based ETFs rarely replicate the performance of the underlying market they track. The reason is pricing fluctuations between futures contracts and the spot market, especially if demand … [Read more...]
World’s Largest Chip Maker is Raising Prices 20%
Inflation is transitory according to the Fed. Powell and company tell us it is supply constraints that are boosting prices. While this may be true to some extent, excess demand from trillions being dumped on consumers by governments and pumped into the financial system by central banks is also having an impact and potentially a more lasting impact. The WSJ reports today that Taiwan Semiconductor is raising prices on its most basic chips by up to 20% and 10% for its more advanced chips. Taiwan semi is the world's largest chip maker. You can be sure others will follow suit. With demand as … [Read more...]
TRAFFIC JAM: Shipping Clogged at Major Ports
Shipping is clogged at many major American ports as corporations buy ahead to beat inflation and high holiday demand. Paul Berger reports in The Wall Street Journal: Container ships are stacking up again off Southern California’s jammed ports, as a flood of imports and logjams in domestic logistics networks hit operations at the biggest U.S. gateway for seaborne trade. Thirty-seven container ships were anchored off the adjacent ports of Los Angeles and Long Beach in recent days, according to the Marine Exchange of Southern California, the highest number since February, when 40 ships waited … [Read more...]
An Inebriated Stock Market
If you are still scratching your head as to how a near bankrupt movie theater company (AMC) and video game store (GameStop) can still be trading at levels that are many multiples of their true value or how a handful of technology stocks can be priced as if they can perpetually grow at 20% per year or how investors could push the valuation of the stock market to within a whisker of its dotcom high, despite witnessing the subsequent collapse, MagnifyMoney may have the answer. According to a MagnifyMoney survey, 32% of investors admit to trading drunk and 59% of Gen Z investors admit to buying … [Read more...]
ETF Investing: Avoid the Madness of Crowds
Look at the huge money flowing into all the same stuff. This isn’t rocket science. At some point, when the fuel runneth dry—down, down, down they shall fall. Action Line: Prepare your portfolio now to avoid the madness of crowds. In The Wall Street Journal, Michael Wursthorn reports on the massive amount of money flowing into ETFs. He writes: Investors poured $705 billion into exchange-traded funds through the first seven months of the year, pushing 2021’s world-wide tally to a record $9.1 trillion, according to data from Morningstar Inc. Net flows so far this year have nearly … [Read more...]
Will Fed Tapering Lead to Higher or Lower Bond Yields?
James Mackintosh, writing in the WSJ, outlines two possible outcomes for financial markets when the Fed decides to taper its bond buying program. While it would seem logical that pulling back on a massive $1.4 trillion annual bond buying program should push bond yields higher, there is no guarantee. If investors view the Fed's tapering decision as a sign of tighter monetary policy, it is possible yields will not rise much. We would still lean toward the former scenario playing out as we struggle to see what economic buyer would want to step in to fill a $1.4 trillion void left by the Fed at … [Read more...]
PREPARE: Are You Familiar with Power of Attorney?
A power of attorney for a loved one is something you need to have in place ahead of any possible necessity. It should be as much a part of your preparations as storing water or preparing for a wildfire. Christine Fletcher explains some power of attorney clauses you should understand, writing: Many people have signed at least one power of attorney in their life. A power of attorney, which names a trusted family member, friend or advisor as your “attorney-in-fact” to control your assets, is meant to be used if you are incapacitated. For instance, if you have been in a car accident or are in a … [Read more...]
Is Biden Turning the U.S. into Europe?
Writing in the WSJ, Josef Joffe explains how Biden is seeking to reshape government's role in the economy. Emphasis is ours. President Biden’s tax plans might soon make Europe look like a capitalist heaven by comparison. He wants to raise the long-term capital-gains tax from just below 24% to above 43%. Switzerland has no such tax. In Britain, inventor of the welfare state, it is 20% and in Germany 26%. On income tax, the U.S. may soon top the scale. Mr. Biden wants a top marginal income-tax rate of just below 40%. Add state and local income taxes, like California’s 13.3% for top earners, and … [Read more...]
Your Survival Guy: Fast, Furious End to Fiefdoms
You live in a world where you don’t know who to trust. Look at the disaster in Afghanistan where common sense tells us we should not be there. This truism was known by you and me years ago. It would be a boondoggle. And yet, here we are. You have Navy SEAL boots on the ground, with real-time intelligence telling us the end of the Afghan war will be a disaster because we lost the hearts and soul of Afghanistan a long time ago—if we ever had them. You have the Deep State lying to your face, saying the intelligence agencies never predicted this. Sure. And you have Biden left hanging in the … [Read more...]
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