Does anything last forever in the world of stock market investments?

Does anything last forever in the world of stock market investments?

There is no doubt that the Internet revolution has changed the way business is carried out around the world. We have seen many new companies emerge under this new era of online technology and many of the previously “untouchable” company giants of years gone by fall by the wayside. This has happened in many different walks of business from banking to retail, from computing to property investment. So, does anything last forever in the world of stock market investment?

The trend is your friend

The Internet today is dominated by social media with the likes of Facebook coming from nowhere to take over the world of online communication. The company has attracted hundreds of millions of users around the world and led to the slow painful death of many traditional companies. It is easy to assume in the current environment that the likes of Facebook will go on forever but this is not necessarily the case. As stock markets tend to move in cycles so do trends in business and it is the ability to appreciate when a trend is coming to an end that will allow you to bank some serious profit. Continue reading “Does anything last forever in the world of stock market investments?”

When markets know best….

When markets know best….

Over the last few months we have seen a number of developing issues involving the likes of Facebook and Tesla. What is becoming obvious is that markets are extremely good at digging out accurate information as opposed to working on hearsay and speculation. While there is nothing to suggest that the likes of Facebook Tesla have misled the markets, what we do know is that the cumulative impact of various expert views can bring issues to ahead as we have seen.

Professional traders

Whether you want to call them professional traders or “insiders” there is no doubt that many investors have been aware of issues within Facebook and Tesla for some time. We have seen constant selling into strength, we have seen volatile share prices and while private investors are only able to value companies using official company announcements, there is a lot more going on under the surface. Continue reading “When markets know best….”

Is Mark Zuckerberg’s position at Facebook untenable?

Is Mark Zuckerberg’s position at Facebook untenable?

There is no doubt that the unflappable Mark Zuckerberg has received a serious wake-up call in light of the Cambridge Analytic scandal allegedly involving Facebook data used to manipulate elections around the world. This is a man who is supremely confident in his own ability, ruthless in his business actions and ultimately a bit of a loner. While there is no doubt that Mark Zuckerberg is a supremely talented entrepreneur there is also no doubt that sometimes he loses sight of reality.

Facebook and yet another scandal

We have seen issues with privacy, copyright on photographs and now we have the mining of personal information from tens of millions of Facebook users. Complicated algorithms are able to link specific actions and specific preferences with other interests and therefore appeal to an area of society in relation to elections and other similar activities. This manipulation, because that’s what it really is, allows particular types and styles of adverts to be placed in front of users who it is proven will likely react in a specific manner. Did the Cambridge Analytical data have an impact on US elections? In what the circumstances was the data used? Continue reading “Is Mark Zuckerberg’s position at Facebook untenable?”

Big, powerful and influential companies attract enemies

Big, powerful and influential companies attract enemies

For once it seems that Mark Zuckerberg, the CEO of Facebook, has no answer to the crisis currently engulfing his “baby”. He has been severely criticised by analysts for not fronting the press when the crisis broke and initially refusing to apologise. The company has since paid for a number of adverts in the UK press and other areas of the world to apologise to members and customers. However, is there an argument that big, powerful and influential companies attract enemies?

It happens time and time again

IBM, Microsoft, Google and even a recent addition in the shape of Uber have all felt the wrath of politicians and regulators around the world after becoming “too powerful”. It is ironic that in the early days governments round the world often encouraged these companies to grow and become ever more powerful and influential. Inevitably, once politicians lose control of these large companies they snap into regulatory mode and all of a sudden they turn into the hunter, hunting the hunted. Continue reading “Big, powerful and influential companies attract enemies”

Oprah Winfrey and Weight Watchers

Oprah Winfrey and Weight Watchers

Back in 2015 Oprah Winfrey famously acquired a 10% stake in Weight Watchers for an outlay of $43 million. Fast forward to 2018 and Oprah Winfrey has sold a 2.5% stake in Weight Watchers for around $110 million. The stock has increased from around six dollars up to $60 since Oprah Winfrey came on board and while some have been commenting on her 2.5% share sale, she still retains a 7.5% stake in the company worth in excess of $300 million.

Putting her money where her mouth is

Oprah Winfrey signed up as a spokesperson for Weight Watchers back in 2015 after she bought a 10% stake in the company. It was common knowledge that she had an array of ideas for the company and believed that a significant shakeup would release significant value going forward. The fact that the shares have increased in value by 10 times since 2015 sums up her success. Historically, many so-called celebrity investors have jumped aboard companies purely and simply as a means of feathering their own nest. However, while Oprah Winfrey has seen her $43 million investment increase to in excess of $400 million, this is just a fraction of the money made by long-term investors in Weight Watchers. Continue reading “Oprah Winfrey and Weight Watchers”

Downsizing General Electric, the massive task ahead for new management

Downsizing General Electric, the massive task ahead for new management

Over the last 12 months the General Electric share price has fallen by 50% as investors fell out of love with the old giant amid concerns over growing debt and falling profits. John Flannery took the reins as chief executive in the summer of 2017 and while it is taken him some time to put together a cohesive recovery plan for the group, things do seem to be falling into place just now. We already know that the new management are looking to raise in excess of $20 billion by either floating off or selling different areas of the business. But what else can we expect?

A conglomerate of conglomerates

Those who follow the old giants such as General Electric will be well aware that this company is enormous, seems to have a finger in every pie and has to a certain extent grown out of control. From healthcare to aviation, power units to electrical engineering, it seems that General Electric has lost focus and direction. The latest rumours suggest that the electrical engineering division, which was acquired for $3.2 billion back in 2011, is about to be sold for less than the acquisition price. Continue reading “Downsizing General Electric, the massive task ahead for new management”

Spotify set for $20 billion IPO

Spotify set for $20 billion IPO

The wheels are in motion for a high profile listing on the New York Stock Exchange for music streaming giant Spotify. Along with the forthcoming Dropbox IPO these two companies could offer an interesting insight into the confidence of investors in technology-based companies. There are high hopes that Spotify will attract a $20 billion flotation value with suggestions that the company could be the next “Netflix”. Many people will fail to realise that Spotify has just been in existence for 10 years and is on the verge of a $20 billion float price!

Active users

Spotify is simply a music streaming service where members can access free music after listening to adverts or sign up for a monthly subscription giving them ad-free access to a massive library of music. While critics will point to the fact that the company saw losses increase from $650 million in 2016 up to $1.5 billion in 2017, there is much more to this story than meets the eye. Continue reading “Spotify set for $20 billion IPO”

Snapchat, you live by the sword you die by the sword

Snapchat, you live by the sword you die by the sword

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”

Does the herd mentality exaggerate market volatility?

Does the herd mentality exaggerate market volatility?

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?”

Tin hats at the ready, US markets under pressure

Tin hats at the ready, US markets under pressure

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”