Explaining the Trump stock market

David MoonBlog

Since Donald Trump’s election on November 8, 2016, the S&P 500, a broad measure of the U.S. stock market, increased 50 percent. Why? If you despise Trump, you likely credit “the continued Obama economic recovery” or “Wall Street billionaires’ love of Trump.” If you like Trump, you likely believe that the stock market is doing well because “we finally have a businessman in the White House” or that investors were relieved that Hillary Clinton wasn’t elected. Both sides are wrong. The explanation is simple math. The price of a stock (or group of them) is algebraically determined by two broad … Read More

BB&T, SunTrust, First Tennessee merger news

David MoonBlog

Charles Schwab recently announced it will acquire rival TD Ameritrade in a transaction worth approximately $26 billion. If approved by regulators, the new Schwab would become one of the country’s largest brokerage firms, with $5 trillion in assets. In more local merger/acquisition news, BB&T and SunTrust are combining to create the sixth largest bank in the country. The companies always refer to the transaction as “a merger of equals,” but by practical observations and most financial metrics, it appears that BB&T is acquiring SunTrust. The companies expect the merger to be complete on December 6. Within the next two years, … Read More

A Thanksgiving airing of grievances

David MoonBlog

Rather than bore you with a syrupy, Thanksgiving week list of things for which I’m grateful (family, friends, blah, blah, blah), I renew my holiday tradition of sharing a very abbreviated list of things that irritate me. Local morning radio. If the CIA really wants to torture people, it should pipe AM drive-time into Gitmo. Teachers with obviously substandard grammar. (As a UT alum, I grudgingly accept an exclusion for college football coaches.) My own grammar errors. Sean Hannity, Joy Behar, Don Lemon, Kellyanne Conway, Steve Harvey, Joel Osteen and any TV judge except Judge Judy. Local politicians who grandstand … Read More

A WWJD 401(k)?

David MoonBlog

A California investment firm is betting there are plenty of investors who believe Jesus wants them to buy its new mutual fund, the Inspire International ESG fund. (“ESG” is a new business buzz-acronym for “environmental, social and corporate governance.”) The fund (ticker symbol WWJD, of course) claims to invest in international companies screened for biblical and ESG values. What would Jesus do? Invest with Inspire! Mutual funds swaddled in a socially conscious wrapper have been around for years, usually known by what they avoid, not what they seek. (Think “thou shalt not” funds.) Buying these funds may make some personal … Read More

Climate change, college and capitalism

David MoonBlog

My college sophomore son called me last week to tell me about his literature professor who spent almost an hour ranting and raving about the cause of the California wildfires: capitalism. At the center of the blazing wildfires, both literally and figuratively, is troubled PG&E, a regulated gas and electric company operating in central and northern California. Most, if not all the fires, resulted from sparks produced by outdated PG&E transmission equipment. And, as any literature professor knows, capitalism is also responsible for climate change – and thus the California drought conditions that served to compound the problem. PG&E, overburdened … Read More

Millennials and socialism

Harold Black, PhDBlog

Every generation looks aghast at the next generation. Socrates lamented that “children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise.” My father was mortified at my generation with its race riots, Vietnam protests, civil rights upheaval, lax morals, dope smoking and free love. I chastised my children for handing out participation trophies, dumbing down of school curricula, and creating the entitlement generation. That generation is now called millennials and should be called the know-hardly-anything generation with almost a total absence of curiosity. This is a generation … Read More

Record stock prices not predictive

David MoonBlog

Depending on the measure used, the U.S. stock market either flirted with or set a new high last week. The broad market S&P 500 reached a new peak, while the 30-stock Dow Jones Industrial Average verged on a record. What are the future investment implications, if any, of setting a new high? Short answer: none. By itself, simply knowing that the stock market is at an all-time high gives you no information that is useful in making a decision. Knowing that the DJIA is at 27000 tells us nothing about where the DJIA ought to be or what the stocks … Read More

Retirement plan confiscation fears unfounded

David MoonBlog

No matter what you have read in an email, social media post or on some conspiracy website, the federal government is not about to confiscate your 401(k). Ever since that little boy repeatedly cried “wolf,” fear-mongering has been a popular, and sometimes profitable, pastime. Twenty years ago, seemingly intelligent and educated people were convinced that new blue mile markers along the interstate system were in preparation for United Nations peacekeepers invading the U.S. to quell Y2K riots. I must have slept through the riots. And the meeting to arrange the UN troops. In the past month I have received a … Read More

NCAA rejects academic reforms, reveals hypocrisy

David MoonBlog

In 2014, a former UCLA basketball player filed an antitrust class action against the NCAA, challenging the organization’s use of former scholarship athlete’s names and likenesses for commercial purposes. Since 2003, the organization had licensed former athlete’s personas for use in EA Sports video games. After a district judge found that the NCAA rules and bylaws operate as an unreasonable restraint of trade, the NCAA lost the court case, and was required to thousands of former athletes a total of about $40 million. The NCAA is a non-taxable, nonprofit organization – with a billion dollars in annual revenue and a … Read More

Government bookies protected from competitors

David MoonBlog

I never buy gas at the most convenient convenience store along my daily commute. It may be the only convenience store I’ve seen that doesn’t carry milk or fountain drinks. This past weekend, however, its parking lot was full – just like it will be next weekend. The lot was so packed last March that a car couldn’t have gotten to the pumps even if someone did want to buy gas. The station does appear to sell a lot of beer and fishing worms; it also offers an opportunity for those who feel lucky or believe they have some special … Read More