A glut of grain crops around the world has depressed prices for wheat, corn, and oats among others. The crops have seen five years of strong yields, filling storage facilities and driving prices way down. Jacob Bunge and Jesse Newman report that grain processors are about to get hit by the big oversupply. Farmers are opting to store grain rather than sell it to grain companies at low prices. Some food companies, meanwhile, are placing fewer long-term orders for grain and ingredients since prices are expected to stay cheap. As low prices persist, the situation grows more difficult for the … [Read more...]
The Truth Behind the S&P 500, Part III
“Welcome aboard!” For some reason, maybe it’s because of all the cruise ships that have visited Newport this Fall, I’m thinking about the S&P 500 as this huge cruise ship. Imagine the guests are common stocks, and to go ashore everyone is assigned to a small water taxi based on their size, or market-cap. The biggest companies, are in one water taxi. It barely floats from all their weight. Imagine that sinking water taxi, with its bow barely above water, steaming to shore with its five biggest guests: Facebook, Amazon, Apple, Google, and Microsoft. That water taxi is followed by the … [Read more...]
Meet your New Fed Chairman
President Trump is expected to nominate Jerome Powell to replace Janet Yellen as Chairman of the Federal Reserve today. Powell is a current member of the Federal Reserve Board of Governors. He was appointed by Obama in 2012 and has kept a low profile. His speeches on monetary policy have hued closely to the company line. All indications are that Powell is a go-along to get-along member of the board. The Street views Powell as a continuity pick who is lighter on regulation than Yellen. Powell is not an academic nor does he have a PhD in economics. A welcome change after suffering through the … [Read more...]
Tesla’s Worst Financial Quarter Ever
Tesla marked up its worst financial quarter ever at the end of September. With losses mounting, Tesla must speed up its deliveries of Model 3s or see investor confidence fade. Tim Higgins writes: The Silicon Valley auto maker had aimed to make 5,000 Model 3 sedans a week by the end of this year but said it won’t reach the milestone until late in the first quarter of next year. Tesla also reported its worst financial quarter ever, posting a loss of $619 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a rare profit of $22 million a year … [Read more...]
Is Oil Finally Turning the Corner?
After extensive efforts by OPEC to rein in world oil production, it appears the plan may finally be working to raise estimates of future oil prices. Georgi Kantchev reports that analysts are raising their estimates of the future price of oil. He writes: A poll of 14 investment banks surveyed by The Wall Street Journal at the end of October predicted that Brent crude, the international benchmark, will average $54 a barrel next year, up $1 from the September survey. The banks expect West Texas Intermediate, the U.S. oil gauge, to average $51 a barrel in 2018, also up a dollar from the previous … [Read more...]
Do You Know Dick Young’s Investment North Star?
As more money piles into stocks, there’s never been a better time to get acquainted with Dick Young’s investment North Star, the Treasury bill. Backed by the full-faith credit pledge of the United States government, the T-bill is your risk-free rate of return. To see the chart, click here, and roll your finger, left to right, from the mid-80s to today. Do you see a problem with today’s investment environment? It’s a lot different from when Dick Young began writing to you, as I explain when you click on the chart link above. Originally posted at Yoursurvivalguy.com. … [Read more...]
The Electrification of the Auto Fleet is Bullish for this Metal
The shift toward electric vehicles (EVs) promises to have a profound impact on the commodities landscape. Here the FT reports that nickel is likely to be one of the winners from the move to EVs. Nickel is likely to take centre stage at LME Week, analysts say. The metal is already emerging as one of the favoured ways to play the EV supply chain, as some of the largest battery makers shift towards models that use more nickel to increase the amount of power they can store, thereby boosting a vehicle’s range. Analysts at consultancy Wood Mackenzie estimate that nickel demand in EV batteries … [Read more...]
Will J.C. Penney Be the Next Legendary Retailer to Fall?
Shares of J.C. Penney are plunging as investors have gotten scared about the company's profit potential. The company's CEO, Marvin Ellison tried to reassure shareholders by explaining inventory decisions to them, but it didn't seem to have much of an effect. Is it possible J.C. Penney will be the next storied retailer to go by the wayside? Cara Lombardo reports: Penney’s profit was also hurt by increased sales of appliances, which carry lower margins than the apparel and other goods it sells. Penney said that despite the near-term profit shortfall, its inventory decision was right for the … [Read more...]
Would you invest 30% of your assets in Bitcoin?
Famed Value Investor Bill Miller is making news again by putting up to 30% of his fund’s assets in Bitcoin. Value Investor seems like the wrong label for a manager holding 30% of his fund’s asset in a speculative “currency.” Jason Zweig reports: In the letter [to shareholders], Mr. Miller pointed out that a “Murderers’ Row” of revered investors have been declaring that bitcoin is overpriced or a “bubble,” including Berkshire Hathaway Inc.’s Warren Buffett, James Dimon of J.P. Morgan Chase & Co. and Laurence Fink of BlackRock Inc., Bridgewater Associates’ Ray Dalio and Howard Marks of … [Read more...]
3M: From Scotch Tape to SmartPhones
3M has always been known for its great consumer brands like Scotch Tape and Post-It Notes, but behind those everyday brands have always been innovative products that end up as parts in other manufacturers' products. Today 3M is innovating technologies that are essential to smart phones and electric vehicles. Austen Hufford reports: The company also highlighted its car business, saying its traffic safety and automotive electrification units complemented each other, leading to higher sales, lower costs and increased foresight on future car trends. The company makes electric car displays, … [Read more...]
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