After a period of uncertainty, Snapchat finally began trading in June 2017 at a price of $17. The IPO price was reduced at the very last minute although instantly the shares rallied to over $20 a share (once touching $30!). This continued for a few days with the company once valued at $29 billion only to fall by the wayside as competitors emerged and activity numbers disappointed. In August 2017 the shares fell to a low of $12 and many were forecasting the end of the company despite being on the market for just over 12 months. However, after a volatile period the shares rallied to around $21 in February 2018, but what next?
Celebrities turning against Snapchat
Just a few days ago Kylie Jenner, a celebrity with 24.5 million Twitter followers, questioned the future of Snapchat suggesting she does not use the service any more. This in itself caused a flurry of concern across the market, was the Snapchat bubble about to burst? Continue reading “Snapchat, you live by the sword you die by the sword”
As US markets began to rise after Donald Trump’s inauguration as president of the USA there were many experts predicting a short term slump. Investors seemed uninterested in political concerns and continued to plough money into the markets. Much was being taken for granted in terms of US economic recovery, interest rates and political stability. However, over the last couple of weeks we have seen some significant volatility in US markets. Has this been brought about by the herd mentality?
Cryptocurrencies signalled the start of the correction
It seems difficult to believe that the massive volatility of late is over and the markets are set to return to their growth path. Well, a number of experts believe that this is the case and this short-term “reality-check” has happened, been digested and ultimately ignored by investors. How does this relate to cryptocurrencies? Continue reading “Does the herd mentality exaggerate market volatility?”
When the Dow Jones Industrial Average index touched 26,616.41 on 26 January there was no indication of the volatility to come. While the next couple of days saw a pullback in the market, something many put down to profit-taking, Thursday, 1 February 2018 will go down in the diary of investors. A 600 point fall in the index was followed by a fall of over 1100 points and then we had the much expected “dead cat bounce” and then another 1000 point fall on 7 February. The US market currently stands at 24,190.9 which is a fall of nearly 2500 points since 26 January. What does the short term hold for US investors and their worldwide comrades?
Cost of finance
Since the US mortgage crisis of 2008 there is no doubt that the historically low cost of finance has fuelled investment in the stock market as well as real estate. The problem now is that inflation is set to spike in the short term and the interest rate cycle has well and truly turned upwards. Ironically, as a consequence of stock market volatility we may see a short-term delay in further US interest rate rises but make no mistake about it, they are coming! Continue reading “Tin hats at the ready, US markets under pressure”
Just a few short days ago the Apple share price touched $180 and was seemingly on the crest of a wave. Fast forward to today and the share price is in freefall, down over seven dollars yesterday and now hovering just over the crucial $160 share price support line. So, why have investors seemingly fallen out of love with Apple and is this the end?
Bad case of PR blues
It is well documented that Apple is currently facing a number of legal challenges after admitting that older models of its award-winning iPhone were intentionally slowed “in order to maintain battery life”. Many iPhone enthusiasts suspect that the phones were slowed as a means of encouraging users to grade to the latest iPhone although this has been denied by the company. Whatever the truth, this was something of a body blow for the company, a company which prides itself on its immaculate PR footprint. Continue reading “Is Apple’s love affair with investors coming to an end?”
It has to be said that Elon Musk is a man who attracts media attention like honey attracts bees. This is a businessman who was been there, done it and taken on the establishment time and time again. While Tesla is seen by many as Elon Musk’s “baby” he has many fingers in many other pies all of which have so far proved relatively successful. So, what does the business world think about Elon Musk’s $55 billion 10 year bonus package with Tesla?
Building Tesla from nothing
Many people forget that Tesla was a new entity when Elon Musk took a stake in the business but he was not the only major stakeholder. As his other shareholders fell by the wayside he effectively took on the company by default but he has certainly grasped the opportunity with both hands! Continue reading “Elon Musk and his $55 billion Tesla bonus package”
Elon Musk, the innovative, charismatic and brilliant businessman seems to continually roll out new ideas and new products at Tesla. In a perfect world this is exactly what investors are looking for but many of the ongoing projects are far from finished. Would it be fair to describe Elon Musk as a butterfly, spending limited time on various projects and then flying onto the next one?
If anyone can keep all of these plates in the air it has to be Elon Musk who was been there, done it, bought the T-shirt and the shop. He’s not a man who plays things by the book, he does everything his own way and is not afraid to upset the establishment. As a consequence, Elon Musk has many enemies in the world of business, politics and media. There is no doubt that the knives are out for the Tesla CEO and while he is not necessarily bothered in any way, shape or form, his shareholders might be. Continue reading “Would it be fair to describe Elon Musk as a butterfly?”
In what is fast becoming a fight between the establishment and the anti-establishment movement this week we saw Singapore and India looking to clamp down on cryptocurrencies such as Bitcoins. The price has been volatile to say the least although there is a chance that the introduction of the new regulations to weaken cryptocurrencies could further strengthen the anti-establishment cause. Those against cryptocurrencies are well aware that they have no real say over the currencies themselves but they can restrict their trading, their use and ultimately their attractions to investors.
Are new regulations restricting trade?
The strange thing is that regulators across the likes of Singapore, India and many other countries around the world are effectively looking to ban cryptocurrencies in order to “protect investors”. The simple fact is that investors can and will make their own mistakes, can do their own research and while regulations are helpful, restrictions are not. There obviously needs to be a more structured approach to cryptocurrencies in general although the specific focus on the likes of Bitcoin would indicate that some regulators and some central banks are actually running scared. Continue reading “More countries looking to ban cryptocurrencies”
As US stock markets continue to push to all-time highs there are growing concerns that investors are ignoring reality. We have a situation where finance costs are still historically low, despite expectations of further US interest rate rises, and investors keep ploughing money into the stock market. However, there are a number of issues which investors seem to be ignoring which could have a significant impact on company valuations.
Disappointing US employment figures
While December saw an additional 148,000 employment positions in the US economy, this was less than the expected 180,000. There are strong signs that the US economy is fast approaching “full employment” having added more than 2 million jobs per annum for the last seven years. Even though the employment market has been particularly buoyant of late this has not been reflected in wages which continue to lag behind. If wages are lagging and the US economy is fast approaching “full employment” it is difficult to see how the US government can increase tax income for the foreseeable future. Continue reading “US stock markets ignoring reality?”
Since the financial crisis of 2007/8 stock markets around the world have been extremely difficult to predict with any great confidence. While many believe that the US stock market is enjoying a bull run with more to follow, others are concerned about the ever-growing valuation of technology-based companies. Historically a quick glimpse over your share portfolio at the end of the year and a few tweaks would be enough to reposition your assets for the next year. However, things have changed dramatically in recent times and your investment strategy for 2018 might need to be very different to what you have been used to!
Standing still is dangerous – not a good investment strategy
Historically we know that long-term investors make the greatest returns, sticking to solid investment strategies and staying with companies through thick and thin – if the long-term growth story remains intact. This strategy will always offer a backbone to those with a long-term investment horizon but for those looking to bank short to medium term profits, standing still can be dangerous. The year-end is traditionally a time of reflection, comparisons and setting new targets for the next year. Continue reading “What is your investment strategy for 2018?”
Over the last 10 years the rise and rise of Bitcoin has made many investors mind-boggling amounts of money. A perfect example of the increase in the price of Bitcoin’s can be traced back to 2010 with the first ever transaction using this cryptocurrency. A developer used 10,000 of the then little-known Bitcoins to acquire two pizzas. If he used those same 10,000 coins today to acquire two pizzas they would cost him $85 million each!
The never-ending success story
On 1 December 2017 the price of individual Bitcoins broke the $10,000 barrier. The price peaked at just over $19,500 on 17 December 2017 although it fell back to around $12,000 on 22 December and currently stands in the region of $15,000. That is one heck of a volatile investment but one which is attracting more and more interest from both professional and private investors. So, will this success story continue? Continue reading “Is price of Bitcoins ready to collapse?”