Search Results for: glocal
Why Gold Really Crashed and What You Can Do About It
The news is great at telling us what's happening. But knowing what's happening is a lot different than understanding what happened – and that's what makes the difference between an average investor and truly great investors.
Gold's crash Monday is a perfect example. The media was falling all over itself as one pundit after the other came on TV to talk about how gold was falling and how far off its highs it was. Few tied the devastating slide to real economic events — let alone made the connection to actual trading.
But that's my bread and butter. Today I'm going to tell you what really happened and why – from a market insider's perspective. Then I'm going to tell you what to expect next and, most importantly, how you can use the situation to your advantage.
There are three fundamental things going on – all of which are at a very high level and all of which are completely transparent to most investors:
Buy, Sell or Hold: Is Coca-Cola Still the "Real Thing" For Investors?
Suffice it to say, Coke has been a big part of our culture for over 100 years.
When I was growing up I wasn't shy about shaking a malfunctioning vending machine whenever my craving for an icy cold Coke kicked in.
But lately, have you noticed you are more likely to grab a Starbucks coffee for your caffeine fix?
Or maybe you are more inclined to pick up a sports or energy drink when you are on the go. Better yet, as you become more health conscious, it's a juice or a fruit smoothie that does the trick.
The good news is that the Coca-Cola Company (NYSE: KO) has "matured" right along with you and is trying to use its status as the most recognized brand in the world to deliver new products to its thirsty customers.
That's one of the reasons I'm so bullish about Coke these days. But it's not the only one…
Why this Ivy League Professor Sees Dow Hitting 18,000
The bears predicting a stock market crash have it all wrong.
So says Jeremy Siegel, finance professor at the University of Pennsylvania's Wharton School and author of "Stocks for the Long Run." He predicts the Dow – which closed yesterday (Wednesday) at a new record high 14,455.28 – will continue the bull market run, ending this year in the 16,000 to 17,000 range.
For 2014, he says, the "best bet goal" is the Dow will climb to 18,000.
And the well-known bull has nearly 150 years of data to back up his bold prediction.
Here's why Siegel is so bullish.
Why Your Financial Future Will Be Built Upon the Chinese Yuan
If you have any illusions, put them aside now. It's the Yuan's world – the West is just living in it, or borrowing from it as the case may be.
Demand for the Yuan is growing at such a staggering rate that your financial future will be built upon it.
Admittedly, this is a very tough concept for most people to wrap their minds around. It's tough to lose "your" spot at the top and it's even tougher to know you're losing it and not be able to do anything about it because the leaders who are responsible for maintaining that position don't understand the end game.
It's made worse by Washington's insistence that the dollar is still a weapon when large swathes of the world now believe it's a liability. It's exacerbated by Europeans who forget that a sound currency actually requires underlying economic stability. It's threatened by the latest crop of Japanese bankers who seem determined to print money into oblivion.
Sadly, this is not new. The old guard always fights for the status quo when something different or not well understood like the Yuan comes onto the scene.
What Bankrupt Athletes Wish They Knew About Financial Windfalls
Few among us haven't dreamed of sudden riches – the financial windfall of a big legal settlement, an unexpected inheritance, a winning lottery ticket, or, for the young and athletically gifted, a lucrative contract with a major professional sports franchise.
But it turns out that few are prepared for a financial windfall when it comes their way.
Nowhere is this more obvious than with big sports stars.
Despite the proliferation of multimillion-dollar contracts, an astonishing number of professional athletes are forced to declare bankruptcy within a few years of hanging up their jerseys.
In the National Football League, for example, where the average salary is $1.9 million, 78% of former players are in bankruptcy within five years of retirement. That figure is 60% for former National Basketball Association players, who earn an average of $5.5 million a year as players.
How can people so generously compensated go broke so quickly?
Part of it has to do with youth, but many of the mistakes athletes make with the financial windfall of a professional sports salary also are made by regular people who suddenly come into large sums of money.
There's a lot we all can learn from their mistakes. When it comes to financial windfalls, it's best to know what to expect ahead of time so you can put the money to work for you instead of squandering it.
"Every single day, people come into large sums of money, whether it's a thousand dollars or a million, and without proper planning, funds quickly disappear," writes Jim Wang in U.S. News and World Report. "Just look at the horrible stories you often hear of lottery winners, and you'll have enough evidence that everyone needs a little preparation, even if you don't expect to get a windfall."
As Volatility Hits New Lows, It Could Be Time to Sell
The average daily price volatility of stocks has fallen more than 60% since the beginning of 2013. It's the biggest straight-line drop in some 82 years.
A lot of investors are rejoicing. After all, stocks have risen an average of 17% a year when volatility is as low as it is right now, Bloomberg reports.
There is, however, a dark side to low volatility. Namely, it tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, and at other key turning points over the past 100 years.
Today, I'm going to talk a bit about what low volatility means for you in terms of upside, and also show you how to protect yourself in a downslide.
Let's start with the concept of average daily volatility itself.
Fiscal Cliff Deal Averts the Crisis… But Now What?
[Singapore] – It's late Tuesday evening and I'm about to go on air with CNBC Asia in Singapore regarding the impact of the Fiscal Cliff bill which passed minutes ago after Republican leaders decided not to try and tack on amendments nor engage in further bickering.
Passed by a 257 to 167 vote, the bill is now headed to the White House and a draft may even be on the President's desk by the time you read this.
So I'll have to write quickly.
Here's the scoop on the fiscal cliff deal:
- The Bush-era income tax cuts become permanent for the majority of workers while they expire for so-called "top" earners. The break is at $400,000 for individuals and $450,000 for couples. That's approximately double Obama's campaign level and 80% more than his preferred "married couples rate" according to various sources. Dividend tax rates and capital gains rates for top earners will rise to 23.8% while personal exemptions and itemized deductions that are presently in force expire for individuals earning more than $250,000 and married couples earning more than $300,000. The alternative minimum tax is now fixed to avoid snagging still more middle class households.
- Expanded unemployment benefits will continue.
- Automatic spending cuts are deferred for two months.
- A two percent payroll tax cut expires.
- Estate taxes will get an inflation indexed exemption of $5 million or more and taxes will top out at 40%.
Key takeaways on the agreement:
- Once again Washington is kicking the can down the road. While it's already being played up by both parties as an example of bipartisanship, it's really a load of hooey. The bill merely puts off decisions for yet another round of fiscal follies a few months from now.
Can You Really Trust Chinese Stocks?
At first glance, Chinese stocks that trade on U.S. exchanges are dirt cheap. But the truth is you need to take a long hard look before you leap.
Behind the curtain you could find that they've cooked the books.
In fact, last week, the U.S. Securities and Exchange Commission accused the Chinese affiliates of "the Big Four" auditing companies of breaking securities laws after they refused to produce the "work papers" related to accounting fraud investigations at nine Chinese companies.
Naturally, they all cried foul.
According to auditors from Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers producing this paperwork is illegal under Chinese law-hence the stalemate.
It's a dispute that highlights the cultural clash between the Chinese need for secrecy and U.S. anti-fraud efforts that demand more transparency.
The bottom line in this case, though, is quite a bit more simple: If there's no way to ensure the accounting practices at Chinese companies are candid, investors should completely avoid them.
Whether it's here or abroad, you should never invest in anything where you can't trust the numbers.
Chinese small caps are just the latest example now that this brewing accounting scandal seems to be coming to a head. The SEC has filed fraud allegations against 40 individuals or companies.
Warning: The Fiscal Cliff Could Cost You Your Job
While Americans stash extra cash to prepare for the economic effects of the looming fiscal cliff in 2013, another more immediate concern has developed: How many people will get laid off as companies brace for spending cuts and tax hikes?
The fiscal cliff will pack a double whammy to some businesses. Companies in certain tax brackets will be paying more to Uncle Sam, while some will see their government funding disappear.
The substantial fiscal cliff effect has prompted firms to rein in spending, delay projects, defer bids – and cut staff.
In fact, a recent study from Ernst & Young, the National Federation of Independent Business, the U.S. Chamber of Commerce and other business advocates revealed the fiscal cliff could slash 710,000 jobs from the already beleaguered job market.
It's already starting…
According to a Bloomberg News, companies in North America cut more than 62,000 jobs from Sept 1 through the end of October… the biggest two-month slashing of jobs since the beginning of 2010.
Further in the same time period, the computer industry cut more than 40,000 jobs… the transportation industry more than 33,000 jobs… and the insurance more than 7,000 jobs – all tremendous job loss increases over the same period in those industries last year, according to the USA Today.
What 4 More Years Of Obama Means For Your Money
In this special report, each of Money Morning's top investing experts tell you exactly how they see the next four years playing out… what danger's lie ahead… and how you should best position your portfolio to protect and profit.
Time to Go "Glocal"
The $600 billion fiscal cliff we've warned you about has never gone away. It's been marginalized by the campaign, but it has never disappeared. It is, bar none, the single- biggest issue facing our country at the moment.
But President Obama's re-election means a lame duck president and a lame duck Congress. Rather than a grand solution, expect more grandstanding and another game of kick the can down the road.
Generally speaking, the markets are going to be very choppy in the near term. Fully half the traders on Wall Street woke up on the wrong side of the proverbial bed the day after the election and they're going to have to adjust their bets accordingly.
The most stable, defensive and, ironically, opportunistic choices will remain large, super cap stocks. I call them "glocals." These are companies like MCD, Procter and Gamble, General Electric, ABB, Raytheon and Vodaphone. All of them are global brands and have the experience needed to manage real growth despite challenging economic conditions around the world. Most typically pay high income that offsets the risk of ownership and are therefore far more stable than non-dividend paying alternatives.
Small cap stocks are just the opposite. Unless there is something especially compelling about them, like a truly unique patent or a new long- term government contract, the volatility will be more than most investors are prepared to accept. Most pay no income whatsoever so they're a crap shoot in today's environment.