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The Best of What They Said and I Read week ending 2/5/2017

Short excerpts from articles I found interesting.

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


U.S. Global Investors – Investor Alert – February 3, 2017 – by Frank Holmes

  • “According to Reuters, a three-day meeting in Philadelphia between President Trump and congressional Republicans ended in a stalemate, with it looking less and less likely that tax reform will happen during Trump’s first 100 days in office—perhaps even the first 200 days.”
  • “…Meanwhile, Trump’s seven-nation travel ban has received a lukewarm—and, in some cases, hostile—reception from many in the business world who have traditionally depended on foreign talent. That’s especially the case in Silicon Valley, where close to 40 percent of all workers are foreign-born, according to the 2016 Silicon Valley Index. (Around the same percentage of 2016 Fortune 500 companies were founded by immigrants or children of immigrants, including Steve Jobs, whose biological father was Syrian.).” 
  • “I’ve shared with you before that the media often take Trump literally but not seriously, whereas his supporters take him seriously but not literally. I think it’s evident that the market is finally coming to terms with the fact that Trump, unlike every other politician before him, actually meant everything he said on the campaign trail, including his more protectionist and nationalist ideas.”


The Wall Street Journal – Trump Moves to Kill Off Obama’s Landmark Retirement Rule – February 3, 2017 by Lisa Beilfuss and Michael Wursthorn

  • “President Donald Trump has begun killing off an Obama-era retirment savings rule unpopular with Republicans and some financial-industry executives who say it would harm consumers more than help.  The so-called fiduciary rule, six years in the making and unveiled by the Labor Department last spring, holds brokers and advisers who work with tax-advantaged retirement savings to a fiduciary standard as opposed to the previous suitability standard. That means they must work in the best interest of their clients and generally avoid conflicts, which can come about with the commission-based compensation common among brokers and insurance agents.”
  • “…The rule was long fought between the industry and the government. The Obama administration, in pressing for the rule, said conflicted advice costs American families $17 billion a year and pushes down annual returns on retirement savings by a percentage point. Many financial-industry leaders have said those figures are inflated and have fought against the regulation. Consultancy AT Kearney projected that the rule would result in as much as $20 billion in lost revenue for the industry, about 7% of total revenue in 2015.
  • “…Critics have long contended that the rule would punish smaller savers in the form of less access to financial advice and heftier fees for those who trade infrequently. While a fee-based model eliminates conflicts of interest that commissions can usher in, some savers may find themselves paying more in fees than they have in commissions.”


Barron’s – Dow Holds On to 20,000 – by the Skin of Its Teeth – February 4, 2017 by Ben Levisohn

  • “All told, the blue chips finished the week close to where they began, down 22.32 points, or 0.1%, at 20,071.46. The Standard & Poor’s 500 index and the Nasdaq Composite both ticked up 0.1%, to 2,297.42 and 5,666.77, respectively.
  • “Many investors appear to assume that the next market move will be higher and that they will be able to see the next downturn “coming a mile away,” says Adam Parker, chief U.S. equity strategist at Morgan Stanley. “We are worried there is a potential arrogance in adopting this view.” He points out that just over a year ago, stocks were still trying to find a bottom following a plunge that left nearly everyone shell-shocked—and that the S&P 500 has gained 20% during the last 12 months. “How can anyone be more bullish now?” Parker asks.  It’s a good question.

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