Posts by Rick Newman
Rick Newman at Yahoo Finance 13 hrs ago
Investors may be salivating for a piece of Saudi Aramco when the kingdom of Saudi Arabia sells a small chunk of its gigantic state-owned oil company, probably in 2017. But potential buyers ought to beware.
“I think they’re hedging the uncertainty that their oil is going to be worth less,” Matthew Weatherly-White, founder of the Caprock Group, tells me in the video above. “Even more dramatically, there might be stranded carbon assets they own, and by that I mean assets that are simply worth nothing.”
Oil producers have already endured an enormous shock during the last two years, with the benchmark price for Brent crude plunging from $115 a barrel in 2014 to about $30 earlier this year, and now rising back to around $45. The oil bust has caused severe stress for oil producers such as Russia and Venezuela, and caused Saudi Arabia, the world’s largest oil producer, to rethink its priorities.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .
Rick Newman at Yahoo Finance 2 days ago
Some Americans are so upset about the prospect of a President Donald Trump that they’re threatening to inundate Canada with a wave of U.S. refugees come November. But Warren Buffett won’t be one of them.
When asked at the Berkshire Hathaway (BRK-A) annual meeting if Donald Trump might harm his company's interests if elected president, the famous CEO said, "this won't be the main problem," as thousands in attendance guffawed.
"If either Donald Trump or Hillary Clinton becomes president, and one of them is very likely to be, I think Berkshire will continue to do fine," Buffett added. He then reflected on the way his business and many others have survived all manner of regulation, meddling and turmoil.
“In my lifetime," he continued, "GDP per capita in real terms has gone up six for one ... I’m confident that 20 years from now there will be far more output per capita than there is now. No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can't end it."
There are a lot of Tesla (TSLA) enthusiasts, but also some determined skeptics. Anton Wahlman is one of those with major doubts about the innovative electric car company.
Wahlman, a former equity analyst who’s now a private investor in Silicon Valley, recently ordered 20 Model 3 sedans using Tesla’s online order form. The Model 3, due in late 2017 or early 2018, is supposed to be the company's mass-market car, starting around $35,000, that will finally give Tesla the volume it needs to become definitively successful. Up till now, Tesla has wowed customers and critics but failed to turn a profit.
The Model 3 seems well on its way to becoming a huge hit, given that customers have placed orders for more than 400,000 of them, according to Tesla. If all of those orders turned into sales, the Model 3 would outsell perennial favorites such as the Honda Accord and Toyota Camry.
But some skeptics feel those 400,000 pre-orders may be misleading—which is why Wahlman ordered 20 Model 3s. Tesla says there’s a two-car limit per person on the Model 3, a rule Tesla CEO Elon Musk has referred to himself.
While a small pocket of contrarians argues that climate change is phony, a lot of others are trying to look around the corner and figure out how to adapt to it—and even profit from it.
The market, in fact, seems to be betting that the carbon economy is in long-term decline, with coal stocks especially battered and coal mining giant Peabody Energy declaring bankruptcy recently. Oil firms are reeling as well, thanks to the low price of crude and new efforts in many countries to regulate carbon-based energy and spur cleaner alternatives.
That might sound far-fetched, but a warmer planet will open new land to farming, while rendering once arable land too parched to grow anything. “There are investors who are acquiring land in northern Canada with the expectation that eventually you’ll be able to grow crops,” Weatherly-White says. “If you extend the growing season incrementally on both ends, suddenly you can start growing stuff.”
If running for president were a business, Donald Trump, Inc. would have the biggest profits and the lowest costs.
Trump is rewriting the rules for how to mount a compelling bid for president, and part of the disruption involves the amount of money required to win. Under the old rules, a successful presidential campaign required hundreds of millions of dollars in funding from rich donors, much of it going to super PACs. Trump is winning with far less, proving that money doesn’t necessarily win elections.
It’s no secret that Trump’s entertaining bluster earns him hour upon hour of free airtime, which most other candidates would have to pay for. But with the primary election season now 80% over, it’s also possible to quantify the Trump Effect and determine what his unique blend of fame and notoriety is really worth.
So Yahoo Finance tallied the campaign spending for each candidate, along with the delegates and votes each has won, to see who’s spending their money most effectively. Here are the numbers for each candidate who has won at least one delegate:
Rick Newman at Yahoo Finance 5 days ago
They buy homes. They purchase cars. They take vacations. The millennials, it turns out, are pretty much like every other generation of the last 70 years.
It’s a good thing they are, because the nation’s future rests on their shoulders, and it’s a weighty burden. The $19 trillion national debt is now 105% of GDP, the highest portion since the 1940s. Medicare is on track to run short of money in 2030. Somebody needs to create the wealth that will keep America humming for the next 50 years, and while they’re at it, figure out how to keep humans employed and prosperous as robots continue their march to dominance.
There are 75.4 million Americans between the ages of 18 and 34, which means millennials just became the most populous generation in the country. And their ranks will swell to roughly 81 million by the 2030s, according to Pew Research, on account of immigration. The baby boomers, by contrast, number 74.9 million, and their numbers will steadily decline, as immortality eludes them and they begin to die off.
Rick Newman at Yahoo Finance 5 days ago
Money is more likely to buy happiness than to buy a presidential candidate friendly to Wall Street this year.
Donald Trump’s convincing sweep of Pennsylvania, Maryland and three other northeastern states this week puts him within shouting distance of the GOP presidential nomination. He must still win a couple of tough contests – Indiana, California – but the feckless stop-Trump movement seems to be crumbling. Trump might even win the nomination outright instead of dickering for delegates at the Republican national convention in July.
Hillary Clinton is even more certain to be the Democratic presidential nominee, now that Bernie Sanders’ impassioned leftward challenge has petered out. Sanders has won an impressive 17 out of 40 states so far, proving the appeal of his populist message vilifying big banks. But Sanders is effectively eliminated in the delegate count that will determine the Democratic nominee.
Rick Newman at Yahoo Finance 7 days ago
The indomitable American shopper used to power the world economy. It was nice while it lasted.
One of the most telling signs of the new normal in the U.S. economy is Americans’ attitudes toward saving money. Ten years ago, saving was like making your bed or changing the oil in your car on schedule: Nice to do but hardly essential. During the brutal recession that began in 2007, people got more serious about saving. But as the economy recovered, Americans didn’t return to their old shopping habits, which amounted to spending almost their entire incomes, month after month. Instead, they decided to save even more.
This poll from Gallup shows the startling surge in Americans’ preference for saving over spending:
Americans don’t always do what they say they want to do, and the saving rate hasn’t soared the way the intention to save has. Here’s the percentage of disposable income people actually save, going back to 1940:
Rick Newman at Yahoo Finance 7 days ago
When was the last time you wondered about the Paperwork Reduction Act? Probably never, but if you’re Sam Batkins, you think about it quite a lot.
Batkins is director of regulatory policy at the American Action Forum, a center-right think tank that focuses on the regulatory burden the government imposes on businesses and individuals. And he has long wondered how many different forms Uncle Sam requires people to fill out. So recently, he decided to count them, which is possible by scrolling through online data the Office of Management Budget is required to publish.
Since you’re dying to know – 23,000. That’s the number of forms all the various federal agencies require people to fill out. Some of those are tax forms many of us are familiar with. But there’s also an immense amount of info the government collects on topics ranging from the moisture content of prunes to teen-dating habits to the comfortable and uncomfortable feelings of school kids.
1995: 24.5 hours per person
2000: 25.8 hours per person
2005: 26 hours per person
2016: 33.3 hours per person
Here’s a breakdown of the total number of forms used by agency:
Rick Newman at Yahoo Finance 10 days ago
Ever hit a deer? If not, consider yourself lucky. And if you have, you know it can be surprisingly traumatic—and total your car, in the bargain.
Autoliv (ALV), an automotive supplier, thinks it has technology that can reduce the 1.1 million collisions between cars and deer on American roads every year. A new night-vision system for cars uses infrared sensors to highlight objects in the road at night, far before headlights illuminate them. Like military systems that allow troops to see in the dark on a battlefield, automotive night vision relies on an infrared camera that generates thermal images of what’s ahead, with animals, pedestrians, and cyclists glowing more brightly than what’s around them.
Like most technology, automotive night vision ought to get cheaper as more people try it out. “You’ll see it arriving on some mid-level models by 2017,” says Stuart Klapper, a managing director at Autoliv. Other common technology, such as power windows, anti-lock brakes and airbags, arrived in the automotive fleet the same way—gradually starting on the most expensive models and eventually trickling down to the whole market.