Investors in funds purporting to buy companies focused on "environmental, social, and governance," (ESG) issues, are paying much higher fees than those buying market index funds. The ESG funds are funnels for the follies of CEOs with big EGOs, who want to mold the world in their image using investors' money to give them power. Now, mega-ESG pusher BlackRock, has reported a 23% profit increase for the quarter, ahead of anyone's expectations. You know what powered those profits? Fees on actively managed funds, like ESG. Dawn Lim reports for The Wall Street … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
FOLLOW THE DRUG MONEY: America’s Broken Healthcare System
You really can’t make this stuff up. Do we need yet another example of how our healthcare system is broken? Just follow the money. Not that I’m buying into this cure-all pill. Alex Berenson writes on his Substack: Yes, molnupiravir - a pill to treat Covid - seems to reduce hospitalizations and deaths, assuming Merck’s press release from last week holds up. But it is yet another story of the US health care system and drug development gone awry. A Miami hedge-fund manager and his wife - Wayne and Wendy Holman - are likely to make hundreds of millions of dollars, possibly billions, on it - … [Read more...]
CHEERS, JEERS, AND TEARS: Facebook Failure Elicits Varied Emotions
Facebook, and its associated properties, Instagram, WhatsApp, Facebook Messenger, and Oculus, were all down for about six hours yesterday. Not everyone was unhappy about the outage. Conservatives who have been harangued on the site for months certainly felt a sense of schadenfreude as they watched their foe, Mark Zuckerberg, lose billions of dollars in value on his Facebook holdings. Scott Carpenter reports for Bloomberg that Zuckerberg lost $6 billion in hours. He writes: Mark Zuckerberg’s personal wealth has fallen by more than $6 billion in a few hours, knocking him down a notch on the … [Read more...]
Why Bond Mutual Funds and ETFs No Longer Work
OK, third-quarter report cards are in, and investors want to know how they did. But perhaps just as important, they want to know the WHY behind the performance. When it comes to mutual funds and ETFs, there’s a better way to go, especially when it comes to choppy markets, which have been tough as of late. Why are bond prices down? Because interest rates have risen just a tiny bit, and bond prices move in the opposite direction of rates. Over the quarter, especially the last few weeks or so, interest rates have risen enough to lower prices for bonds this quarter. But we’re talking about a … [Read more...]
BREAKING: Game Changer for ANNUITIES and Life Insurance
You know it’s no fun getting homework, especially on a Friday. But this is too important to let the weekend go by without thinking about what I’m about to write. Because every now and then, there’s a piece of research or an article that’s a game-changer, like this chart below, showing you the madness in the stock market and probably in your mutual funds and ETFs. But that’s not my focus today because this week, I read one of the most important articles I’ve ever read on annuities and life insurance, two areas Your Survival Guy eschews and treats like rat food, that the article deftly … [Read more...]
This Chart Belongs on Your Fridge and More…
Have markets all gone mad? Take a look at this chart. It shows you how many stocks in the S&P 500 are trading at more than ten times sales. It’s a shocking display and may go down as the poster child chart for today’s madness. This chart needs to go on your fridge. Speaking of your fridge, how’s your lazy cash doing? Is it eating all your leftovers, drinking your milk, and not doing the dishes? Hey, I get it. We all have cash that’s lazy, and sometimes it needs a little tough love. But be warned, there’re plenty of scoundrels out there looking to "take the pressure off of you,” and … [Read more...]
You Won’t Believe How Tame the Dot Com Bubble Looks
Check out the number of S&P 500 stocks trading at more than ten times their sales. I’m not talking about ten times earnings. This is sales. You know, the price you pay for your house, your groceries, your heating bill—not the profit the company selling to you hopes to make. Imagine if the world you and I live in was priced this way? It would make inflation look like a drop in the bucket. Well, that’s how these companies that index funds are buying hand-over-fist are priced. Look at the number of S&P 500 stocks trading for more than ten times their annual sales on the chart below. … [Read more...]
THE NEXT BIG SHORT: Paulson Predicts Crypto Will Go to Zero
You may remember hedge fund manager John Paulson from the movie The Big Short. He was the one that couldn’t believe what was happening in the real estate market and believed the system would implode. He was right. Now he’s dead against cryptocurrencies, much like Your Survival Guy. In a recent interview with Bloomberg's David Rubenstein, Paulson described cryptocurrencies as "a limited supply of nothing." He also predicted the speculative asset would go to zero. The NY Post reports: Hedge fund manager John Paulson made $20 billion predicting the downfall of the US housing market in 2008. … [Read more...]
Can We Still Afford the Riverboat Cruise?
Are you falling for the oldest trick in the book? Here’s how it reads. Managers today draw you in with low-cost index funds and past performance—not necessarily in that order. Then, once you’re in the door, they sell you on other stuff, like toxic variable annuities, until you’re blue in the face. It’s hard not to fall for the sales pitch. I get it. Here’s what happens. It’s Sunday morning. You don’t have a care in the world. Frank Sinatra is playing in the background. Life is good. Then you peel open the quarterly funds report in the Journal and look at the performance like a box score … [Read more...]
IT’S A GAMBLE: First Bitcoin ETF Will Be Loaded with Risk
Fund companies are racing hard to be the first to offer a bitcoin ETF. The Wall Street Journal's Michael Wursthorn reports on the risks of such funds, writing: Despite the additional safeguards, investors in such funds would have to deal with issues associated with trading futures, as well as the risks around cryptocurrencies. Todd Rosenbluth, head of ETF and mutual-fund research at CFRA, warned that futures-based ETFs rarely replicate the performance of the underlying market they track. The reason is pricing fluctuations between futures contracts and the spot market, especially if demand … [Read more...]
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