10 Thursday AM Reads

Have I mentioned how much I hate daylight savings time? Its why your morning train reads from your never-uses-an-alarm-clock author are late:

• Based on 87 years of performance data, small-cap value stocks far outperform Large Cap and Growth (MarketWatch)
• What a Great Time To Be An Investor! (Meb Faber)
• A Dozen Things I’ve Learned from David Tepper about Investing (25iq)
• Adam Nash: Broken Values & Bottom Lines (Mediumbut see Response to Blog by Wealthfront CEO Adam Nash (Schwab)
• The bull market at 6; charging hard or out of control? (Washington Post)

Continues here

 

 

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  1. Concerned Neighbour commented on Mar 12

    Bank of Japan Helps Tokyo Stocks Soar

    http://www.wsj.com/articles/boj-helps-tokyo-stocks-to-soar-1426065432

    “The Bank of Japan has bought ETFs on 143 days since April, 2013, mainly when the stock market has been down”.

    If you don’t believe other central banks aren’t using financial engineering to do the same then I have some prime Florida swampland to sell you.

    Can we finally stop calling these markets now? More accurate to call them what they really are: blatantly manipulated farces. I mean, how much more evidence do people need? Every time I read the word “market” in an article I’m being lied to.

    • RW commented on Mar 12

      Fed interventions into liquidity conditions is pretty much what central banks do all the time but, okay, there is no market.

      However if this putative fact has prevented you from investing in and profiting from the equity and bond unmarkets during this six+ year period then some re-evaluation would appear to be in order.

      Mind you I am not unsympathetic. It took me over a year to accept the possibility that corruption, economic rents and wage/productivity embezzlement could become corporate profit centers — with macroeconomic perversions such as a ‘jobless recovery’ then becoming possible and even likely — but ultimately accept it I did.

      Not without triggering a certain gag reflex I assure you and I still invest as if this was a cyclical bull within an ongoing secular bear but there it is: The circumstances are given and I can only change how I manage them (and vote with hope); FWIW.

    • Concerned Neighbour commented on Mar 12

      Interventions into liquidity conditions is fundamentally different from buying stocks in the open market.

      As to my own investing posture over the last six years, it’s immaterial. Everyone should be disgusted by the blatant manipulation.

  2. farmera1 commented on Mar 12

    Can Utilities Survive into the 21st Century

    Solar is really making the power companies nervous. With costs for solar dropping some 80% in the last six years, and installed capacity increasing at 30% plus a year or so power companies should be nervous. As with most monopolies power companies first efforts is to pass laws that put the hurt solar power . Their efforts have been “successful” in a few States. But the power companies are fighting a loosing battle. The hand writing is on the wall.

    http://oilprice.com/Energy/Energy-General/Can-Utilities-Survive-21st-Century-Energy-Market.html

    “In 2014, the U.S. installed 6.2 gigawatts of new solar power, a 30 percent jump over the year before. While that may not seem like much, the trend is clear: solar was second only to natural gas in terms of newly added capacity in 2014. The same will continue in 2015. Greentech Media predicts another 8.1 gigawatts in 2015, an additional 59 percent jump from 2014.”

    Storage is also a big part of the picture. There is a lot of activity going on in storage from self motivated inventors in home garage to some rather huge projects. Storage is behind generation as far as real practical usefulness but it is taking shape.

    http://oilprice.com/Alternative-Energy/Renewable-Energy/The-Cost-Of-Energy-Storage.html

    • noncist commented on Mar 12

      The EIA predicts that solar will still be second to natural gas in the year 2040. The quote you used belies this point, even though solar is growing by 30-40% per year, natural gas is growing even faster and from a much larger base.

      At the start of 2015, solar accounted for less than 0.5% of the grid mix. If these trends hold, it will still be less than 10% for more than a decade.

      Additionally, transmission lines will still be owned by utilities. These will continue to be valuable, because the sort of battery technology you refer to isn’t that practical even in a laboratory setting at the moment. Those garage inventors (of whom I know a few) can have power for a few days in a blackout at a significant cost, but they are not in the same league as people living off-grid (who manage to use very little energy to get by).

      Long story short, you are right in the long run, but this will take decades to play out.

  3. Iamthe50percent commented on Mar 12

    DST is an example of how politicians are scientifically illiterate. It does nothing but disrupt. It saves nothing. It is useless. Can we get rid of it?

  4. rd commented on Mar 12

    Here is an interesting analysis of a Schwab robo-advisor portfolio that does not focus on the cash kerfuffle (which I think is a tempest in a teapot). The conclusion from this analysis is that the Schwab portfolios are very focused on small cap and that is their big distinction from much of the rest of the field.
    http://www.etf.com/sections/blog/schwab-intelligent-portfolios-x-ray?nopaging=1

    This article notes that Schwab uses Schwab ETFs instead of Vanguard ones. However, they do not point out that Schwab doesn’t charge transaction fees on Schwab ETFs and mutual funds, but they do charge brokerage transaction fees for Vanguard (and many other) ETFs. So trading the Schwab funds in initial purchases, redemptions, and rebalancing will be free unlike many other robo-advisors. Since Schwab ETFs and mutual funds generally have pretty low expense ratios compared to equivalent funds, that seems like a reasonable deal. Keep in mind that nothing will have a lower expense ratio than a Vanguard all-in-one fund to achieve a reasonable diversified portfolio.

    BTW – I have been completely baffled by the focus on Schwab’s use of cash as being immoral because they might make money on it through their bank. The biggest single issue for mutual fund investors over the past half-century is that the investment companies have had high expenses and fees for their stock and bond funds investors. If anything, the fact that cash could otherwise be put into a Schwab ETF with higher fees than the money market account would have been a more reasonable “complaint”. With the small cap focus, the cash may make more sense to reduce volatility and get more bang in rebalancing during market ups and downs.

    I think most of the robo-advisor market is going to be tax-sheltered accounts, so the major tooth-gnashing over the tax implications of holding cash is generally going to be meaningless. If anything, preferentially holding interest bearing things in tax-sheltered accounts, even if taxed when the money comes out at the end, is preferential to holding them outside the account. So a retiree holding cash in their tax-sheltered account where they can choose when it will be taxed while potentially holding a more stock heavy account in a non-sheltered account could make a lot of sense depending on individual circumstance.

    • willid3 commented on Mar 12

      yep seems like we are, one question that seems to have arisen was would it be savings or standard time. at which point some one else pointed out, that by law it would have to be standard. course they state can choose to do this, and has been able to since after ww2.

  5. formerlawyer commented on Mar 12

    American millennials lag in international measures of literacy, numeracy and problem solving
    http://fortune.com/2015/03/10/american-millennials-are-among-the-worlds-least-skilled/

    see full report:
    http://www.ets.org/s/research/30079/index.html

    Studies show that “8.5 years living in a democracy will result in increased levels of support”. What does is say about America’s 248 year experiment?
    http://arstechnica.com/science/2015/03/new-democracies-need-about-8-years-for-popular-support-to-develop/

  6. Jojo commented on Mar 12

    Why doesn’t age discrimination in tech apply to CEO’s?
    —————
    What it’s like to be a 65-year startup CEO in Silicon Valley’s youth-loving culture
    Julie Bort
    Mar. 2, 2015

    When John Thompson retired from the CEO role at Symantec after 10 enormously successful 10 years, he had planned a quiet life as an angel investor and board member.

    That didn’t happen. Today, at age 65, he’s the CEO of Virtual Instruments, one of the startups he invested in, a job he has been doing for five years come April.

    ….

    http://www.businessinsider.com/john-thompson-65-year-old-startup-ceo-2015-2

  7. VennData commented on Mar 12

    We MUST protect Daylight savings Time, expanded by Bush, that misunderstood genius who will one day be proven right.

    Why? To protect the Family Farm that Clinton and Obama have ruined endlessly.

  8. VennData commented on Mar 12

    Republicans Admit: That Iran Letter Was a Dumb Idea

    “The administration has no sense of humor when it comes to how weakly they have been handling these negotiations,” said a top GOP Senate aide.

    http://www.thedailybeast.com/articles/2015/03/10/republicans-admit-that-iran-letter-was-a-dumb-idea.html

    ​Quite a rib tickler. Too bad​ these black president’s can dish it out but can’t take it if it involves his Muslim brethren. I stand by the GOP. The daddy party of sober, responsible leadership wand will continue to pull the lever for the rock-ribbed snake-handlers… er… a… statesmen who make up the GOP.

  9. VennData commented on Mar 12

    I delete my emails before I even read them.

    – John Kerry

  10. intlacct commented on Mar 13

    re: Blurred lines: I really didn’t see much similarity. A gimpy, funky, hip beat, party chatter in the background. So what? Is there really anything completely new under the sun music-wise? Doesn’t everything draw a bit on what went before? What is totally unique in hat arena…?

    If there are any copyright infringement types here – do you think this will survive appeal?

  11. intlacct commented on Mar 13

    I’m stunned BR held this up as an equivalent argument.

    “Why would an investment service purposely not invest almost a third of your account?”

    I guess this sonogram doesn’t remember 2008. Or 2000.

    “A 25-year old investor who is just starting out, making $65,000 per year and saving 10% annually, could end up with over $138,000 less in retirement due to having a 6% cash allocation in Schwab’s Intelligent Portfolios.

    At 30%, it’s almost criminal. The same 25-year old might be deprived of over $573,000 when she retires at 65.”

    Or 6% might help them ‘stay the course’. Or 30% might be because they like to go shopping when they view the market as overvalued. In any case, the risk tolerance is chosen by the customer.

    Is it our job to prevent competition for wealthfront.com?

    • intlacct commented on Mar 13

      sorry – referencing the wealthfront ceo article:

  12. intlacct commented on Mar 13

    more wealthfront drivel:

    “Put Your Clients First
    In December, Wealthfront dedicated a 14-foot wall to the Wealthfront manifesto. Why? It’s simple. Our clients are our one true north. They are our focus, our passion and our purpose.”

    Really, so you eliminated the conflict of interest between the management of wealthfront and that of your customers, a la your ideal, Vanguard? Do tell.

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