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The Definitive Investment/Finance/Economics Thread

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atbell

TRIBE Member
My rule of thumb for the past 3 years has been "if returns are based on the US economy or the US dollar doing well, it is a bad investment"

That's produced about 15% return per year on the places I've squirled savings away.

My other rule, which I don't follow enough, is based purely on sci-fi literature and is simply "DON'T PANIC" (or was that "Always know where your towel is"?)
 

AdRiaN

TRIBE Member
judge wopner said:
but does a dutch guy sell you OSB?
True, but you ain't gonna find this kind of scenery in Dutchland:

osb2006cover_en.jpg
 

Boss Hog

TRIBE Member
How many of you guys actually know what you're investing in or do you pay someone to help make decisions for you?

And either way, do ethics come into play or is the bottom line the dollar?

Nice loaded question there.
 
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atbell

TRIBE Member
Boss Hog said:
How many of you guys actually know what you're investing in or do you pay someone to help make decisions for you?

And either way, do ethics come into play or is the bottom line the dollar?

Nice loaded question there.

I do all my own work. I tend to read on a macro scale so that's how I invest, in industries or sectors.

Ethics comes into play in a small way. I don't like weapons companies, cigarette companies, and direct marketing. If the funds I choose have heavy weightings in any of these things I'd avoid them.

I have this hunch that in the long run unethical businesses are going to get found out and will crash, it's just a matter of time.

As a side note, the Norwegian Government pulled money from the state controlled pension fund from 10 companies that produce parts for nuclear weapons, now that's some ethical investing.
 

Bernnie Federko

TRIBE Member
just noticed this thread...

I was listening to the television over supper this evening while Fred Langan was reporting on Guy Rothchild's death; he went on to quote one of Guy's forefathers famous lines about investing - (which was...) "I made my money selling too soon".

Food for thought

:)
 

Gfunkdiva

TRIBE Member
I have a bunch of ethical mutual funds through my credit union, and they're making mad profits right now, like in the 22% range. I don't pay that much attention to it, but if I can go ethical AND make the cash, I figure it's win/win.
 

judge wopner

TRIBE Member
Gfunkdiva said:
I have a bunch of ethical mutual funds through my credit union, and they're making mad profits right now, like in the 22% range. I don't pay that much attention to it, but if I can go ethical AND make the cash, I figure it's win/win.

if you pick up a copy of Shambala magazine there are a few ads from ethical investment firms that you can work with to devise a portfolio with selective industries according to your ethical preferences.

though longer term im really feeling the new Water ETF if only because its symbol is "PHO"
 
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judge wopner

TRIBE Member
speaking of which 2 new ETF's just launched from Powershares, but i dont know what companies they track:

symbol/ MER
Global Clean Energy PBD 0.75
Global Water PIO 0.75
 

2canplay

TRIBE Member
Things are really tanking in the US housing market. From today's WSJ...

29% cancellation rates...ouch. I think some of these builders are decent short candidates. I like surprises on the down side.

Lennar Swings to Quarterly Loss,
Sees Continued Market Weakness
By DAWN WOTAPKA
June 26, 2007 11:33 a.m.

NEW YORK -- Lennar Corp., the first major home builder to report second-quarter earnings, Tuesday said substantial charges for land and inventory write-downs caused an even greater second-quarter loss, and a gloomier forecast for the rest of 2007.

Lennar continues "to see weak, and perhaps deteriorating, market conditions" and expects to post a third-quarter loss, said Stuart Miller, president and chief executive of the company, the nation's second-largest U.S. home builder. Analysts had expected third-quarter earnings of 25 cents a share. The company added that it doesn't see conditions improving in 2007.

HOUSING WOES



• Glut of Homes Puts Pressure on PricesShares of Lennar were off 64 cents, or 1.7%, at $38.11 on composite volume of 2.3 million shares, compared with average daily volume of about 2.8 million. Earlier Tuesday, the shares traded at a 52-week low of $37.85; the previous low of $38.63 was set Monday.

Miami-based Lennar, like others in the sector, is slashing prices to compete in a market with an increasing number of new and existing homes. Nervous buyers are canceling orders, while lenders reeling from skyrocketing foreclosure rates are tightening requirements, reducing the pool of potential homeowners.

"These stocks are likely going to see new lows this year," said Alex Barron, a senior research analyst with the Agency Trading Group in Minnesota.

For the fiscal quarter ended May 31, Lennar lost $244.2 million, or $1.55 a share, compared with net income of $324.7 million, or $2 a share, a year earlier. Revenue dropped 37% to $2.88 billion from $4.58 billion a year earlier.

The grim results surprised experts: On average, analysts surveyed by Thomson Financial had expected earnings of five cents a share and revenue of $2.58 billion.

In particular, Lennar's $1.33 per-share charge for valuation adjustments and write-offs of option deposits and pre-acquisition costs stunned analysts.

Last year, major home builders incurred about $5 billion in impairment charges, which include abandoning land options, discounts to move standing inventory and reducing the value of current land for future construction. Most industry watchers figured the worst of the write-downs came last year. "Clearly it looks like we had only hit the tip of the iceberg at that point," Mr. Barron said.

Buyers, meanwhile, continued to walk away. Lennar's cancellation rate was 29%. Those who didn't, paid less. The average sale price of delivered homes fell to $298,000 from $322,000 a year earlier, primarily because of increased incentives.

As the housing market began to crumble, Lennar drew industry criticism for aggressively discounting homes to move inventory. But Mr. Barron applauded the move. "If you can't sell your inventory at the current price, you've got to find a price where somebody's willing to buy it. What other choice is there?"

During the quarter, the company delivered 9,568 homes, down 28%. New orders of 8,056 homes was down 31% and the backlog dollar value fell 56% to $2.8 billion.

Industry experts desperate for a glimmer of hope have been disappointed. Existing-home sales dipped during May to their lowest level in nearly four years, while inventories climbed and prices fell a 10th straight time, according to the National Association of Realtors.

Last week, the government reported May housing starts fell 2.1% amid production cuts as home builders struggled to pare bloated inventories. Some analysts predicted growing inventories will further depress prices. Mr. Barron figures prices will drop an average of 30%.

On Thursday, builder KB Home, the nation's fifth-largest builder measured by 2006 closings, reports its earnings before the market opens. As with Lennar, analysts expect a dramatic revenue decline. Shares of KB Home recently were down 1.5% at $40.08.
 

jebac

TRIBE Member
someone made alot of money

The Canadian dollar opened at 93.98 cents US this morning, up 0.54 of a cent from Wednesday's close. The U.S. dollar stood at C$1.0640, down 0.62 of a cent.

Pound sterling worth C$2.1303, down 0.87 of a cent, and US$2.0022, up 0.35 of a cent.

The Euro was worth C$1.4332, down 0.60 of a cent.

Quotations provided by BMO Nesbitt Burns, Capital Markets.


-jebac
 

Bernnie Federko

TRIBE Member
A new — unknown — world

For two years, the global elite fumbled for ways to defend the seven-decade-old structure of trade and diplomacy from punishing attacks. This week, top players declared the system all but dead.

  • The main thing now, leading thinkers said, is to try to ensure that what replaces the system in the coming years prevents great-power war — as the existing one has — and delivers more for millions left behind by the current economy, Steve reports.
  • The scale of what comes next seems likely to rival modern social, political and economic transformations, such as the post-Gilded Age of the early 1900s, the global Great Depression of the 1930s, and the Reagan-Thatcher revolution of the 1980s.
  • "The paradigm is shifting. Powerful people are asking questions on the record in the halls that they've never asked before," said Ben Pring, director of the Center for the Future of Work at Cognizant.
Politicians, executives and scholars told Axios that, while the current system is still functioning, a transition is already under way to what's likely to be a very different global political and economic order, one that is now — at best — faintly visible.

  • Klaus Schwab, founder of the World Economic Forum, told attendees that they must make dramatic changes to the global system, and not merely tinker.
And executives seemed to agree, voicing a new readiness to fundamentally change course in order to avert the worst.

  • One thing all of them told us: The speed of advanced technologies, in particular artificial intelligence and automation, is already making the transition more disruptive than prior epochal shifts — and may prolong it.
  • Brian Gallagher, CEO of United Way Worldwide, who has attended Davos 10 times, said: "They understand that they may have to slow down the integration of the global economy in order to let the rest of society catch up. That's the first time I've heard it here."
What to watch:

  • The new order could enable authoritarian-style governments that undermine counterweight institutions, said Adam Tooze, an economic historian at Columbia University. "You could have a liberal trading system with a majority of authoritarian regimes."
  • Many assume Beijing will sooneror later dominate the new order. That is not preordained, but even if power is dispersed regionally, China, India and Brazil all stand differently politically, which could cause tensions of their own.
 

Bernnie Federko

TRIBE Member
A parade of billionaires, CEOs, world leaders and hangers-on has now arrived in Davos, Switzerland, bearing skis, packed schedules and deep concerns about the global economy.

  • PwC's annual Global CEO survey — 1,581 CEOs across 83 territories — was conducted in the fall and released tonight as the World Economic Forum opened. It makes for some pretty alarming reading.
The big picture: 53% of CEOs expect global economic growth to decline in 2020, up from 29% in 2019 and just 5% in 2018. Their views of their own companies’ prospects were the bleakest since 2009.

  • That sentiment was spread across all regions, though CEOs in the Asia-Pacific are most optimistic and North American CEOs least so.
What they’re worried about:

  • CEOs in the Asia-Pacific view trade conflicts as the top threat to their organizations’ bottom lines, while geopolitical uncertainty is the top concern in the Middle East, populism ranks first in Latin America, policy uncertainty in Africa and cyber threats in North America.
  • Over-regulation is the biggest concern among CEOs in Europe, and also finishes top in the global average.
What they’re doing about it:

  • Trade conflicts didn’t even register as a top 10 concern until last year, but are now top-of-mind, particularly in China.
  • Chinese CEOs who are “extremely concerned” about trade conflicts are far more likely to say they’re shifting production to alternative territories than a year ago (44% then, 63% now).
  • Among "extremely concerned" U.S. CEOs, 50% are adjusting supply chains but just 23% are moving production, while 34% aren't making any changes at all (compared to 5% in China).
  • Worth noting: Chinese CEOs now list Australia, not the U.S., as the most important country for their growth prospects.
What they foresee:

  • CEOs around the world expect massive changes for big tech. By 2022, most anticipate more regulations (71%), including on social media, the break-up of dominant firms (63%), and compensation of individual users for their data (51%).
  • While companies are eager to stress their climate consciousness while in Davos, just 24% of CEOs are “extremely concerned” about climate change.
  • In China, though, the percentage of CEOs who see new opportunities for their companies through climate change initiatives has jumped from 2% in 2010 to 47% now — far higher than in Germany (20%) or the U.S. (15%).
Who to expect: 15,000 total attendees (3,000 of them with official invitations) including 100 billionaires and 53 heads of state or government, per Politico.

  • Climate will dominate the official agenda. I eavesdropped on a few attendees tonight discussing whom they most wanted to see, and Greta Thunberg was the consensus pick.
  • Soon after, placard-waving climate protesters chanted their way past the restaurant where I was eating.
  • Several panels will also be dedicated to inequality and human rights.
Between the lines: The irony of the uber-rich and super-powerful arriving by private jet to discuss these topics in a proudly exclusive setting (there are at least 10 tiers of access badge) is lost on no one.

  • But the sheer concentration of power and wealth in one Alpine town makes Davos, now in its 50th year, a hard-to-match destination for deal-making and consensus-building.
 
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Bernnie Federko

TRIBE Member
Taxing questions
Walter Howell of Peterborough, Ont., asks about the long-term tax impact of a transition away from fossil fuels. “As we transition to more electric vehicles over the next decade there will be less gasoline sold,” he writes, adding, “These taxes pay for all the road infrastructure that all vehicles use. I expect that governments will have to apply some taxation to licence plate renewals on electric vehicles and other things to generate the income needed.”
Mr. Howell is right about a couple of things. First, gasoline taxes do generate significant revenue. Ontario, for instance, said in its most recent fiscal update that it expects to take in $2.4-billion in revenue this year from gasoline taxes. Once that revenue withers, there will indeed be a gap to make up in the provincial budget.
As a side note, jurisdictions that choose to reduce other taxes to offset the cost of carbon pricing (as New Brunswick has indicated it will do), will face an even bigger gap. Eventually, carbon pricing revenue will start to fall as emissions decrease, creating an additional funding gap. File that one under “nice problems to have.”
It’s a misconception that gasoline taxes pay for road infrastructure. Governments like to say so, but generally speaking, notes University of Calgary economist Trevor Tombe, it’s more of an accounting fiction. In other words, if gasoline tax revenue goes up (or down), nothing obligates a government to increase (or decrease) its road infrastructure budget.
So, while governments might very well need to make adjustments for any shortfall, that cost wouldn’t necessarily be shouldered by drivers
 

praktik

TRIBE Member
Taxing questions
Walter Howell of Peterborough, Ont., asks about the long-term tax impact of a transition away from fossil fuels. “As we transition to more electric vehicles over the next decade there will be less gasoline sold,” he writes, adding, “These taxes pay for all the road infrastructure that all vehicles use. I expect that governments will have to apply some taxation to licence plate renewals on electric vehicles and other things to generate the income needed.”
Mr. Howell is right about a couple of things. First, gasoline taxes do generate significant revenue. Ontario, for instance, said in its most recent fiscal update that it expects to take in $2.4-billion in revenue this year from gasoline taxes. Once that revenue withers, there will indeed be a gap to make up in the provincial budget.
As a side note, jurisdictions that choose to reduce other taxes to offset the cost of carbon pricing (as New Brunswick has indicated it will do), will face an even bigger gap. Eventually, carbon pricing revenue will start to fall as emissions decrease, creating an additional funding gap. File that one under “nice problems to have.”
It’s a misconception that gasoline taxes pay for road infrastructure. Governments like to say so, but generally speaking, notes University of Calgary economist Trevor Tombe, it’s more of an accounting fiction. In other words, if gasoline tax revenue goes up (or down), nothing obligates a government to increase (or decrease) its road infrastructure budget.
So, while governments might very well need to make adjustments for any shortfall, that cost wouldn’t necessarily be shouldered by drivers
"I have a follow up - what taxes will we have to levy to pay for the impacts of climate change in a status quo, Business-As-Usual emissions scenario? This can be measured in trillions globally, many billions for Canada as we pay for increased supports to farmers, and fire, drought, flood and storm affected areas"

The short-sightedness in this Q and A will be an ironic relic for future generations to read, should they have a working internet with which to dig these kinds of boomer questions up.
 
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