All is not lost in a downward moving market, especially as interest rates rise. One way to think about your portfolio is to look at it over a period of, say, 15 years. What’s your 15-year plan? Can you survive another three years like this one? How about the last three years? They weren’t too bad. Thinking over a 15-year period might not be as hard as you think. The last 15 included a real bruising time during the financial crisis (I hope you didn’t sell). Prices go up, and prices go down—dividends and interest rates do too, especially in times like these, and that’s a good thing. Today … [Read more...]
Will ESG Do to Steel Prices What It Did to Gas Prices?
Are efforts to meet seemingly arbitrary "green" goals going to cripple the world's steel industry in the face of growing demand? The industry has worked hard to expand, but faces its assets being regulated out of operation to achieve green goals. Sylvia Pfeifer reports in the Financial Times: The global steel industry may have to write down as much as $518bn in assets over the coming years because it is still building traditional blast furnaces despite countries seeking to reduce their carbon emissions, according to a report. Countries have continued to announce new coal-based plants while … [Read more...]
Kellogg Cuts Loose with Split Plan
Kellogg has announced a plan to split into three businesses. The largest leftover business will be made up of the company's snack business, which produces 80% of the revenues for the company in its current configuration. The company will split off its cereal business and its plant-based-foods unit into separate companies. Annie Gasparro reports for The Wall Street Journal: Kellogg Co. said it plans to break up its business into three companies, seeking to jump-start its larger, faster-growing snacks business while helping its namesake cereal brands regain their footing on supermarket … [Read more...]
Apple Shares Resilient in the Face of Recession
Shares of Apple, Inc. have fared better than those of other tech companies in recent months as the prospect of recession rears its head. Dan Gallagher reports in The Wall Street Journal: The “new” Apple isn’t really new. But it is new enough that the 46-year-old company’s modern incarnation has yet to see its resilience truly tested by a global recession. Investors currently aren’t baking one in. Apple’s share price has indeed taken a hard hit over the past few months, along with the rest of the tech sector. But it has still outperformed the Nasdaq and most of its tech peers this year, and … [Read more...]
MONEY TALKS: The Best Service in Paris
OK, Your Survival Guy just got back from a two- and half-week research trip in Paris. The six-hour head start in Paris-time compared to the east coast gave me plenty of time to gather my thoughts over a café crème and croissant. In a word, Paris is busy. But it’s not too crazy yet with the demanding Chinese customer still in lockdown. It feels like a soft open. Staffing shortages are rampant while customer demands are as high as ever, understandably acting like they’ve been locked up for a couple of years. But it’s all relative. Because when you spend nine of your nights on the right bank, … [Read more...]
Predictions of MEGA-SPENDING on Metaverse
McKinsey & Co. has predicted mega-spending on the metaverse of $5 trillion by 2030. Ann-Marie Alcantara and Patrick Coffee report in The Wall Street Journal: Businesses’ and consumers’ annual global spending related to the metaverse could reach $5 trillion by 2030, according to a new report from consulting firm McKinsey & Co. E-commerce in the metaverse will comprise some $2 trillion to $2.6 trillion of the total, while virtual advertising endeavors will make up another $144 billion to $206 billion, McKinsey said. By comparison, spending around artificial intelligence totaled … [Read more...]
RECESSION? Dow 25,000, $8 Gas, Rising Interest Rates, Spell Mid-term Crack Up
When you spend a lifetime working and saving where hours turn into days, weeks, months, and years; you probably have something to show for it. Days do feel like years in times like these. Time stands still. But not all is lost especially if you’re with me. Imagine my headline as we round the corner into the midterm elections. Who’s to blame for that? Who did that? Look, I’m Your Survival Guy. I’m Your Rich Man Poor Man and a Prudent Man to boot. I know from experience the pain of falling markets is much worse than the comfort of rising ones. That’s why I write to you daily about focusing on … [Read more...]
Investing During a Recession
Many new investors haven't experienced a recession during their investing years, and so may need some guidance as to what to expect. Elizabeth O'Brien reports on investing in a recession in Barron's: It can be hard to sit on your hands amid market volatility, so if you feel the need to do something, consider making a stock wish list, Stovall said. Income-focused retirees should think more like landlords than traders, he said. In other words, you want to own companies that can pay the rent (dividends, in this analogy) on time and can weather increases in rent. Dividend payers that CFRA … [Read more...]
Will the Fed Stick to Its Course?
After decades of low-interest rates, inflation has finally caught up to the Fed. America never should have been in this position. Everyone knew that pulling demand from the future with low rates would eventually catch up to the Fed, but no one seemed to worry about that. The value of the dollar has been regularly falling since America came off the gold standard, and in the 21st Century, it's been continuing that trend. But during the Biden era, the rate of dollar value destruction has accelerated. Now the Fed has a chance to make it right, or at least clean up some of the mess they … [Read more...]
Swiss National Bank Surprises World with Rate Hike
The Swiss National Bank hasn't raised the country's interest rates since 2007, but today the bank surprised the world with a rate increase. Sam Jones and Tommy Stubbington report for the Financial Times: Switzerland’s central bank on Thursday raised interest rates for the first time in 15 years, as it became the latest rate-setter to shift away from ultra-loose monetary policy. The Swiss National Bank said its benchmark rate would rise by 50 basis points from minus 0.75 per cent to minus 0.25 per cent, catching markets off guard. The Swiss franc surged following the surprise decision, … [Read more...]