What Was Wrong at Kraft Heinz?
Last week the stock of the packaged food giant, Kraft Heinz, took a nosedive. The stock fell by 28% on news of a SEC investigation of the company’s accounting practices but more so the nosedive was due to gigantic losses in the last year. The package food business is very competitive and companies need to balance quality, price, advertising, and new product lines in order to stay competitive as much so as to gain an advantage. What was wrong at Kraft Heinz was that they seem to have lost their way. Cost cutting became the order of the day in […]
Panic Buying of Investments Is a Bad Sign
A friend of ours commented recently that panic buying of investments is a bad sign. He is old enough to remember when the three Hunt brothers tried to corner the silver market and failed.
Panic Buying of Silver in 1979 to 1980
The boom and bust of silver prices is remembered as Silver Thursday, March 27, 1980. Silver was trading at around $6 an ounce in early 1979 and as the brothers purchased increasingly larger amounts of silver on margin, the price rose to $49.45 by January 18, 1980. By that time the three Hunt brothers controlled a third of all silver […]
Time to Invest in GM?
General Motors was once the largest corporation in the world and the king of U.S. auto makers. Foreign competition ate away at its customer base and profits and the financial crisis dealt the final blow. In 2009 the once-king of U.S. automakers filed for Chapter 11 bankruptcy protection with US$172.81 billion in debts and US$82.29 billion in assets. The company divested itself of numerous assets keeping the Chevrolet, Cadillac, GMC, and Buick brands as well as controlling interests in numerous foreign automobile operations. After reorganization, the new GM emerged in a $20.6 Billion IPO in November of 2010. Any money […]
Win the Trade War and Lose on Your Investments
The trade negotiations between the USA and China are coming to a head. Will there be genuine gains for the USA? We have written how both the USA and China have issues that they see as crucial to their national prosperity and security in our article about if the trade war becomes permanent. However, neither side wants to suffer the economic pain that could come out of a protracted trade war. China, especially, is seeing economic difficulties on the horizon and needs to do something sooner rather than later. So, there may well be a deal forthcoming. However, from the […]
How Do Job Cutbacks in China Relate to Your Investments?
China has been the economic miracle of the world for decades. From Nixon’s visit in 1972 to its entry into the World Trade Organization to the current day, China has not had a negative growth year since 1978 and has average a 10% GDP growth rate. At the same time North American and Europe are ecstatic with an occasional 5% growth rate and typically languish in the 2% to 3% range. But, things are not all well in the Land of Managed Capitalism (by the Communist Party). Debt is rising and there is a potential for a long term trade […]
Choosing Deep Value Investments
Many investors are pessimistic about the prospects of their investments in the coming year. In this regard we are looking at the process of choosing deep value investments. We see the pessimism in that stocks are rising on tepid earnings reports as The New York Times reports.
Late last month, chip giant Advanced Micro Devices reported disappointing financial results for the fourth quarter and warned that its first quarter performance would be weaker than expected. The stock surged 20 percent. A couple of days later, General Electric reported one of its skimpiest quarterly profits of the century, badly missing analysts’ forecasts. […]
Trump Tax Cut a Bust for Investment and Hiring
When Congress passed the biggest change in the U.S. tax code in thirty years, taxes were cut by $1.5 Trillion. The promise was that U.S. industry would invest that money, hire more people, and raise yearly GDP growth to the 4% range for the indefinite future. That did not all seem to have happened according to recent information. Was the Trump tax cut a bust for investment and hiring? Here are some thoughts on the subject.
Trump Tax Cut a Bust for Investment and Hiring
Fortune explains why the tax cut has not sparked hiring or investment.
The Trump administration’s $1.5 trillion in […]
Why Would You Want to Invest Offshore in Brazil?
Not that long ago Brazil was touted as one of the BRICs nations. Along with Russia, India, and China and it seemed destined to join the ranks of the most developed and prosperous economies within just a decade or two. Brazil was considered a model for developing nations as employment soared, poverty was reduced, and safety net social programs helped stabilize their society. Then prices for oil and other commodities collapsed. Much of this had to do with China importing less as well. Nevertheless, Brazil was not equipped to moderate its social programs. And, on top of that, investigators uncovered […]
Why Does Dividend Growth Investing Work So Well?
Among the more successful approaches to long term investing, dividend stocks provide a steady income stream as well as the ability to reinvest without paying fees. When evaluating dividend stocks to add to their portfolios, wise investors look for a long history of continual dividend payments and a steady stream of dividend increases. When you use this approach as your guide, it is referred to as dividend growth investing. Why does dividend growth investing work so well? Here are some thoughts on the subject.
Why Does Dividend Growth Investing Work So Well?
We have three simple answers to this question. They have […]