After nine straight days of gains, the S&P 500's info-tech sector index has reached a new record, beating its previous peak set in 2000 just before the dotcom bubble burst. It has taken 17 years for tech investors to get back to zero if they were invested in 2000. Leading the charge have been Apple and Google. Today Apple's market cap is nearing $800 billion, and Google's is nearing the $700 billion threshold. Driving the sector have been a relatively low number of stocks, frequently referred to here on Youngresearch.com as the "Bubble Basket." It hasn't just been the info-tech … [Read more...]
Portfolio Strategy: Looking Past the End of the Bull
The current bull market which started in March of 2009 is now the third longest bull market on record. I’m using the Dow as the yardstick for bull and bear markets. Bear markets are defined as a 20% drop from a prior peak. The fuel that has kept this bull running is of course the most aggressive and prolonged use of monetary stimulus in U.S., and probably world, history. How do stocks perform following historic bull markets? The chart below shows the four longest Dow bull markets on record. The table on the chart shows the subsequent ten year capital gain performance from the day prior to … [Read more...]
Do Millennials Spend their Money Differently Than You?
It turns out, Millennials have some different shopping habits than GenXers or the Baby Boomers. They're very interested in motorcycles and eating out, but not very interested in clothes or cars. … [Read more...]
Are the Bulls Right about Netflix?
Netflix reported second quarter results earlier this week that “blew away” expectations according to many financial news outlets. It wasn’t a beat on earnings, which actually missed expectations, or a beat on revenue which was inline with expectations. Subscriptions are the metric Netflix investors care most about. Netflix's beat on subscriptions pushed the shares up almost 14% for an increase in market value of about $10 billion. The jump in Netflix shares yesterday pulled the shares of the rest of the FANG group higher with it. Young Research’s Bubble Basket is now back near its … [Read more...]
Report Shows Manufacturers Booming: Is This the New Trump Economy?
An index produced by the Association for Manufacturing Technology showed a 22% increase in manufacturing technology orders in May compared to the year before. Manufacturers are expanding their operations and seeking additional capacity. Industrial Distribution reports: Automotive customers made some significant orders in the month, and continued investment from machine shops indicates that manufacturers are seeking additional capacity. The gains in manufacturing technology orders are in line with other positive economic indicators for the manufacturing industry: industrial production, … [Read more...]
Getting to the Tennis Hall of Fame
Want to get to the International Tennis Hall of Fame? Work hard, practice and dedicate your life to the game or visit my office and walk across the street after our meeting. This week is the Dell Technologies Hall of Fame Open. This was yesterday's "shot of the day" at the tournament. … [Read more...]
Does Anyone Actually Want Their Groceries Delivered?
As the markets and the news spin around contemplating the effects of Amazon.com's purchase of Whole Foods, the Blue Apron IPO debacle, and Amazon's intent on entering the meal kit market, the question that must be asked is, does anyone actually want their food delivered? According a report in the WSJ by Heather Haddon and Julie Jargon, the answer for most is, no. Concentrated in cities and surrounding suburbs, grocery delivery is still a small business, accounting for less than 2% of last year’s $715 billion in food-retail sales, according to food-services research and consulting firm … [Read more...]
Three Serious Problems with Using AI for Investing
Here is a must read from the WSJ on the pitfalls of automated investing. James Mackintosh explains the pitfalls of algorithmic trading and the problems with artificial intelligence. He identifies three serious problems with using AI for investment. Ten years ago, computer-driven traders pulled the plug after their algorithms ran amok, leading to billions in losses and the eventual closure of Goldman Sachs ’s flagship quantitative fund. A decade on, artificial intelligence and machine learning are the buzzwords in automated investment. But for all the hype, applying AI to investment has … [Read more...]
Are EnerVest Investors at Risk?
The energy hedge funds of private equity firm EnerVest are said to be worth "essentially nothing" to its investors by the Wall Street Journal. But the firm's senior vice president Ron Whitmire says that's just not true. According to Houston Chronicle reporter Jordan Blum, Whitmire "disputed that assertion, arguing that upcoming asset sales will create the necessary value to pay off much of its debt. That may not alleviate the concerns of investors who have seen their financial bets largely disappear. Whitmire declined to comment on what EnerVest is telling its investors, citing … [Read more...]
Are Low Rental Sales Signaling the End of the Auto Boom?
After plunging during the financial crisis, sales of automobiles had been accelerating right up into December 2016. Since then they've tailed off. And now news of userd car prices coming down and rental firms buying fewer new cars to replace their older models implies things could get worse before they get better. This piece of a Wall Street Journal article by Mike Colias and Adrienne Roberts highlights that rental company CEOs are getting nervous about the auto market. Enterprise, one of the leading car-rental firms, reduced its vehicle purchases in the first half of the year compared … [Read more...]
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