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The Best of What They Said and I Read Week Ending 6/28/2020

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

  

Bloomberg – June 27, 2020 – Zuckerberg Loses $7 Billion as Firms Boycott Facebook Ads – Siraj Datoo

  • “Mark Zuckerberg just became $7.2 billion poorer after a flurry of companies pulled advertising from Facebook Inc.’s network.  Shares of the social media company fell 8.3% on Friday, the most in three months, after Unilever, one of the world’s largest advertisers, joined other brands in boycotting ads on the social network. Unilever said it would stop spending money with Facebook’s properties this year.  The share-price drop eliminated $56 billion from Facebook’s market value and pushed Zuckerberg’s net worth down to $82.3 billion, according to the Bloomberg Billionaires Index. That also moved the Facebook chief executive officer down one notch to fourth place, overtaken by Louis Vuitton boss Bernard Arnault, who was elevated to one of the world’s three richest people along with Jeff Bezos and Bill Gates.”
  •  “Companies from Verizon Communications Inc. to Hershey Co. have also stopped social media ads after critics said that Facebook has failed to sufficiently police hate speech and disinformation on the platform. Coca-Cola Co. said it would pause all paid advertising on all social media platforms for at least 30 days.   Zuckerberg responded Friday to the growing criticism about misinformation on the site, announcing the company would label all voting-related posts with a link encouraging users to look at its new voter information hub. Facebook also expanded its definition of prohibited hate speech, adding a clause saying no ads will be allowed if they label another demographic as dangerous.  “There are no exceptions for politicians in any of the policies I’m announcing here today,” Zuckerberg said.”

 The Wall Street Journal – June 26, 2020 – Markets Bombed, Investors Carried On – Jason Zweig

  • “One of the biggest surprises in the first half of 2020 was what didn’t happen: Most individual investors, despite their reputation as nervous Nellies who sell into every panic, didn’t dump their stocks even when the market meltdown was at its worst…That suggests to me that sudden, shocking market declines—like Oct. 19, 1987, when stocks fell more than 20% in a day—are no longer enough to shake small investors out of stocks. The popular belief that stocks will always bounce back has acquired the force of religious faith. Only a bear market lasting for years is likely to be powerful enough to prod investors into questioning that faith.”
  •  “Almost 95% of the 5 million investors in 401(k) and similar retirement plans run by Vanguard Group didn’t make a single trade in the first four months of 2020. Fewer than 1% moved their money entirely out of stocks…From late February through the end of March, fewer than 3% of the 2.2 million participants in retirement plans run by T. Rowe Price Group Inc. made any changes to their portfolios…On Friday, Feb. 28, with stocks down more than 10% for the week, net trading in 401(k) plans was almost 16 times higher than normal, according to record-keeper Alight Solutions LLC in Lincolnshire, Ill. Nearly all the money moved out of stocks and into bonds or cash. However, that exodus amounted to only 0.27% of total assets.  For the entire quarter, investors shifted assets at triple the historical rate, says Alight—but those trades amounted to only 1.6% of their total balances.”

 U.S. Global Investors – June 26, 2020 – Frank Holmes

  • “…The major market indices finished down this week. The Dow Jones Industrial Average lost 3.31 percent. The S&P 500 Stock Index fell 2.86 percent, while the Nasdaq Composite fell 1.90 percent. The Russell 2000 small capitalization index lost 2.81 percent this week…The 10-year Treasury bond yield fell 5 basis points to 0.641 percent.”
  •  “…Germany is preparing to strike back if President Trump acts on his threat to intervene in the Nord Stream 2 gas pipeline. Chancellor Merkel is considering pressing for EU action against the U.S. The U.S announced potential tariffs on $3.1 billion of productions from Germany and other European countries, just as the EU is debating whether to maintain a ban on American travelers due to the spread of COVID-19. The Nord Stream pipeline under the Baltic Sea is designed to pump Russian gas to Germany and has created divisions among EU member states.”
  •  “Bloomberg reports the Trump administration is weighing new tariffs on $3.1 billion of exports from France, Germany, Spain and the U.K., adding to an arsenal of measures it is using against the EU that could spiral into a wider transatlantic trade fight later this summer. New tariffs on European exports could include olives, beer, gin and trucks, while increasing duties on products including aircrafts, cheese and yogurt, according to a notice published late Tuesday evening.”

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