As a valuation-based contrarian investor, it is relatively easy for me to make a strong case against allocating investment dollars to money-losing tech IPOs that pay out stock compensation equal to 20% or 30% of revenue to boost their “adjusted EBITDA” and GAAP free cash flow metrics and trade for 15 or 20 times that revenue. Simply put, the growth required for a company to “grow into” a 20 times revenue multiple, or a 100 P/E multiple, is so enormous that 90%+ of all businesses will never get there. Of course, there are some that will and investing in those stocks can be very rewarding. Josh Brown, CEO of Ritholtz Wealth Management and frequent CNBC commentator, is quick to point out to television viewers that he … [Read More...]
Apple Up 50%, Eclipsing Performance of Other Dow Stocks
Apple shares have risen nearly 50% this year. That is by far the best performance of any of the 30 components of the Dow Jones industrial average. [Read More...]
Schedule for Week of October 20, 2019
The key reports this week are September New and Existing Home sales.For manufacturing, the Richmond and Kansas City Fed manufacturing surveys will be released this week.—– Monday, Oct 21st —–No major economic releases scheduled.—– Tuesday, Oct 22nd —–10:00 AM: Existing Home Sales for September from the National Association of Realtors (NAR). The consensus is for 5.45 million SAAR, down from 5.49 million in August.The graph shows existing home sales from 1994 through the report last month.Housing economist Tom Lawler expects the NAR to report 5.36 million SAAR.10:00 AM ET: Richmond Fed Survey of Manufacturing Activity for October.—– Wednesday, Oct 23rd —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.9:00 AM: FHFA House Price Index for August 2018. This was originally a GSE … [Read More...]
Saturday links: the first viral fast food phenomenon
AutosDespite all the hype, “personal car ownership in the US has actually increased in the past 10 years.” (wired.com)Children are still dying in hot cars at a record rate. (wsj.com)How Dyson’s bet on a new EV went wrong. (bloomberg.com)TrafficCity planners are increasingly using traffic simulations to reduced congested streets. (axios.com)How a few simple tweaks helped Pontevedra, Spain reduce auto traffic in its city core by 90%. (reasonstobecheerful.world)EnergyIn Q3 the UK generated more power from renewables than fossil fuels since the late 1800s. (axios.com)Grid shutdowns are forcing California companies to look for alternatives. (washingtonpost.com)EnvironmentThe residents of Pecan Acres, Louisiana, are some of America’s first climate refugees. They will not be the last. (cnbc.com)Australia has its own issues with land clearing … [Read More...]
2020 Vision: Hillary Clinton thinks Russia will back Tulsi Gabbard to help Trump stay in power
“This is not some outlandish claim,” Clinton said in an interview this week. “This is reality.” [Read More...]
You Don’t Want to Work Abroad in These Wealthy Countries
Global migration has increased sharply in recent years. In the Organisation for Economic Co-operation and Development (OECD) — a group of 36 of some of the richest and healthiest countries in… [Read More...]
Podcast links: a multi-disciplinary game
The bizThe keys to Wondery’s success in podcasting. (businessinsider.com)FinanceHoward Lindzon talks with Morgan Housel. (howardlindzon.com)Ted Seides talks farmland investing with Jay Girotto who is President of Farmland Opportunity. (capitalallocatorspodcast.com)Robert Hagstrom on why investing is a multi-disciplinary game. (blogs.cfainstitute.org)Meb Faber talks with Larry Hite about his new book “THE RULE: How I Beat the Odds in the Markets and in Life?and How You Can Too.” (mebfaber.com)Tobias Carlisle talks with Lawrence Hamtil about sin stocks and sectors. (youtube.com)Adam Butler and Rodrigo Gordillo talk about the use of machine learning in quant finance. (gestaltu.libsyn.com)Jeff Ptak and Christine Benz talk all things passive investing with Ben Johnson. (morningstar.com)Aaron Task and Stephen Alpher talk with THE Eddy Elfenbein. (crossingwallstreet.com)Talking … [Read More...]
Schiff, ever a prosecutor, draws GOP ire in impeachment
There is no Archibald Cox or Ken Starr to be found in President Donald Trump’s impeachment. While those independent prosecutors launched the investigations of Presidents Richard Nixon and Bill Clinton, there is no comparative figure in the House impeachment inquiry. Former special counsel Robert Mueller led the Russia probe, but no new prosecutor has been tapped by Attorney General William Barr for the Ukraine matter. [Read More...]
China’s GDP Growth Near Record Low
Chinese GDP growth fell to 6.0% in the third quarter, down from 6.1% in the second quarter. While tariffs are having an impact on exports, China’s falling imports are likely even more to blame for… [Read More...]
WSJ Wealth Adviser Briefing: Interest Rate Cuts, Mutual Fund Fees, Flu Shots
The American consumer—backed by strong wage growth—has offset weakness in corporate profits and capital spending for much of the past year, but the Commerce Department’s latest update of retail and food service spending suggests the growth spurt is over. The upshot? The slowdown could prompt a more vigorous “midcycle adjustment”—read: interest-rate cuts—by the Federal Reserve when it meets at the end of this month. Below, some of the best analysis and insight from WSJ writers and columnists, the Dow Jones Newswires team and occasionally beyond, on investing, the wealth-management business and more. PLANNING & INVESTING Stock Trading May Be Free, but Not So for Mutual Funds: While thousands of mutual funds can be traded on brokerage platforms without transaction fees, in many cases, investors will … [Read More...]
Friday links: a period of inflated expectations
StrategyYou can’t count on the US stock market to outperform the rest of the world indefinitely. (morningstar.com)”Mean reversion is a powerful force.” (novelinvestor.com)ShoesThere is huge debate about Nike’s ($NKE) Vaporfly shoes in the running world. (nytimes.com)Why are stolen designs such a problem in the sneaker industry? (fastcompany.com)StreamingNetflix’s ($NFLX) top ten shows and movies over the past year holds some surprises. (nytimes.com)How streaming became just one more thing to manage. (latimes.com)Health insuranceCompanies are increasingly having their employees travel for specialized medical care. (wsj.com)United Healthcare ($UNH) is directing patients away from hospitals. (axios.com)TradingThe SEC is (still) looking for ways to make it easier to trade small and mid-cap type stocks. (wsj.com)Charles Schwab ($SCHW) is going to allow the … [Read More...]
Pelosi describes Trump's 'very serious meltdown' during White House meeting on Syria
House Speaker Nancy Pelosi walked out of a meeting with Donald Trump about the crisis in Syria Wednesday after she said the president had had a “very serious meltdown” and insulted her in front of other congressional leaders. [Read More...]
States With the Most Indian Reservations and Tribal Areas
Until the arrival of Europeans in the 17th century, indigenous people inhabited most of what is now the United States. During hundreds of years of sometimes bloody conflict, the native people were… [Read More...]
LA area Port Traffic Down Year-over-year in September
Special note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.Container traffic gives us an idea about the volume of goods being exported and imported – and usually some hints about the trade report since LA area ports handle about 40% of the nation’s container port traffic.The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the … [Read More...]
Startup links: an infinite mindset
Vision FundThe WeWork/Vision Fund fiasco has put the fear of God in startups and VCs. (haystack.vc)”The Vision Fund era of the current technology and venture capital boom is over.” (news.crunchbase.com)CompaniesReddit is raising money from Tencent at a $3 billion valuation. (techcrunch.com)Zippin and Standard Cognition are competing with Amazon ($AMZN) on cashierless store technology. (wsj.com)What is next for Robinhood? (news.crunchbase.com)Rho Business wants to work as basic operational banking infrastructure for startups. (news.crunchbase.com)Venture capitalHow Brianne Kimmel came to found Work Life, a future of work focused fund. (briannekimmel.com)Three reasons why VCs may become less reluctant to fund competing startups. (hunterwalk.com)A Q&A with Dafina Toncheva of early-stage investment firm U.S. Venture Partners. (fortune.com)StartupsIt’s … [Read More...]
Former top Navy SEAL who oversaw the Osama bin Laden raid says the US is 'under attack from the president'
The retired Navy SEAL William McRaven said a retired general told him, "'I don't like the Democrats, but Trump is destroying the Republic!'" [Read More...]
WSJ Wealth Adviser Briefing: Energy Stocks Fall, KKR Powers Up, Coach Seats Improve
The capital markets and global economy are caught in a feedback loop amplified by U.S. politics and the U.S. dollar. The question is how long investors will suffer. The U.S. is embroiled in a trade war with China, President Trump is under an impeachment inquiry, and the 2020 election already looks as bitter as 2016. Those U.S.-centric issues are causing havoc in the markets, driving investors to havens. Below, some of the best analysis and insight from WSJ writers and columnists, the Dow Jones Newswires team and occasionally beyond, on investing, the wealth-management business and more. PLANNING & INVESTING Energy Stocks Fall Faster Than Oil Prices: Horrific. Terrible. Abysmal. The worst. Those are terms equity analysts are using to describe investors’ attitude toward … [Read More...]
Philly Fed Manufacturing shows slow Growth in October
From the Philly Fed: Current Manufacturing Indexes Suggest Growth in October Manufacturing activity in the region continued to grow, according to results from the October Manufacturing Business Outlook Survey. The survey’s broad indicators remained positive, although their movements were mixed this month: The general activity and shipments indicators decreased from their readings last month, but the indicators for new orders and employment increased. The survey’s future activity indexes remained positive, suggesting continued optimism about growth for the next six months.The diffusion index for current general activity fell 6 points this month to 5.6, after decreasing 5 points in September.emphasis addedThis was at the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index: Click on graph for larger image.The New York … [Read More...]
3 Reasons Why Tesla Shares Are Running Higher
Tesla stock is nearing a 10-day run of rising prices following its announcement of 97,000 deliveries last month. But there’s even more news that might be supporting the company’s shares. [Read More...]
Thursday links: sufficient outperformance
MarketsSaaS stocks are having a rough go of it, of late. (news.crunchbase.com)The market is littered with those who called for a comeback in inflation. (mrzepczynski.blogspot.com)Asset allocationA eulogy for the 60/40 portfolio. (awealthofcommonsense.com)Why ‘traditional asset allocations’ don’t work for a lot of investors. (investwithanedge.com)Vanguard investors are pretty well-behaved. (theirrelevantinvestor.com)Streaming’Stranger Things’ helped to stabilize things at Netflix ($NFLX). (nytimes.com)AMC Theaters is launching its own on-demand video service. (engadget.com)BusinessFanDuel and DraftKings dominate sports betting in New Jersey. (ft.com)A 26-story Dallas apartment building will soon be used exclusively for short-term rentals. (wsj.com)Scotch makers are rushing to get their bottles to the US to avoid tariffs. (ft.com)AlternativesThe IMF is concerned about the rise in private/alternative assets. (ftalphaville…. [Read More...]
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