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Do serial directors offer value for money?

A Guide to Lending Opportunities

If you check the directors list of stock market companies you will often see the same names cropping up time and time again. Whether these are executive or non-executive directors there is growing concern amongst institutional investors that some directors are spreading themselves too thinly. That is not to say they’re experience and skills are not required but maybe there should be a limit to the number of boards which directors are able to sit?

Experience is always welcome

Whether acting as a non-executive or an executive director there is no doubt that experience is always helpful and appreciated. The problem is when we see directors on numerous boards offering a certain number of days per month for what can sometimes seem exorbitant wages. Even though we are not privy to the inner workings of individual companies and what kind of role they directors play, sometimes it does prompt questions about value for money. Continue reading “Do serial directors offer value for money?”

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General Motors announces plans to go fully electric

Big, powerful and influential companies attract enemies

General Motors has today announced plans to go “fully electric” although the company’s CEO is unwilling to give an exact year for this conversion. This is just the latest in a long line of traditional automobile manufacturers effectively being forced to “go electric” as the industry changes and consumer demands move towards cleaner energy.

Those who follow the electric car industry will be aware that GM is the devil incarnate amongst electric vehicle enthusiasts. The company introduced the EV1 in the late 1990s before literally pulling the vehicle overnight, crushing all EV1s ever manufactured and reverting its focus back to gasoline/diesel vehicles in an instant. So, what can we expect from General Motors in the future?

Governments are changing policy

Recently Chinese, French and British governments announced plans to ban gasoline vehicles in the future. The exact timing of these bans is a little vague at the moment but it does seem as though there is a real shift towards greener technology and cleaner fuels. So, when you bear in mind that China is one of General Motors biggest markets the company was really pushed into a corner and forced to make today’s announcement. Continue reading “General Motors announces plans to go fully electric”

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Tracker funds are more than functional

Invest your money and then walk away

Anyone who relies on their own opinion and research to beat investment markets has to have an ego and confidence in their abilities. There is nothing wrong in having an ego as long as you can back-up your boasts and beat the markets. However, is it so wrong to use investment vehicles such as tracker funds? Why do many of us avoid tracker funds like the plague when they boast good long-term returns?

Following the markets

The vast majority of investors will have no chance of replicating market indexes around the world and therefore no chance of replicating their performance in the longer term. The fact is that in the longer term stock markets have outstripped all other types of investment classes simply because they are based upon economies around the world. If economies perform then stock markets perform, if economies do not perform then everything will suffer. Continue reading “Tracker funds are more than functional”

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Investors switching from quality to growth

Are there viable options other than investing on the stock market?

A review of stock market performances in the current calendar year have cast a very interesting light on the way in which US investors are spending their money. So-called high quality stocks with strong balance sheets and stable long-term growth have appreciated by just 12% this year, according to Goldman Sachs, while the broader S&P benchmark index has increased by 13.8%. The situation is even more diverse when looking at companies showing fast sales growth in the short term with no medium to long-term targets. This group of quoted companies has increased by 20% during the calendar year so far.

Confidence and sentiment

At this moment in time relatively cheap borrowings have encouraged many investors and companies to throw money into the markets. While the high-quality companies with long-term stable growth are still in demand, there is certainly great appetite for high growth/high risk investments. These are the type of shares which are valued on “hope value” because very often they are unprofitable and unlikely to break into profit for the foreseeable future. When the markets are confident and stocks are moving higher these are the type of investments which often get dragged up on pure sentiment alone. Continue reading “Investors switching from quality to growth”

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Can Roku really take on Amazon, Apple and Google?

Rumours, counter rumours and truth

The Roku IPO took centre stage this week with the shares surging from the top of the range $14 placing price ending the week at $26.54. This near doubling of the IPO share price values the company at approaching $3 billion but also puts it in the headlights of Amazon, Apple and Google which have shown a great interest in the company’s streaming media player market. So, can Roku really take on the likes of Amazon, Apple and Google?

Market share

While some investors are sceptical about any company’s ability to take on the US giants it is worth noting that Roku currently has a market share in excess of 30%. This is greater than all of its competitors at the moment although there is some concern that the company brings nothing new to the table but is instead just a platform to promote different elements of the streaming industry. The company is in effect a technology hardware provider but there is more to this than meets the eye. Continue reading “Can Roku really take on Amazon, Apple and Google?”

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Tesla shares under pressure

Tesla shares surge

Since Tesla shares hit a high of $385 on 18 September 2017 the stock has been under pressure and closed this week just above $340 a share. In all honesty there are many analysts waiting for the company to trip up and “reveal its true colours” but serial entrepreneur Elon Musk has a tendency to surprise on the upside hence the stocks strong retail following. However, now that the company is approaching mass market, with its new Model 3 vehicle, is cash flow becoming a major problem?

Slight disappointment with electric truck

When the Tesla share price seemed to be wobbling just a few weeks ago the company teased investors suggesting that September would see the unveiling of a new electric vehicle, a truck. Since then the company has been forced to amend the timescale with an October unveiling now expected – which did not go down well with analysts. While the company has, like so many others, disappointed on numerous occasions in the past many analysts are concerned about the delay. Continue reading “Tesla shares under pressure”

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Donald Trump announces ambitious tax reforms

A Guide to Lending Opportunities

Donald Trump’s administration has been in discussions with Republican leaders for some time now regarding future tax reforms. Today saw the release of a joint proposal which would radically reform the tax regime for corporate America and make significant changes to individual taxation. This has been high on the agenda for some months now and there are hopes that it will placate those who were growing weary of Donald Trump’s empty promises.

Reducing corporation tax

One of the more eye-catching elements of the proposed tax reforms, for which we await more detail, is the intention to reduce corporate tax from 35% down to 20%. This is a massive reduction and has already been well received by Wall Street and investors despite the lack of detail. There is also a proposed change to the “passthrough business rate” which is currently charged under the individual code but will fall to 25% in the future.

These are major changes for American companies although like so many issues involving Donald Trump, there is a distinct lack of detail! Continue reading “Donald Trump announces ambitious tax reforms”

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Are investors being programmed to buy on the dips?

Trading programs back under the microscope

Allianz’s Mohamed El-Erian gave a very interesting interview to CNBC in which he discussed stock markets of today. One of the more interesting comments he made was the suggestion that investors have been conditioned to buy on the dips. This is something which day traders tend to do on a regular basis, hoping for a sharp snap back, but are long-term investors now buying on the dips thereby pushing markets back towards higher ground and artificially limiting the downside?

Why buy on the dips?

The theory about buying on the dips is that investors are able to take advantage of short-term oversold positions. This may have occurred because of market conditions or stock specific issues and is something we see on a regular basis. In many ways investors are becoming more switched on to the idea of buying on the dips as a means of locking in long-term value. There are obviously some stocks which will not bounce back straight away, if at all, which can make it a little more difficult to buy on the dips and constantly add value to your portfolio. Continue reading “Are investors being programmed to buy on the dips?”

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Oil price creeps higher unnoticed

Oil price

In years gone by any increase in the price of oil would have caught the headlines, would have had investors looking at the oil sector and looking to bank profits further down the line. Over the years we have seen suggestions that oil is finished as a commodity, new technology is taking over, hence the move to less than $30 a barrel towards the end of 2015. Yesterday, we saw the price of oil nudging towards $60 a barrel finally closing the day at $51.97.

Oil companies back in profit

When the price of oil was less than $30 a barrel a number of new oilfields were put out to grass because it was literally unprofitable to extract the black gold. Share prices fell, dividends were cut and many oil companies had to adjust their asset values which were based on oil reserves. Sceptics may suggest that the price of oil has increased because of worldwide tensions, i.e. the US and North Korea, but there seems to be more than just this behind-the-scenes. Continue reading “Oil price creeps higher unnoticed”

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Why do some shares seem to defy gravity?

Tesla shares surge

Whether you have been investing for one year or 40 years we have all come across shares which seem to defy gravity and break all the rules. On the surface they may be loss-making, unlikely to make a profit for some time to come but investors keep ploughing money into the business. So, why do some shares seem to defy gravity?

Long-term projects

Perhaps one prime example of a company which seems to defy gravity is electric car manufacturer Tesla led by the charismatic Elon Musk. This is a company with a market cap of $60 billion yet aside from the odd quarter here and there, the company is yet to make a profit. We’re not quite sure when the next quarterly profit will emerge let alone a full-year profit. However, the shares keep going from strength to strength, fundraisings are well received by markets and even the emergence of bearish share price trends soon die a death. So, what keeps these companies ticking along? Continue reading “Why do some shares seem to defy gravity?”