Keep It Small: Analyzing Bill Ackman’s Approach

Keep It Small: Analyzing Bill Ackman’s Approach

There’s no such thing as the perfect investor. No one exists who knows with absolute certainty which companies are good, which are bad, and when to buy or sell them. Perfection may not be possible, but we attempt to get as close as possible by never resting on our laurels and studying different investment styles to get a better idea of what works and what doesn’t… Read full article at Seeking...
Best Companies To Invest In For ‘The Internet Of Things’

Best Companies To Invest In For ‘The Internet Of Things’

Best Companies To Invest In For ‘The Internet Of Things’The Internet of Things. A somewhat nebulous and colorless title for a concept that could revolutionize the world in much the same way the internet originally did. The idea is that everyday objects will be interconnected and able to identify themselves to other devices.The best way of explaining IoT is with examples. Picture a power generator that’s able to let maintenance know when there’s a problem without first being inspected, or remote monitoring systems that enable home automation – imagine your appliances being connected via wi-fi enabling it to download updates and ensure smooth operations. Recent additions to the IoT include automated car sensors that activate brakes when objects enter a field of range and bio-chip implants in farm animals to make them easy to track and catalog.The Internet of Things is in its infancy and yet we can already see the impact it’s having on the world. Mobile payments allow consumers to pay for basic services like fast food by simply tapping their phone, building on technologies like RFID, near-field communications, QR codes, and digital watermarking. Applications in environmental monitoring, infrastructure management, and medical and healthcare systems are revolutionizing the way we go about our day-to-day lives, and the long term benefits could be exponential.ABI Research indicates that there are over 10 billion devices connected in the world wirelessly with more than 30 billion expected by 2020. Gartner, Inc. says that the IoT will grow to 26 billion units installed by the same year resulting in a global economic value addition of $1.9 trillion. This expectation far outstrips the...
How Consumer Spending And Economic Growth Is Linked

How Consumer Spending And Economic Growth Is Linked

How Consumer Spending And Economic Growth Is Linked Anyone who’s paid attention to Wall Street for more than a few hours knows that the media loves to speculate on what the latest economic reports mean for the markets. Everything from job numbers to housing starts to consumer spending is discussed and analyzed until opinions (often contradictory) are given as to what it means for the future. While some indicators are considered more meaningful than others, one finds itself among the most looked at figures and seems to spark the most contention: consumer spending. It’s not without good reason. Even freshman year economic majors know how important spending is to an economy, but citing figures alone and drawing conclusions is an oversimplification of a dynamic process that fuels economic growth. A Brief History of Economic Growth and GDP Before we take a look at how consumer spending and the economy are linked, let’s review how growth occurs in the economy. The textbook definition of growth is an increase in the capacity of the economy to produce goods and services. Several factors are responsible for influencing economic growth: Investment – An increase in investment means an increase in productivity. Investing requires a decrease in spending so that more money is available for investments. Innovation – Technology can radically alter the economic landscape. When more output is able to be generated from the same amount of input, productivity increases. Increased Specialization – The division of labor means that more efficiency occurs when workers specialize. This increase in efficiency means greater output will be generated. Increased Input – The more workers or machines...
Portfolio Hedging: Myths and Misconceptions

Portfolio Hedging: Myths and Misconceptions

In the world of finance, hedging is often thought of as a bad word. Banking failures and hedge fund bankruptcies have cast it in a bad light and left a bad taste in the mouths of investors who have experienced such disasters first-hand. Despite the negative press, hedging is actually a risk-reduction strategy used to create a safety net for investments.Most people might not be aware of it, but hedging is a concept we use in our everyday lives. If you own an automobile, you probably have it insured to protect yourself from unforeseen losses. The same thing goes for any type of insurance whether it’s for your home or even for yourself with a life policy, you’re hedging against loss.Hedging in the stock market is simply taking out insurance on your positions. In other words, if you’re bullish on a stock that you own, you may want to sell a covered call just in case of a pull-back. As with all hedging, you tend to reduce your total upside potential unlike just going “all-in,” but you also limit your downside risk making your portfolio more stable.A Closer Look At Professional Money Management: Hedge FundsHedge funds are touted as the ultimate portfolio designed to profit in any type of market condition while also reducing overall risk. They invest in multiple asset classes such as equities, bonds, options, currencies and more, making them more flexible when it comes to repositioning money and weathering unexpected market events. Because they are managed more intensely than other products and engage in sophisticated strategies, only accredited investors – generally defined as an individual with...
The Real Impact of Global Crises

The Real Impact of Global Crises

Experienced investors understand how to allocate their money in a way that elicits the best opportunity for appreciation without taking on too much risk. Careful considerations regarding asset allocation, risk tolerance, due diligence, and stock selection are taken into account when designing a portfolio. Long term mindsets mean that sophisticated investors don’t panic during market corrections and they doggedly stick to their plans whether the business cycle is cresting or sinking to a trough. However, when the unexpected happens that sends ripples throughout the global marketplace, even the most steely-eyed investor can find themselves second guessing their entire portfolio and make poor trading decisions.It’s impossible to know when a global crisis will occur, or how it will ultimately affect the marketplace before it happens. Crises have many names and come in the form of natural weather phenomena to man-made conflicts and wars. When breaking news occurs, trading jumps in volatility as traders attempt to manage perceived risks but the real impact of these events is often far removed from how Wall Street acts.The Many Faces of CrisisA crisis, whether small or large, can have far-reaching consequences that may be hard to pinpoint until after they happen. An oil spill in the East China Sea will understandably impact oil prices and energy stocks but could also affect many other industries. Local economies that rely on fishing would be hurt and shipping lanes could be closed down which would impact international trade. The expense of cleaning up the spill would affect multiple countries in the region like China, Japan, Korea, and many others would take money away from other potential uses...