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The Best of What They Said and I Read Week Ending 5/13/2018

Short excerpts from articles I found interesting.

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

Fortune – May, 2018 – Raise A Glass To Equities – by Brian O’Keefe

“Few things in life are better than fine wine.  That’s especially true when it comes to long-term investing.  As in really long-term.  According to the Credit Suisse Global Investment Returns Yearbook 2018, produced with data from the London Business School, over the past 118 years an investment in premium vino generated an average annual return of 3.7%  - better than gold, real estate, art, or even stamps.  The one asset class wine couldn’t beat:  stocks.  From December 31, 1899, through December 31, 2017, the author’s calculate, a basket of global equities from 23 countries returned 5.2% annually, U.S. stocks alone performed even better:  6.5% per year.   

U.S. Global Investors – May 4, 2018 – Investor Alert – by Frank Holmes 

“…The major market indices finished up this week. The Dow Jones Industrial Average gained 2.34 percent. The S&P 500 Stock Index rose 2.41 percent, while the Nasdaq Composite climbed 2.68 percent. The Russell 2000 small capitalization index gained 2.63 percent this week…Shares of MoviePass owner Helios & Matheson Analytics plunged 22 percent Thursday to a record low of $0.61. The company has lost 71 percent of its value over the last three trading sessions.”

“…The U.S. posted its largest monthly budget surplus on record in April, which the CBO said reflected stronger economic activity over the past year. Receipts in April totaled $510 billion, about 12 percent more than the same period last year, while outlays increased by 8.4 percent to $296 billion, the Treasury Department said. The monthly surplus was $214 billion, the highest on record dating to 1968.

U.S. small business optimism rose to 104.8 in April, versus the estimated 104.5. About a quarter of employers said they think it's a good time to expand.”

“…The price of bitcoin weakened Monday following negative comments by Warren Buffett and his longtime business partner Charles Munger at Berkshire Hathaway’s annual shareholder meeting. Buffett colorfully compared the cryptocurrency to “rat poison” while Munger commented that trading bitcoin is “just dementia.”  Buffett and Munger aren’t the only billionaires pouring cold water on digital currencies this week, reports MarketWatch.”

“Speaking to CNBC on Monday, Microsoft co-founder Bill Gates said that if there was an easy way to bet against bitcoin and other cryptocurrencies, he would. “As an asset class, you’re not producing anything and so you shouldn’t expect it to go up,” Gates said.…According to research from the San Francisco Federal Reserve, bitcoin’s decline following its climb to $20,000 was directly tied to the launch of a futures market in December 2017, reports Seeking Alpha. “It is consistent with trading behavior…the launch of bitcoin futures allowed pessimists to enter the market, which contributed to the reversal of the bitcoin price dynamics,” the report states.”

Barron’s  – May 12, 2018 – The Case for Shorting Tech and Buying India - by Leslie P. Norton

Clough: Emerging markets is the longest-lived theme and was a big driver last year. Hundreds of millions of people are getting to a level where they have disposable income. It’s our single largest exposure right now.”

“…We are even more positive about India, because the economy is in an earlier and more rapid stage of growth. The current government, headed by Prime Minister Narendra Modi, removed currency from the economy and forced households to open bank accounts. Now they can access credit. His bankruptcy reform law, which directed that bankruptcies be wrapped up in 18 months, is cleaning up the banks. And finally, the Goods and Services Tax is a major improvement. Under the former tax regime, trucks lined up at state borders for days to calculate and pay taxes. Now they can drive across India without stopping. Companies can build larger, more efficient facilities. We suspect productivity will move up sharply, and productivity and profits are highly correlated. India will also see a housing boom: “Housing for All by 2022” is a new government campaign.”

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