FORBES- "You'll find some great information."BUSINESS WEEK: "For an Expert, Click here"
“The essence of investment management entails the management of risk, not the management of returns."
You shouldn’t own common stocks if a 50% decrease in their value in a short period of time would cause you acute distress
But the losses can accumulate over longer than a short
term (1 year)
S&P 500 2000
And you do that for the immigrants
EFM- Well, it may be nice to have permanent insurance but the cost is prohibitive for the amount needed. Term insurance can cover decades of coverage for dollars less. That is usually the only way that the 'underserved' can afford what they need.
Chart of the Week
- Argentina’s natural gas production from shale has climbed significantly in the last few years, driven by increased drilling in the Vaca Muerta shale.
- Production from the Vaca Muerta surpassed 1 billion cubic feet per day (Bcf/d) at the end of 2018.
- Higher production has allowed Argentina to resume gas exports. Argentina’s first LNG shipment departed in June.
• Energy Transfer Partners (NYSE: ETP) is considering the sale of its 33 percent stake in the Rover Pipeline, which carries natural gas from the Marcellus shale to the U.S. Midwest. The sale could be worth as much as $2.5 billion.
• Analysts and investors panned the Callon-Carrizo deal (more below). Callon Petroleum’s (NYSE: CPE) share price plunged by 15 percent on the news.
• American Electric Power (NYSE: AEP) says it will buy three wind projects in Oklahoma at a cost of $2 billion. AEP says it will save ratepayers $3 billion.
Tuesday July 16, 2019
Oil prices started off the week on a quiet note, but retreated on Tuesday afternoon after Secretary of State Mike Pompeo said that Iran is ready to negotiate its missile program. .
China’s growth slows to 27-year low. New data shows that China’s GDP growth fell to just 6.2 percent in the second quarter, the worst performance in nearly three decades. In the first quarter, growth stood at 6.4 percent. “Economic conditions are still severe both at home and abroad, the global economic growth is slowing down, the external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure,” said Mao Shengyong, a spokesman for China’s National Bureau of Statistics, in a news conference.
European carbon prices could rise on Exxon court decision. The European Union’s Court of Justice ruled that a natural gas processing facility owned by ExxonMobil (NYSE: XOM) should be classified as an electricity generator, subjecting it to the carbon market. If that decision applies to some 3,000 factories that transfer heat or electricity to the public grid, it could bring in a lot more polluters, which could drive up the cost of carbon. Carbon prices are already at an 11-year high. “It’s backfiring not just on Exxon, but on many companies receiving free allowances for power stations located at factories,”
EIA: U.S. CO2 emissions to fall in 2019. The EIA expects U.S. energy-related carbon emissions to fall this year by 2.2 percent, largely due to the decline of coal-fired power plants. Last year emissions rose 2.7 percent compared to 2017 levels. Meanwhile, NASA said that the world just saw the hottest June on record
Nearly 30% of US parents and grandparents have assisted younger family members with a real estate purchase, and 54% of those who did took the funds from their retirement savings, according to a survey by Legal & General. The survey also showed many parents do not seek advice from financial experts before making such decisions.
use of 401(k)
loans reached a nine-year low of 22.5 percent in 2018 and
continued a steady
six-year decline of nearly 10 percent ... [T]he percentage
of participants who
took a hardship withdrawal fell for the ninth consecutive
year, declining from
1.9 percent in 2010 to 1.3 percent in 2018. However, both
loan balances and the
average amount of hardship withdrawals increased."
retirement has robbed the public of the responsibility and
with personal finance.... People fund retirement plans
blindly. They don't
focus on cash flow, they focus on accumulation. And when
it's time for cash
flow, they're heavily disappointed.... [H]ow, if it has
been failing for so
long, are we still buying into this? This retirement plan
notion, that focuses
on accumulation and setting money aside; and then one-day,
someday, you might
actually retire. It hasn't worked and it won't work."
Garrett Gunderson in Forbes
Many wealth-management firms that used to avoid working with 401(k) plans are now seeking out that business, Some have found it an area in which to look for financial-planning clients, while others see it as an opportunity to cross-sell products,
· Single women make up 25% of America's workforce today.
· 1 in 3 of all single women in the U.S. today say they are "extremely unprepared" for a disabling event that causes them to lose the ability to work.
than half of all single, working women
age 20-65 have no disability insurance whatsoever.
For those with disability insurance, the majority admit they don't think they have enough coverage
analysis found 75% of men who had disability coverage believed they were adequately insured while only 57% of women felt the same way. Of greatest concern was the nearly 10 million single, working females who said they were “extremely unprepared” financially for work absences. This group was almost three times as vulnerable to income loss as men (11%) and less secure than married women – 20% of whom reported extreme unpreparedness. In an ongoing 3-year study by The CDA of individual, short- and long-term disability insurance claims (to be released later this year), women experienced a higher overall incidence of disability claims. Without some form of income protection, single women can expect to experience greater rates of financial difficulty if they need to miss work due to illness, injury or pregnancy. Women surveyed reported lower individual salaries, lower financial security, described their debt as a bigger problem, and reported lower preparedness for all types of financial emergencies than men.
House Speaker Nancy Pelosi late Monday said the House of Representatives would not raise the debt ceiling unless it is part of a broader budget deal, putting extreme pressure on the White House and congressional leaders to cut a deal within days. Pelosi’s comments appeared to directly shoot down a demand from Treasury Secretary Steven Mnuchin just hours earlier, when he said that Congress would have to raise the debt ceiling before the August recess if members can’t reach a budget deal because he could run out of money to pay the government’s bills if no action was taken.
There is one more source of population growth that the U.S. has traditionally depended on — immigration. Low-skilled immigrants make it easier to raise kids by providing cheap child-care services. High-skilled immigrants earn more and pay a lot of taxes, while using few government services themselves, meaning that their fiscal contribution is enormously positive.
But low-skilled immigration to the U.S. has declined, meaning that more expensive child care is on the horizon. And high-skilled immigration may soon taper off, as President Donald Trump’s policies and rhetoric make the country less hospitable for the world’s best and brightest.
In other words, the U.S. may soon find itself without its two big long-term population boosters, and wind up as a graying, shrinking nation, with young people burdened with supporting ever-more old people, and the elderly themselves forced to work long into what used to be the golden years.
A few surprises. Just stay away from retiring there.
EFM- Kinda sucks but a couple things are OK. But to repeat, rebalancing reduces returns. Your main focus in retirement for middle income is to make as much money as you can and also limit losses. The Process explained above does that.
China GDP growth slows to 6.2% in second quarter
China’s economy grew at 6.2 per cent year on year in the second quarter, its slowest pace since the early 1990s, as a trade war with the US hit investor sentiment.
The statistics bureau’s release of data on Monday was in line with expectations and slower than the 6.4 per cent reported in the first quarter and the 6.6 per cent for full-year 2018. The softening comes against the backdrop of difficult relations with the US, which soured in May but improved a month later after a meeting between the two countries’ presidents.
EFM- To explain difficult subjects, you really, really, really have to know your subject cold. A real problem with financial planning is that everything changes at a whim. Product changes occur as I write this, the local, regional, state, U.S. and international economies are all over the place, tax rates and code changes happen regularly, changes in rules for pensions and retirement plans change at least a few times per year, ....... makse it tough to stay aheqad. But the industry does effectively nothing for the license exam so they end up with the right to sell but without the necessity to know the implications.
7/15: Quantitative analysis
Unlike traditional qualitative investment analysts, quants don’t visit companies, meet the management teams or research the products the firms sell in an effort to identify a competitive edge. They often don’t know or care about the qualitative aspects of the companies they invest in, relying purely on math to make investment decisions.
The Boston College research team analyzed all of the available data to study whether households would be able to replace 75% of their income in retirement by evaluating income from a variety of perspectives (e.g., final-year earnings, average of last five years of earnings, average earnings over course of career and average wage-indexed career earnings). Unfortunately, looking at the various sources of households’ estimated retirement income, even the most reliable survey data produces a similarly disconcerting result.
research team published a report finding that roughly half of older American households are likely to face a shortfall in the retirement income they will need. The percentage of retirees at risk ranged from 42% to 60%, depending on the income definitions applied, in the various statistical models used by researchers.
Some “high-yield” bonds go negative. More than a dozen junk bonds, which usually carry high yields, now trade in Europe with a negative yield. It is a stark illustration of how ultraloose monetary policies have turned debt investing into a choice about how to lose the least amount of money.
Estimates put the cost of climate-related disasters at $520bn a year, while the additional cost of building infrastructure that is resistant to the effects of global heating is only about 3%, or $2.7tn in total over the next 20 years.
Mizutori said: “This is not a lot of money [in the context of infrastructure spending], but investors have not been doing enough. Resilience needs to become a commodity that people will pay for.”
Until now, most of the focus of work on the climate crisis has been on “mitigation” – jargon for cutting greenhouse gas emissions, and not to be confused with mitigating the effects of the climate crisis. The question of adapting to its effects has taken a distant second place, in part because activists and scientists were concerned for years that people would gain a false complacency that we need not cut emissions as we could adapt to the effects instead, and also because while cutting emissions could be clearly measured, the question of adapting or increasing resilience was harder to pin down.
Mizutori said the time for such arguments had ran out. “We talk about a climate emergency and a climate crisis, but if we cannot confront this [issue of adapting to the effects] we will not survive,” she told the Guardian. “We need to look at the risks of not investing in resilience.”
The housing shortage that fueled competition and resulted in sky-high price gains throughout 2017 and the first half of 2018 is on the horizon yet again. Supply is soon expected to drop and could hit a record low.
Hedge-fund performance has been underwhelming. An influential professional organization has overhauled its reporting standards in order to bring more funds into the fold, but adoption would force portfolio managers to give up tactics to make returns look better.
The notoriously opaque hedge-fund industry has never widely adopted any broad guidelines for calculating performance figures. Managers can overstate returns by selective reporting, observers say, and many are supportive of centralized, transparent rules.
It's another example of the transformation the once niche industry has made into a more institutional business.
EFM- Now what? Does Trump suggest tariffs? No more weapons sales? Just another mess.
more than one in three adults are obese.
Mexico’s finance minister resigns Carlos Urzúa has quit as Mexico’s finance minister, a stinging blow to the country’s leftist president, who hoped the US-trained economist would bring credibility to his reform agenda. The resignation comes as Mexico’s economy is under wider pressure and growth has screeched to a halt.
The algae epidemic suffocating the Caribbean has hit a scary milestone — the world's largest seaweed bloom now stretches from Africa to Mexico
Despite a 479-million-year track record of success going back to before the dinosaurs, bugs have lately begun to struggle. We don’t have a complete global picture of insect populations, but data suggest that while we humans have doubled our population in the past 40 years, the number of insects has been reduced by almost half, according to a 2014 report in the journal Science. An April review of 73 historical reports of insect declines, published in the journal Biological Conservation, concluded that nearly a third of evaluated insects are threatened by extinction, compared with 18% for vertebrates.
Here I am managing my portfolio
Why does this disappearance matter? Because biodiversity underpins all the natural goods and services that we humans rely on, and insects make up an outsize proportion of that diversity. Three quarters of all known plant and animal species on this planet are insects. Those giant quantities help to keep nature in balance, so anything that affects them ultimately affects us. A decline in the number and diversity of insects and other small species ripples through the ecosystem, interfering with a range of essential functions. As the renowned Harvard biologist E.O. Wilson wrote in 1987, “The truth is that we need invertebrates but they don’t need us…if invertebrates were to disappear, I doubt that the human species could live more than a few months.”
Insect populations are falling for a number of interconnected reasons. Most important is our ever-more-intensive use of land for agriculture and development, which leaves fewer intact habitats, from rain forests to flower meadows. On top of that, climate change, pollution and pesticides, as well as the movement of species to non-native environments around the world, have had a destructive cascading effect on local ecosystems and their insects. Even increased use of artificial light has an impact on some species.
I live by Lake Rousseau in Florida. It is fed by the
Withlacoochee river. When flooding occurs, the upstream
river is fed by some large farms and golf courses- which
contain all sorts of chemicals and pesticides.
are hardly any mosquitoes here whether day or night, winter
and summer. If no bugs, no small fish on the surface. If no
small fish, no top water action. Or the once top bass lake
in the US is now dead in many areas
Scientists are researching the potential consequences of the rapid decline of the honey bee population in the U.S. and how to mitigate its effects before it causes dire problems for crop management and production.
Between Oct. 1, 2018, and April 1, 2019, 37.7% of the managed honey bee population -- colonies kept by commercial beekeepers -- declined, 7 percentage points lower than the same time frame during the 2017-2018 winter
U.S. crops are produced with the help of 2.6 million colonies transported by 18-wheelers from place to place during peak flowering, McArt said. Of the $20 billion worth of U.S. crop production supported by pollinators, commercial honey bees are responsible for about half. Wild bees and other pollinators take care of the rest.
If the bees die, we die
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.
Say you are looking at a blue chip fund is 'only' slightly riskier than investment grade bonds. It is 'visually' appealing for marketing and sales. But is it not true that the standard deviation is kinda low? Yep. But then comes the real world. The large cap fund- say the S&P500- lost 49% in 2000 and 57% loss in 2008. Standard deviation is a form of risk BUT NOT RISK OF LOSS IPSO FACTO. However, this is the type of chart- coupled with the erroneous chatter- that cannot be utilized for the public.
Read the article.
EFM- When you douse yourself with a greater standard deviation, you are guaranteed greater losses over time. Well, we can speak to the issue of SD, or beta, or alpha of whatever else one desires. But what would happen if you eliminated the losses like 2000- 49& and 2008- 57%. Buffett's portfolio outshines the others by a wide margin with far less risk than staying in the mrket and getting clobbered
ACCUAACY versus PRECISION
Both accuracy and precision reflect how close a measurement is to an actual value, but accuracy reflects how close a measurement is to a known or accepted value, while precision reflects how reproducible measurements are, even if they are far from the accepted value.
|7/8 Iran’s president, Hassan Rouhani, is betting that the U.S. will back away from crushing sanctions or that he can split European nations from the Trump administration, which withdrew from the nuclear accord last year.|
Deutsche Bank has unveiled one of the most radical banking overhauls since the financial crisis, closing swaths of its trading unit and hiving off €74bn of assets as the struggling German lender calls time on its 20-year attempt to break into the top ranks of Wall Street.
internet makes people less informed, a
new study suggests, because an abundance of
easily accessible information makes it easier for people to
find facts or viewpoints that will support their current
beliefs. And, given a choice between learning something
new and confirming what they already think they know,
people will generally choose the latter.
the average American family has
yet to recover fully from the 2008 financial crisis, the
Federal Reserve found, leaving half the nation with a
diminished cushion to handle surprise expenses — or the next
The bottom half has less wealth today, after adjusting for inflation, than it did in 1989,
Half of U.S. jobs pay less than $18.58 an hour and more than a third pay less than $15, which makes it difficult to save or invest for a better future. To get by, Americans have borrowed heavily in recent years. Total U.S. household debt is now $13.7 trillion, surpassing the 2008 peak in dollar terms, according to the Federal Reserve Bank of New York. The surge in debt this time around is for cars and college, not mortgages.
To get by, Americans have borrowed heavily in recent years. Total U.S. household debt is now $13.7 trillion, surpassing the 2008 peak in dollar terms, according to the Federal Reserve Bank of New York. The surge in debt this time around is for cars and college, not mortgages.
Two in five of such households did have access to a traditional pension, also known as a defined benefit plan. However, 29 percent of older Americans had neither a pension nor any assets in a 401(k) or IRA account.
school course teaching students about college costs,
mortgages and credit cards is mandatory since many will need
and use the education soon.
The problem with a mortgage is that items like this are not
used for a few years. Due to everything in our world
changing immediately, the knowledge that had existed will
probably be well out of date. And then what? If too much
times go by they are out to lunch. Many educators who have
taught such classes and followed up say such education is a
waste of time. If they don't use it, they lose it.
EFM- Same scenario. What is needed is just in time information- budgeting, annuities, life insurance, life settlements, mutual funds, ETFs, Risk of Loss, Estate Planning basics, retirement planning, and on and on. So will it happen? Not without the industry maneuvering it's paws into every section. I recently sent a number of my just in time videos to the SEC. Went nowhere. That's why the average knowledge of lower income will continue to be lost. The truth may be out there but the consumer will rarely see it since it will be the marketing element of the industry that will prevail.
data suggest that while we humans have doubled our population in the past 40 years, the number of insects has been reduced by almost half, according to a 2014 report in the journal Science. An April review of 73 historical reports of insect declines, published in the journal Biological Conservation, concluded that nearly a third of evaluated insects are threatened by extinction, compared with 18% for vertebrates
Just $10 trillion of America’s $30 trillion in private debt is held at commercial banks, he says. The rest is with secondary institutions, like hedge funds, which are lightly regulated or unregulated.
For the first time, there are more college-educated women in the work force than college-educated men.
It found that women 25 and older now make up 50.2 percent of the college-educated work force — up about 11 percent since 2000.
Women have been earning the majority of bachelor’s degrees, and more advanced degrees, in the United States since the early 1980s, according to the National Center for Education Statistics. Of those who earned a bachelor’s degree last year, 57.5 percent were women.
White women must work 16 months to earn what their white male colleagues earned in 12, based on analysis of United States census data. Women of color must work even longer.
In Florida, there is a tattoo parlor- or 2 or 3...- in 'every' city. Here is a great idea for getting one. If you have scars or other blemishes that are unseemly and you wish to hide- or at least moderate, tattoo artists can make nice designs that cover/distract the eye into seeing a beautiful design.
the Wildthunder Wildlife & Animal Rehabilitation & Sanctuary in Iowa posted a photo and message on Facebook asking for the bra hooks that are used to repair damaged shells. The post quickly went viral, amassing tens of thousands of shares as commentators promised to send bra clips from around the country.
there is no consistency across the hedge fund industry in how net performance is calculated and presented. There is some consistency in performance and risk disclosures, but they provide very little clarity. Most disclosures offer worst case scenarios as hedge fund law firms seek to limit their client’s liability. This does help keep less sophisticated investors away. Unfortunately, this type of disclosure provides limited information to be used by sophisticated investors to measure risk-adjusted performance across managers.
Schwab also found that 40% of advisors aren’t preparing for a recession at all — though a spokesman said that many firms are designed for long-term strategies and are not likely to make adjustments for a downturn.
advisors over-communicate to clients about the firm’s gameplan. He’s seen many advisors who thought they had great relationships with their clients — but when the market turned, they wound up overburdened with frantic calls.
In the past six months, 82% of advisors have had to reassure some of their client base about achieving investment goals
“ . . . and if anyone here knows any reason why these two should not be wed, any reason at all, like, say, something that might have happened after a long heart-to-heart and a few too many drinks, for instance, last week maybe, something you felt bad enough to bring to Confession, which you definitely should have, because it’s pretty serious—anyway, speak now . . . ”
A necessary read for anyone over 60
markets are in limbo as the G20 conference takes place and
OPEC+ prepares to meet in Vienna to discuss a possible
production cut extension.
Friday, June 28th, 2019
Oil prices moved higher at the end of this week, on the eve of a highly anticipated meeting between Donald Trump and Xi Jingping, which could result in a breakthrough in trade negotiations, an agreement to resume talks, or a collapse and subsequent increase in tariffs. On Monday, OPEC kicks off its meeting in Vienna. “The next few days will provide a much-needed dose of clarity for the oil balance over the coming months,” PVM’s Stephen Brannock said in a note. “Market bulls will be (hoping) that the G20 summit will provide a trade breakthrough ... All the while, the supply side of the oil coin continues to display bullish signals,” he added.
Europe sprinting to keep Iran on board. European governments will “double down” on efforts to keep economic ties alive with Iran, in an effort to keep the nuclear deal on life support, according to the Wall Street Journal. The EU has tried to develop a financing mechanism to circumvent U.S. sanctions but few foreign companies are willing to do business in Iran. Iran said that it would breach limits on uranium stockpiles as soon as this weekend. The last-ditch effort looks set to fail.
U.S. to assemble naval watch in Persian Gulf. The U.S. is hoping to enlist other nations in an effort to keep an eye on the Persian Gulf, according to the Wall Street Journal. The U.S. would contribute ships and aircraft but operational control would be headed by another nation. The plan aims to present deterrence to Iran, securing oil shipment lanes through the Strait of Hormuz
6/27: Consumption drove 65% of growth in China in the first quarter, despite recent hints of weakening. As Wang Jinzhao of the Beijing-backed Development Research Center pointed out in mid-June, exports just aren’t as big of a factor in China’s growth machine any more. They were 18% of gross domestic product in 2018, down from 35% in 2006