The retail sector is getting hammered by changing tastes and competition from a trend toward e-commerce that doesn't appear to be slowing down. Now Sears Holdings, which controls Sears and Kmart stores, is flashing the warning signals about a possible bankruptcy. Anne Steele writes at The Wall Street Journal that Sears says it's "probable" that the company can mitigate its problems with "cost cuts, asset sales and other actions." The warning—the first such for the company—is the latest stumbling block for Sears, whose stock had dropped 39% in the 12 months through Tuesday. The shares fell 12% … [Read more...]
As Apple Moves In, Is it a New Day for India’s Economy?
For the first time, Apple will be producing iPhones in India in the next month or so. Apple will be working with the Taiwanese manufacturing firm Wistron to build iPhones in Bangalore. Rajesh Roy and Newley Purnell report that Apple is looking for Indian production to lower the cost enough to make iPhones affordable for Indian consumers who have so far been cool on the phones. Apple will also avoid Indian import tariffs by producing locally. With sales cooling in China, long an engine for Apple’s growth, manufacturing iPhones locally would help Apple address what analysts say is its biggest … [Read more...]
Should you Buy Solar Panels?
The cost of photovoltaic solar has dropped by over 80% since 2008. Is solar now cost effective for you? Google’s Project Sunroof can help you decide. Project Sunroof has built 3-D models of rooftops in all 50 states, looked at the trees around people’s homes, considered local weather, and figured out how much energy each house or building can generate if its owners buy solar panels. Google has found that nearly 80% of all buildings it has modeled are viable for solar panels. You can see what google has to say about solar for you by entering your address on its Project Sunroof … [Read more...]
Are Investors Sick and Tired of Buybacks?
Over the last few years of bull market excess, companies have been spending less on capital, and more on buying back stock. But Justin Lahart reports that non-financial companies are slowing down their stock buybacks and doing more capital spending compared to their cash flows. But the data also suggest a shift is underway. In the fourth quarter, nonfinancial companies bought back a net $323 billion in equities, at a seasonally adjusted annual rate, half as much as in the previous quarter and the lowest amount since the second quarter of 2014. And unlike the third quarter, companies’ … [Read more...]
Vance Returns to Ohio to Create New VC Opportunities
You may recognize the name J.D. Vance from his bestselling book Hillbilly Elegy which I wrote about in the "Trump’s Great White Wall" series (Read Parts I, II, III, and IV). In the book you see how he made himself into a success. Vance worked for Peter Thiel’s Mithril Capital and is now moving back home, according to this WSJ article, to work for Steve Case’s (founder of AOL) investment funds Revolution LLC. to bring venture capital to the Ohio area. “A lot of problems I write about are not entirely economic,” said Mr. Vance, 32 years old. “But a lot of these areas have been left behind and … [Read more...]
A Big New Push for Solar Power in America
Renewables Now reports that German solar power inverter compnay, SMA Solar Technology, will be hiring a "massive" number of Americans for its push into the U.S. market, which its CEO Pierre-Pascal Urbon calls "extremely attractive." The company announced Thursday it has named Charles Ellis vice president of distributed sales, and Andrew Mears vice president of strategic sales. It did not give specific figures as regards to its recruitment plans, but said several positions will be created to support the sales group. Target regions such as California and the Northeast will see significant … [Read more...]
America’s Looming Debt Problem Could Derail it All
Over the last eight years, the federal government has been on an unprecedented spending spree. Since year-end 2007, federal debt outstanding has increased by more than $10 trillion—a number so large it is hard to even wrap your mind around. But let’s try. According to the Census Bureau there are almost 125.8 million households in the United States. The $10 trillion increase in federal debt equates to almost $80,000 per household. Do you and your family feel like you’ve gotten $80,000 worth of value from the government over the last eight years? For $10 Trillion, the U.S. government … [Read more...]
Can You Trust a Robo-Advisor with Your Money?
Yesterday the S&P 500 dropped by over 29 points (about 1.2%), the largest single day decline so far in 2017. Meanwhile, Olivia Oran explains at Reuters that Goldman Sachs is preparing to put people's life savings in the hands of a computer. Are investors going to rely on this advice when stocks crash? Will they put their financial survival in the hands of an algorithm? We shall see. Goldman isn't alone. Oran writes: Goldman has for years grappled with how to tap into the mass affluent segment, broadly defined as those with less than $1 million in investable assets, without diluting the … [Read more...]
A Warning Sign from the Transport Sector?
Margins are falling in the transportation sector. FedEx miscalculated holiday demand by a long shot, and UPS and FedEx are barely treading water when it comes to keeping up with rapid increases in the demand for e-commerce. Paul Ziobro writes for The Wall Street Journal: Both FedEx and rival United Parcel Service Inc. are struggling to keep pace with the dramatic growth of e-commerce. While more people doing their shopping online is bringing added volume into their networks, both are spending heavily to build out package-sorting centers and automating facilities to handle the extra deliveries … [Read more...]
This Is Why Analysts Are Insincere on Quarterly Earnings Calls
Anybody who has wasted an hour of his life listening to a quarterly earnings conference call will appreciate the piece below from Jason Zweig. Quarterly earnings conference calls are obnoxious. First the management teams regurgitate the press release they just issued to analysts as if the analysts couldn’t read. Then, the analysts get a turn to ask questions. But before each question is asked analysts suck up to management with praise on their astute stewardship for beating quarterly earnings guidance. Guidance that in most cases have been lowered over the course of the prior three … [Read more...]
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