If you didn’t read about the massive fund controlled by the Mormon Church, you will. With 16,000 plus members tithing 10% of their earnings, the fund has amassed a $100 billion fortune—a cash-generating behemoth that would make Warren Buffett blush. Roger Clarke, the head of the investment fund Ensign Peak that controls the church’s money, used to be a professor at Brigham Young University, reports Ian Lovett and Rachael Levy for the WSJ. He was running an investment firm in Los Angeles when he got the call. “It certainly wasn’t the most attractive financial office,” Mr. Clarke said. “But … [Read more...]
Investor Exuberance Soars
The signs of investor exuberance are too many to list, but here Bloomberg points out soaring option volume as a sign of excessive optimism. The volume of options has soared to levels where the underlying shares each option contract controls are now almost equal to the total shares traded in the market. Bloomberg's Joanna Ossinger reports: A frenzy of bullish bets on the biggest U.S. tech names is captivating Wall Street and powering equities to all-time highs. It’s also sending waves through options markets. Volumes for contracts tied to single stocks have surged by 77% in the past six … [Read more...]
You Must Defend Your Wealth with a Tactical Battle Plan
There’s nothing more important to your investment success than protecting your principal. Capital gains will come and go, but losing the money you worked hard to earn is like taking a direct hit from a Scud missile. You need to build a tactical battle plan to kill the enemy—in this case, risk—and to win. Here’s the battle plan I laid out for readers shortly after Operation Desert Storm, and I remain committed to it today. You’ll Be The Big Winner! General Norman Schwarzkopf built the allied forces military victory in the Middle East on diversity. Schwarzkopf did not go into battle … [Read more...]
RAGE Gauge: Booming Gun Sales Are A Sign of Trump’s Strong Economy
You know I have clients in the gun business. They tell me the last couple of months were record-breakers for their business. Typically booming gun sales are a sign gun control supporters are making another push to ban Americans’ firearms. This time though, it’s a sign that more Americans have jobs and have more money in their pockets to spend on hobbies. The quality of jobs is getting better as well. U6 unemployment, the measure of unemployment that includes temporary and part-time workers, is near all-time lows at 6.9%. If Americans want full-time work, they are having a much easier … [Read more...]
Remembering Bob Marley: Natural Mystic
It’s not every day you get to go to Jamaica. I remember going for Spring Break one year while studying at Babson. When you’re in Jamaica, you hear Bob Marley songs in the wind as if he’s playing somewhere off in the distance. A special surprise at the end of our trip was hearing his songs performed live by his son Ziggy to a huge crowd on the cliffs of Negril. Last week Bob Marley would have turned 75, and in a way, he will always be with us thanks to the reggae sound he created. In an interview with NPR, Ziggy explains that his father kept things light even when they visited him on … [Read more...]
Are Most ESG Funds Just Tech Funds in Disguise?
At The Wall Street Journal, Akane Otani explains the tendency of ESG Funds (funds focused on investing for environmental, social or governance preferences) to invest in certain types of stocks that may not actually be the best match for the mandate they have been given. The end result may be that these funds are just closet tech funds. He writes: Companies focused on issues that the environmental, social and governance movement has come to be associated with, such as renewable energy, clean water, and racial and gender diversity, are relatively underrepresented among such funds. For instance, … [Read more...]
When the Rules Apply to You but Not to Them
Justin Baer reports at The Wall Street Journal that the giant bond investing firm, Pacific Investment Management Co. (Pimco), "was aware employees had used the services of the firm founded by the figure at the center of a sweeping college-admissions scandal but it had “no information” suggesting these workers acted improperly." He writes: Douglas Hodge, a longtime Pimco executive who served as its CEO until 2016, was one of 33 wealthy parents accused this week of paying for bogus entrance-exam scores or fake athletic achievements to get their children admitted into competitive … [Read more...]
The Costs of A Prolonged Period of Low Rates
Bloomberg points out here that a decade of ultra-low interest rates is not helping public pension funds. Low rates increase the projected liabilities of pension plans. Low rates also make retirement much more expensive which drives up savings and helps to dampen the intended impact of providing monetary stimulus in the first place. What will pension funds do if the next big bear market occurs before rates are normalized? A woefully under-reported side effect of perpetually easy money is the impact on the pension industry. We’ve looked at this issue in the past, and unfortunately the news … [Read more...]
A Lesson from Legends: “Don’t Confuse Activity with Achievement”
The Boston Celtics reached yesterday’s NBA trade deadline without making a trade. “Celtics president of basketball operations Danny Ainge keeps a John Wooden book on his desk,” explains the Boston Globe’s Adam Himmelsbach, “and he likes to think back to one of the legendary UCLA coach’s famous quotes when the NBA trade deadline arrives.” Himmelsbach writes: “Don’t confuse activity with achievement,’’ Ainge said. “It might be that the best thing you ever did was stand pat. Red [Auerbach] told me in my first year doing the job, ‘The best trades I ever made were the ones I didn’t make. I held … [Read more...]
Is Uber About to Be Beaten on Price in London?
An Indian car-booking service named Ola is targeting Uber's business in London. The plan is to defeat Uber on price and capture the top market share within a year. Tim Bradshaw reports for the Financial Times: Ola believes it can unseat Uber as London’s top car-booking service within a year, an executive at the Indian company has said, as the two SoftBank-backed companies prepare for battle in one of the world’s toughest transport markets. Bengaluru-based Ola will make its long-awaited debut in London on Monday, six months after obtaining a permit from Transport for London. It is hoping … [Read more...]
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