Posts by Rick Newman

  • Rich GOP donors blow another $63 million

    Rick Newman at Yahoo Finance 10 hrs ago

    Money might be hard to come by in many parts of America, but it’s cheap in the 2016 election. Wealthy Republican donors have given nearly $400 million so far to presidential candidates with zilch to show for their efforts, including at least $63 million donated to super PACs supporting the latest GOP dropout – Sen. Ted Cruz.

    Cruz quit the race after losing the Indiana primary election to Donald Trump, who has nearly locked up the GOP presidential nomination. With nine primary contests left, Trump now seems all but certain to win enough delegates outright to clinch the nomination, leaving no path for rivals.

    Cruz enjoyed the support of a small number of rich donors willing to commit large amounts of money to his cause. New York hedge-fund manger Robert Mercer of Renaissance Technologies donated at least $13 million to a Cruz super PAC, allowed to accept unlimited donations, called Keep the Promise I. Toby Neugebauer, a Texas energy investor and son of a member of Congress, gave another $10 million to a second super PAC called Keep the Promise II.

  • These hedge funders are dismayed at the presidential race

    Rick Newman at Yahoo Finance 23 hrs ago

    There’s much talk of politics at the Milken Institute’s annual gathering of business leaders in Beverly Hills. And a lot of head-scratching about the state of the presidential race, especially the surprise success of the leading Republican presidential candidate, Donald Trump.

    “I’m a little confused,” hedge fund titan Steven Cohen of Point 72 Asset Management responded when asked on a panel discussion what he thought of the presidential campaign. “I’m not sure what to do and as the campaign goes on, I’m hoping it maybe reveals itself in one direction or another.”

    Cohen donated a small amount of money to Chris Christie’s campaign, but like many members of the business establishment, he now finds himself in the perplexing position of having no pro-business candidate to support. Business leaders typically prefer Republicans, of course, and former Florida Gov. Jeb Bush was corporate America’s early favorite, raising more than $150 million before he dropped out.

  • These 1 percenters think America is broken, too

    Rick Newman at Yahoo Finance 23 hrs ago

    The attendees at the Milken Institute’s annual conference in Beverly Hills are the undisputed winners in a globalized, digitized, do-more-with-less economy. Yet even many of them feel something is deeply wrong in America.

    “I believe very much in free enterprise, but modern American capitalism is not working for the majority of Americans,” Democratic Sen. Mark Warner of Virginia said at the conference. “The country needs a big win.”

    Such Trumpian rhetoric is surprisingly commonplace at this year’s gathering of top business, finance and political leaders, perhaps because the presidential campaigns of Republican Donald Trump and Democrat Bernie Sanders have generated glaring bipartisan evidence of how angry millions of Americans are. That may not show up in Wall Street bonuses or hedge-fund profits, but the world’s money mavens seem to be getting the message all the same.

    Business could do more, too. “I get a little tired with the business community bitching about Washington but then never wanting to get their hands dirty,” Warner groused. “If you don’t engage, you turn the keys over to the extremists. That’s not going to fix it.”

  • The Saudis may know something about oil the rest of us don’t

    Rick Newman at Yahoo Finance 2 days 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 .

  • Warren Buffett isn’t worried about President Trump

    Rick Newman at Yahoo Finance 3 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."

  • This guy ordered 20 Tesla Model 3s – but not to buy them

    Rick Newman at Yahoo Finance 4 days ago

    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.

  • Why the smart money is eyeing "farmland in Siberia"

    Rick Newman at Yahoo Finance 4 days ago

    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.”

  • In delegates per dollar, Donald Trump crushes the field

    Rick Newman at Yahoo Finance 5 days ago

    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:

  • The millennials are coming to save America (thank goodness)

    Rick Newman at Yahoo Finance 6 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.

  • It’s time for Wall Street to start worrying

    Rick Newman at Yahoo Finance 7 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.