Will U.S. Need a Universal Basic Income?

David MoonBlog

General Motors describes its plan to begin operating a ride-sharing service using fully autonomous vehicles next year as “one of the biggest business opportunities of all time.” If the automobile industry succeeds in this technological employment disruption, it will not only replace up to 15 million motor vehicle operator jobs (Department of Commerce estimate), but will also threaten jobs in automobile manufacturing, insurance, road construction and hospital emergency rooms. It would also put a lot of those parking ticket people out of business, something over which I am likely to lose little sleep. The threat of these and scores of … Read More

Even crypto-moguls know it’s a joke

David MoonBlog

It’s hard not to laugh at a market in which a guy creates his own cryptocurrency (Dogecoin) as a joke, but because there is so much dumb money sloshing around in the crypto-sphere it gets bid up to $1 billion simply because of its low price per “coin.” Read more: Dogecoin creator admits it was a joke…    

Lack of volatility not a lack of risk

David MoonBlog

After surging almost 20% in 2017, the S&P 500 has now increased 26% since November 2016 – something almost no one expected. Not only were the stock price increases of the past year or so unexpected, they occurred during a period of remarkably little volatility. For the first time in history, the S&P 500 increased every month during a calendar year. Over the course of 2017 the index never closed below its 2016 year-end mark. The Dow Jones Industrial Average also set 70 new highs, a record in the 121-year history of the index. The largest peak-to-trough decline during the … Read More

BUFFETT MAKES SUCCESSION PLANS CLEARER

Garrett ArmsBlog

This week, Warren Buffett provided a clearer look at Berkshire Hathaway’s management structure in the event he and vice-chair Charlie Munger ever depart their roles at the company.  The two oft-mentioned successors to the Berkshire throne, Ajit Jain and Greg Abel were appointed to the company’s Board of Directors.  In connection with the appointment, Abel was promoted to the role of Vice Chairman of Non-Insurance Business Operations and Jain to the role of Vice Chairman of Insurance Operations.  The announcement is viewed as another piece of Buffett’s move toward succession over time.  Both individuals serve essential roles at Berkshire and … Read More

WARNINGS OF A CHINESE MIRAGE

David MoonBlog

For much of the past 15 years, China was one of the most popular investment themes in the world. From 2005 to 2007, the Chinese Shanghai Composite Index increased 500 percent. Economic statistics told of a construction and real estate boom that appeared to be the most intense in the history of the world. Both individual and professional investors clamored to invest in the land of the Red Dragon. For decades, investors speculated about what would happen when the strength of power of more than a billion Chinese consumers finally spilled onto the world stage. Maybe it was finally happening. … Read More

AVOIDING GIMMICK INVESTMENTS

David MoonBlog

The mounting interest in digital currency such as Bitcoin has understandable impulses in an era of prolific money printing by central banks. How strong is the public interest? For the first week of December, Google searches related to the digital currency outpaced searches on Donald Trump. One of the particularly costly, yet avoidable investment mistakes is to fall prey to gimmicky investment products designed to attract assets, not earn outstanding returns. Some companies barely even pretend to be in the investment business, almost brazenly declaring themselves to be shallow marketers. Consider EventShares and its newly organized ETF, the U.S. Tax Reform … Read More

The Lessons of Joseph

David MoonBlog

Joseph was a much better man than me. If my girlfriend or wife were nine months pregnant with someone else’s child and Donald Trump issued an executive order requiring us to spend five days walking up the mountain from Knoxville to Cherokee, North Carolina so we could pay taxes, I suspect I’d take my chances and stay home. Then, if I had a dream telling me to take my wife and newborn from Cherokee to Charlotte to hide because that President wanted to kill us, I would likely take an Ambien and try to get back to sleep. There are … Read More

Bitcoin: reasonable risk or gamble?

David MoonBlog

The mounting interest in digital currency such as Bitcoin has understandable impulses in an era of prolific money printing by central banks. How strong is the public interest? For the first week of December, Google searches related to the digital currency outpaced searches on Donald Trump. Because virtual currencies are tracked and maintained by vast networks of computers, no government or bank is in control. Call it the “idealist’s currency”, a beneficiary of the well-deserved diminished confidence in paper money. While the U.S. dollar is no longer backed by gold, it is backed by the largest single financial asset in the history … Read More

Christmas budgeting made simple

David MoonBlog

The findings of a recent NerdWallet Consumer Holiday Shopping Report include some troublesome items. Fourteen percent of U.S. consumers are still paying off credit card balances from last Christmas. Millennials are most likely to have outstanding balances from last Christmas. Combine that with the finding that Americans plan to spend the same amount on gifts as they did last year and you get a building case for eventual economic hardship. At a minimum, these people are spending future income, reducing their future standard of living. If a 25-year-old takes two years to pay for his Christmas shopping, it reduces future … Read More

University lobbying criticized

David MoonBlog

If you need any evidence that true tax reform is an impossibility, look no further than a spam email I received last week from University of Tennessee President Joe DiPietro. Dr. DiPietro’s email encouraged me to contact my Senators and ask them to, among other things, restore the charitable deduction for donations required to purchase athletic tickets. As long as special interest groups can convincingly threaten to oust politicians from office, Congress will never radically simplify the tax code. One man’s benefit is another man’s special interest loophole. In this sense, UT is no different than Wall Street firms that … Read More