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Wealth Building Strategies

Dying Shopping Malls and Wealth Managers

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 16 May 2017 07:34

Ticker-TAPE-242x300....also from Martin: The Coming Central Bank Crisis

People talk about the changing environment. In the financial world around us, things are also changing dramatically. What use to be is no more. There are no real ticker-tape parades any more and future pits are closing opting for online trading. What is changing and why can we not see it? The internet has changed the way people shop around the world with the retail sector currently dominated by Amazon, accounting for almost 65% of online sales.   Amazon pasted Walmart (in market cap) back in 2015 and within the past two years has grown in value to be worth twice as much. Large department stores and the more traditional malls are closing but this is happening as retail spending continues to grow. Admittedly, online merchants have made it far easier, tap a button and our goods arrive at the doorstep the next day, but obviously at the expense of shop staff. The more comfortable we get with online retail the more intelligent we are shopping around and doing it ourselves. Is having the ease of service and renewed confidence a major influence upon why we are turning to index trackers and ETF’s rather than pay a money manager 2% to do it for us?

The ETF market has ballooned since the early 2000’s and is now worth approximately $2.5tn. With this “online” competition, the rumours are that the fees have been reduced to an almost nothing, with money managers taking just 20bp on the fund in the hope that they can make additional returns on the bid/offer spread. One of the problems we could face however, is that the derivative (ETF) becomes more liquid than the underlying. The relationship will work fine in an orderly market but will be tested in extremely or volatile conditions. The concern should be when will Market-Makers widen their spreads so just ensure you are not the last one to see the problems.

 



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Wealth Building Strategies

Here’s What’s Next for China!

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Posted by Mik Burnick - MoneyandMarkets

on Monday, 15 May 2017 14:24

Chinese stocks have dropped for four straight weeks to their lowest levels in seven months, following a government crackdown on financial leverage.

In fact, the Chinese policy-makers’ crackdown on leverage has already erased about $500 billion from the value of the Red Dragon’s stocks and bonds.

There’s no doubt in my mind that China’s credit boom was getting a little out of control. Take a look at this Bloomberg Intelligence chart.

WAVE-CHART

 

 

 

 

 

 

 

 

 

 

 

 

 

You can clearly see that since 2008, China’s total debt as a percentage of GDP has skyrocketed – from about 160% in 2008 to almost 260% in 2016.



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Wealth Building Strategies

An Amazingly Simple Investing Strategy

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Posted by Bill Bonner - Diary of a Rogue Economist

on Friday, 12 May 2017 08:05

investment-strategiesGUALFIN, ARGENTINA – As longtime Diary sufferers know, we don’t do real stock analysis.

We just look for Really Simple Patterns (RSPs).

The simplest we’ve discovered so far: If a market is cheap now, it will probably be less cheap before you get around to investing in it. If it is very expensive, it will probably be less expensive before you get out.

Simple Strategy

This RSP came to mind when Bonner & Partners analyst Chris Mayer, who advises us on our family portfolio, reminded us how much money we made on his latest recommendation.

For our family account, we keep one portfolio made up of country stock market ETFs. We select the countries based on this RSP: We look for the cheapest ones.

As recently as March 30, Chris advised us to put money into five cheap country stock market ETFs. And yesterday, imagining our delight, he sent us the following email update:

Amazing, it’s such a simple a strategy and yet works so well… 

So far (since March 30), you are up almost 10% in Turkey, almost 9% in Spain, 8% in Italy, and 5% in South Korea. The only downer is China, down 1%.

Overall, you’re up over 6%… since March. 

The only trouble is… we never got ourselves together to make the investment. And on April 15, we suddenly needed the money we had set aside for it to pay the IRS.

Trade of the Decade



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Wealth Building Strategies

The Oracle Speaks … and Here’s What We Learned

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Posted by Uncommon Wisdom

on Tuesday, 09 May 2017 07:47

2429P 1He’s the best investor in the world.

I know that may seem like just an opinion. But is it really an opinion given the remarkable — and unrivaled — track record of the Omaha of Oracle … the one-and-only Warren Buffett?

Now, I do have a few issues with Mr. Buffett. Some are with his politics and others with his investment strategy. Yet I’m also largely in agreement with him, particularly when it comes to his focus on buying good businesses cheap.

I also have intense respect for Buffett’s no-nonsense approach to buying companies he knows and understands … and avoiding those he doesn’t.

This approach has worked for his Berkshire Hathaway (BRK-B) shareholders over the years, and particularly recently.

BRK-B is up more than 100% in the last five years. Yet, Buffett missed out on a lot of big winners over that time.



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Wealth Building Strategies

Angst in America, Part 7: The Angst of the Millennial Generation

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Posted by John Mauldin -Thoughts From The Frontline

on Monday, 08 May 2017 13:41

170507 TFTF heroAre High Home Prices Turning American Millennials Into the New Serfs?
The Complacent Class
The Distortion of Time and Work
Orlando and SIC

“Being young and having no job remains stubbornly common. Wages for young people fortunate enough to get a job have gone down. Inflation-adjusted wages for young high school graduates were 11 percent higher in 2000 than they were more than a decade later, and inflation-adjusted wages of young college graduates (four years only) have fallen by more than 5 percent. Unemployment rates for young college graduates have been running for years now in the neighborhood of 10 percent and underemployment rates near 20 percent. The sorry truth is that a lot of young people are facing diminished job opportunities, even several years after the formal end of the recession in 2009, when the economy began to once again expand after a historic contraction.”



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