Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

 

The Economist – A minivan of Mammon – Are eight men as wealthy as half the world’s population?   – January 21, 2017

  • “Every ten minutes, black Volkswagon shuttle vans ferry delegates from their hotels in Davos, Switzerland, to this year’s World Economic Forum, held from January 17th to 20th.  If you could squeeze the world’s eight richest men into one of these vans, they might feel cramped.  But they could comfort themselves with an extraordinary statistic:  according to Oxfam, a charity, they own as much wealth ($426bn) as half the world’s population combined ($409 bn).”
  •  “To make this striking calculation, the charity draws on data from Forbes magazine, which lists the wealth of the billionaires, and Credit Suisse, which estimates the smaller holdings of everyone else, thanks to painstaking work by three scholars of wealth, Anthony Shorrocks, Jim Davies, and Rodrigo Lluberas….” 

 

The Wall Street Journal – One Stat That Shows a Trump Bull Market Is Unlikely – January 23, 2017 by Justin Lahart

  • “…After the stunning Obama bull market, it is no surprise that it will be tougher for stocks to register more big gains during the Trump years.  The main reason is that Barack Obama took office after the market had tanked and was cheap, but another important reason is what happened to corporate profits versus the overall economy.”
  •  “Through his last full day as president Thursday, Mr. Obama oversaw a 166% gain in the S&P 500.  Shares went from being dirt cheap to richly valued.  The S&P traded at 11 times expected earnings when Mr. Obama took office.  Now its forward price/earnings ratio is 17 – less dear than the 28 registered during the dot-com bubble but still pricey.  To better gauge the market’s future returns, investors should look at another measure of valuation:  At the end of last year, the total value of U.S. stocks was an estimated 169% of gross domestic product.  That compares with 85% at the end of 2008 and is approaching the 177% valuation the market hit at the end of 1999.”

 

U.S. Global Investors – Investor Alert – January 27, 2017 – by Frank Holmes

  • “A theme I’ve written and spoken about frequently is the emergence of new investment opportunities as more and more Chinese citizens join the middle class and build disposable incomes. The size of the Asian giant’s middle class has already exceeded that of America's. Looking ahead 10 years, the number of Chinese households with incomes over $35,000 is now expected to surge 300 percent, from 40 million today to 160 million by 2025…these new middle-class Chinese consumers “will demand more of the services and higher-end products that American companies export.  As China’s middle class expands, we expect demand for American-made goods and services to rise as well,” the economic advisory firm writes.”
  •  “Among those goods are advanced-technology products (ATPs), made in American industries such as robotics, aerospace, electronics and pharmaceuticals. Chinese demand for such goods has indeed risen, from less than 24 percent of total imports in 2002 to close to 34 percent in 2016. However, the U.S. has been losing market share in exporting ATPs to China, according to a report this week from BCA.”
  •  “…The major market indices finished up this week.  The Dow Jones Industrial Average gained 1.34 percent. The S&P 500 Stock Index rose 1.03 percent, while the Nasdaq Composite climbed 1.90 percent. The Russell 2000 small capitalization index gained 1.40 percent this week…The Dow Jones Industrial Average closed above 20,000 on Wednesday for the first time in its 120-year history.”