Run your finger along the 5-year treasury line in the chart above, and you immediately get a sense of where we’ve been. As you can see above falling interest rates were a boost to bonds and stocks. This efficient frontier is a combination of bond returns based on the ICE BofAML 7-10 Year U.S. Treasuries Index and stock returns based on the total return of the S&P 500 Index from 1978 to 2023. In the above, you’re looking at the 5-year treasury before the tech bust and then when it hit up to now. The efficient frontier above is from the same time period. This one … [Read more...]
It’s Not “Greedy Business” That Causes Inflation
Joe Biden spent time during his State of the Union address to discuss shrinkflation in grocery stores, pinning the blame for the annoying tactic on greedy corporations eager to trick consumers. At the Ron Paul Institute for Peace and Prosperity, former congressman and presidential candidate, Dr. Ron Paul explains that it's the Fed's money printing that causes inflation, not greedy corporations. Paul writes: President Biden may have recently made history as the first president to discuss snack chips in the State of the Union message. He used snack chips to illustrate the phenomenon of … [Read more...]
Blackwell Superchip: The Key to the Next Stage of AI
Jane Lanhee Lee of Bloomberg reports on why Nvidia believes its new Blackwell Chip is key to the next stage of AI. Lee writes: Nvidia Corp. unveiled its most powerful chip architecture at the annual GPU Technology Conference, dubbed Woodstock for AI by some analysts. Chief Executive Officer Jensen Huang took the stage to show off the new Blackwell computing platform, headlined by the B200 chip, a 208-billion-transistor powerhouse that exceeds the performance of Nvidia’s already class-leading AI accelerators. The chip promises to extend Nvidia’s lead on rivals at a time when major businesses … [Read more...]
Ukraine’s Drone Boat Opening Vital Grain Corridor
James Marson and Oksana Pyrozhok of The Wall Street Journal is report that Ukrainian farmers have sharply increased sales since Russian warships were pushed back by attacks with naval drones. They write: Farmers like Oleksandr Kosenyuk in this central Ukrainian village are ramping up exports of grain thanks to a surprising military success that has subdued the Russian Black Sea Fleet hundreds of miles away. Ukrainian naval drones have sunk a series of Russian warships, putting swaths of the Black Sea all but off limits to the Russian Navy and allowing Ukraine to increase grain exports … [Read more...]
Time to Flee Stocks for Bonds? Your Frontier
How you invest in stocks and bonds, in other words, your asset allocation can mean more to your investment success than what you invest in. Let me explain. When you look at risk/reward as measured by my efficient frontier, you can see by the fish hook how having your eggs in one basket can mean more risk. Obviously, 100% in stocks will be riskier as measured by a portfolio’s ups and downs or standard deviation. But what’s not always clear is that having 100% in bonds can be riskier than a mix of, say, 20% stocks/80% bonds. As you see above, this efficient frontier is a combination of … [Read more...]
Middle Manager Job Cuts Rise More than Thirty Percent
Jo Constantz of Bloomberg reports that among white-collar workers, middle manager job cuts have risen to more than 30% of laid-off employees as companies such as Meta preach a culture of efficiency. She writes: The latest corporate buzzword is efficiency, and that hasn’t been good for much-maligned middle managers. If you’ve got direct reports, you should probably be looking over your shoulder. “It’s always been a joke with my peers that middle management is the most dangerous position to be in,” said Cody Sandell, who lost his job late last year as a director of product management at a … [Read more...]
Cocoa Futures Doubled in Less than Three Months
Ryan Dezember of The Wall Street Journal reports prices for cocoa, the key ingredient in chocolate, have surged to records. He writes: Cocoa prices have climbed past a record set nearly a half-century ago, costing chocolate makers, bakers and aficionados alike. The sharp climb in price for chocolate’s main ingredient started with bad weather in West Africa, where much of the world’s cocoa is grown. Speculators piling into one of the hottest trades outside of artificial intelligence have added fuel to the rally. Cocoa futures rose another $1,105 a metric ton over Thursday and Friday to … [Read more...]
Where Are All the Distressed Office-Building Sales?
Carol Ryan of The Wall Street Journal reports that only 3.5% of offices sold last year came from a distressed seller, thanks to optimism and forgiving lenders. Ryan writes: If offices are in such hot water, where are all the forced sellers? Office-building owners have been under pressure since the Covid-19 pandemic hollowed out their buildings in early 2020. According to data from real-estate consulting firm Colliers, the U.S. vacancy rate has risen from 11% in late 2019 to 17% today, higher than at any point in the 2008 global financial crisis. But forced sales are still … [Read more...]
“And I’ve Never Forgotten,” His Nephew Told Me
You never know when you’re going to pick up a nugget of wisdom. Wisdom that can last a lifetime. In a world loaded with information, wisdom is in short supply. Don’t confuse the two. Your Survival Guy was speaking with a client this week. He’s in his early sixties, and he’s ready to retire in a year or two. We talked about his portfolio, his savings, his 401(k) that he’ll roll over to Fidelity, his asset allocation, and how we’ll transition it when he needs to begin drawing from it. “You know how I feel about asset allocation and the efficient frontier,” I said. “I know you’ve been … [Read more...]
Somali Pirates on the Move Again
The Associated Press reports that the EU maritime force says it is shadowing a Bangladesh-flagged ship seized by pirates off the Somali coast. They write: The 23 crew members of a Bangladesh-flagged cargo ship boarded by pirates off Somalia this week have been taken hostage, and a European Union vessel is tracking the ship as it heads toward the coast, the EU’s maritime security force said Wednesday. The hijacking of the MV Abdullah, first reported Tuesday by the British military, took place nearly 700 miles (1,100 kilometers) east of Somalia’s coastal capital Mogadishu. An EU ship … [Read more...]
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