WSJ: What Is Thematic Investing?

By SIMON CONSTABLE

The world has changed, and through necessity so has the world of investing. That has given rise to something called thematic investing. 

“Unfortunately, a lot of investors have built up expectations of investing returns based on the returns of the past,” says Jay Jacobs, director of research at New York-based fund-management company Global X. Read more here,

U.S. News: Is the Retail Business Facing Apocalypse?

By SIMON CONSTABLE

Is there a retail apocalypse?

You could be forgiven for thinking so. Hardly a month seems to go by without a major retailer announcing some trouble. Even the iconic Macy's announced earlier this year it would slash 10,000 jobs.

Judging by recent headlines, things seem to be going from bad to worse, with both The Week and Business Insider calling the industry's troubles a "retail apocalypse" while The Atlantic used the slightly more restrained "retail meltdown of 2017."

The headlines, though, don't tell the whole story. "The media is so focused on the negative aspect," says Jeff Macke, an independent investor in San Diego. "There is a trillion dollar opportunity in retail."

Read more here.

Forbes: 'Inequality Reduces Growth' And Other Economic Ideas To Ditch

By SIMON CONSTABLE

Economics got a bad reputation during the financial crisis. At least part of the problem is that some people keep holding on to some very bad ideas, or theories that just don't work except on paper.

As with much in life these days the matter is polarized. Helping to keep the debate amiable are Bruno S. Frey and David Iselin who recently edited and published Economic Ideas You Should Forget. It's a book of short essays by a slew of economists and other experts. They include such notables as  Robert Frank (Cornell,) Alan Blinder (Princeton,) and Jeffrey Sachs (Columbia.) Of course, there are many others. Read more here.

Forbes: Why Trump's Budget Cuts Should Be Even Bigger

By SIMON CONSTABLE
President Donald Trump's proposed 2018 budget is causing a consternation among the chattering classes. Why? It's because he has cut funding for a slew of domestic programs. That reaction is understandable if for no other reason than change is hard. Read more here.

U.S. News: 5 Things That Worry Wall Street Experts

By SIMON CONSTABLE 

One perennial truth about people who work on Wall Street is they worry a lot, and the only thing that changes is whatever is worrying them. Here's what's currently keeping some seasoned finance veterans awake at night. Read more here.

Forbes: Time To Drop "Thought Leader" From Your Resume

By SIMON CONSTABLE

The term "thought leader" has spread through the business world like some un-killable virus wrecking the careers of the innocent and guilty alike. It's time to put an end to this scourge.

If you have considered adding the term to you CV/resume, or your LinkedIn profile, just don't.

Really, don't. If you already use the term, eliminate it the moment you finish reading this column. Read more here.

Photo by João Ferrão on Unsplash

U.S. News: South Africa Still Hurting From Turmoil

By SIMON CONSTABLE

Don't count on South Africa's economy to get any better as long as the politics remain in flux.

But there is some good news. Once the problems in government settle down there could be some big money to be made. Read more here.

Forbes: America's Military Paranormal Science And What You Can Learn From It

By SIMON CONSTABLE

Annie Jacobsen is back with a new tome that should entice anyone who doesn't mind thinking outside the box; or as referenced in her book, as if there is no box.

It's the recently published Phenomena: The Secret History of the U.S. Government's Investigations into Extrasensory Perception and Psychokinesis. Not only is it a well researched and fascinating tale, but there are some lessons for anyone wanting to truly break the mold in business. Read more here. 

Forbes: Why Big Adventure Doesn't Need To Cost A Small Fortune

By SIMON CONSTABLE
As you head off for a summer vacation, there's something key to remember. A big adventure doesn't have to cost a small fortune. In fact, quite the opposite. On top of that, taking a break in an unconventional way will help open your mind to new ideas. Ultimately, that will change the way you do business for the better. Read more here.

WSJ: In Commodity Investing, Currencies Call the Tune

By SIMON CONSTABLE

Investors who want to make money trading commodities would do well to become experts in forecasting currencies.

That’s because changes in the value of the U.S. dollar tend to be accompanied by movements in the opposite direction in the prices for most of the materials and foodstuffs traded on global markets. For instance, from September 2012 through February 2016, commodities prices on average halved while the value of the dollar surged. Read more here.

Copper Wire

Emilian Robert Vicol from Com. Balanesti, Romania, CC BY 2.0, 

via Wikimedia Commons

WSJ: What Is Net Interest Margin?

By SIMON CONSTABLE

Recently, something good has been happening for banks and other lending institutions: The net interest margin has started to widen.

In simple terms, the net interest margin is a measure of bank profitability, and the wider it is, the more profits are to be had. Read more here.

U.S. News: Bad Sentiment May Mean Good News for Wall Street

By SIMON CONSTABLE

Small investors are bearish about the stock market, but don't worry. A bearish sentiment from individual investors may mean this is a perfect time to stake new positions in the stock market.

First, the data: the most recent data from the American Association of Individual Investors shows an above normal level of pessimism about the stock market. Read more here.

WSJ: More Mutual Funds Are Pumping Money Into Small Firms

By SIMON CONSTABLE

It used to be that almost all mutual funds invested their capital only in securities of public companies. But that’s been changing—which could be good news for some small businesses that have big plans.

Thirty-six percent of firms going public in 2016 received mutual-fund financing before their IPO, according to a recent research paper by Michelle Lowry and Sungjoung Kwon, both at LeBow College of Business, Drexel University, and Yiming Qian at the University of Iowa. Read more here.

Photo by Jeremy Bezanger on Unsplash

In the office...

By SIMON CONSTABLE

Photo credit: Greg Stone

Barron's: Steamy El Niño Could Puff Up Rice Prices

By SIMON CONSTABLE

Get ready for a rally in rice. 

A combination of low levels of usable inventory for the grain and the high likelihood of poor growing conditions could cause futures prices to rise. That would reverse a multiyear drop in prices. Agrium (ticker: AGU) and Mosaic (MOS) should benefit as demand builds for crop nutrients and protection. Read more here.

Photo by Faris Mohammed on Unsplash

Middle East Eye: Why it's hard times for the Middle East's petro-economies

By SIMON CONSTABLE

A major intergovernmental agency has just slashed prospects for oil-rich Middle Eastern economies. Worse still, private lenders are predicting credit downgrades. It likely means tougher times ahead for those businesses looking to borrow, as well as a weaker job market, experts say. Read more here.

Street Fight: Comcast Rolling Out a New Local Ad Service

By SIMON CONSTABLE

For local businesses looking for advertising, there’ll be a new kid in town to help this summer. Better still, ad buyers will get the help for free. The service, called Stratasphere, is a new offering from Comcast-owned Strata, which already has three decades in the business of connecting ad sellers with ad buyers.
Read more here.

Forbes: What You Should Love About Trump's Tax Proposal

By SIMON CONSTABLE

Wednesday we got a look at how the Trump Administration wants to overhaul the U.S. tax system.

While it is not perfect there are some things to love about the proposal.

First, remember that it is a wish list. That is to say, not everything on the proposal will come to pass, but some of it shall. Hopefully, what gets enacted are some of the better ideas. Read more here.

Forbes: It's The Corporate Tax Cut That Will Drive Growth

By SIMON CONSTABLE

President Trump is set to announce tax reform today. Anyone interested in economic growth should focus on what he says about corporate taxes.

While the likely proposal will likely involve changes to individual tax rates, it is the corporate tax rate that has the potential to spur economic growth more than what will likely happen to individual taxes. Read more here.

U.S. News: Does OPEC Matter Anymore?

By SIMON CONSTABLE

There was once a time when oil market traders could win or lose based on just a few words from OPEC oil ministers. These days, not so much.

For investors, there is an important question: Is OPEC even worth worrying about?

Just as with many things in investing, the answer is nuanced. Read more here.

Pensions & Investments: How institutions caught gold fever last year

By SIMON CONSTABLE

Large money managers and investors dove into gold bullion and other precious metals in a big way last year. They did so through exchange-traded funds. Read more here.

 

Photo by Scottsdale Mint on Unsplash

Forbes: Why Slavery Wasn't Just A Monstrous Evil, It Was Also Bad Economics

By SIMON CONSTABLE

It should be clear to all right-thinking people that slavery was and is a moral abomination. Most would leave the matter at that, hoping that never again will the practice become entrenched in any society.

Not so, Robert E. Wright, chair of political economy at Augustana University and treasurer of Historians Against Slavery. He decided to delve further into the matter, looking at the economics of the situation.

The result is his recently published book, The Poverty of Slavery. Read more here.

Middle East Eye: Saudi sale of Aramco a major economic challenge

By SIMON CONSTABLE

For more than half a century, Saudi Arabia and crude oil have gone together like baseball and hotdogs. But that may be about to change.

One young prince wants to ditch the country’s dependency on oil exports, with the process starting in earnest next year when there are plans to sell the state-owned oil company, Aramco. It’s a high stakes move with the future prosperity of the kingdom depending on the success of the effort.

Few observers expect the process to be smooth. Worse still, the world will be watching closely to see if the kingdom is serious. Read more here.

U.S. News: Why You Should Learn Accounting Now

By SIMON CONSTABLE

There's no reason for the average investor to not know some basic accounting.

The reaction of most people will be something akin to "Ugh!" and "Oh no, not chopped liver again!" But smart people who want to get even smarter will learn accounting.

There's also a bonus, you can now do so for free. Here's the why and the how:

Learning the language. "Whenever you move to a new world [or country] you need to learn the language," says Stephen Wood, chief market strategist of Russell Investments in New York. If you want to do well in France then you'll need to learn French; if you want to do well in Germany, then at least an introduction to German would be helpful.

When it comes to investing you need to learn the language of business, which is accounting.

"If you aren't conversant with the language then you can't expect to do well," Wood says. Read more here.

Forbes: Public Companies Can Still Get A Free Ride With Stock Options

By SIMON CONSTABLE

Some companies can still get an (almost) free ride on stock options.

They might be able to expense a mere fraction of what an executive might receive from option grant.

Companies might also get hammered.

Both outcomes have their root in the quirks of an accounting standard that came into effect a little over a decade ago. In fact, now that 2016 annual reports are being published it's worth a look at the problems. Read more here.

U.S. News: 4 Reasons to Be Worried About the Economy

By SIMON CONSTABLE

It's time to worry about the economy, and that's not just because they call economics the dismal science.

The reason is because there is a lot to be concerned about. All is not well with the economy, despite the stock market surge since the election last November.

Credit problems lie ahead. If we learned nothing else in the financial crisis of 2008 it is that credit is what makes the business world go around. It's the grease that lubricates the wheels of capitalism. And that's one place where the stresses are starting to show. Read more here.

Middle East Eye: Dumping Dollar Would Damage Iran Without Hurting U.S.

By SIMON CONSTABLE

Recent threats from Tehran to dump the US dollar are likely to be ineffective in their aims and harmful to the Iranian economy, economists say.

The move came earlier this year in response to US President Donald Trump’s ban on people travelling to the US from Iran and six other predominantly Muslim countries.

At that time, an Iranian central bank official indicated that the country’s financial reports would abandon using the dollar as the unit of accounting. Instead the bank would adopt a different currency, or a basket of currencies, which would have a “high degree of stability,” according to the official. Read more here.

WSJ: Why Commodity-Index Investing May Be Futile

By SIMON CONSTABLE

Investments that track broad stock indexes have become the favorite of many investors and analysts for long-term returns that are hard to beat. But index tracking hasn’t done so well in the commodities market.

Stock investments that track indexes such as the S&P 500 have reliably rewarded long-term investors. For example, since January 1970, investors who held the S&P 500 for at least 12 years would always have had positive returns including dividends, says Sam Stovall, chief investment strategist at CFRA Research. Read more here.

Felled Trees

Photo by Markus Winkler on Unsplash

WSJ: What Are Late-cycle Stocks?

By SIMON CONSTABLE

The term “late-cycle stocks” is being frequently used once again by investment professionals. The term refers to the types of stocks that tend to outperform later in the business cycle, when the use of resources and labor gets closer to full capacity and demand for materials such as copper, steel and energy tends to outpace supply.

Read more here.

U.S. News: What Triggering Article 50 Means for Investors

By SIMON CONSTABLE

Months after voters in the U.K. decided by referendum that their country should withdraw from the European Union, Prime Minister Theresa May has triggered Article 50 to formally depart from the economic and political partnership in 2019.

And while the die is irrevocably cast – Article 50 cannot be withdrawn without unanimous consent of the other 27 EU members – the implications for investors and global financial markets may not be as bad as once feared. And there's money to be had for those who can make the right moves. Read more here.

Forbes: How Jean-Claude Juncker's Ohio Rant Is Making A Joke of The E.U.

By SIMON CONSTABLE

Last week's outburst by the  European Union's boss is comical at best. Worst than that, it's only his latest diplomatic snafu. He's making the whole organization look desperate.

I write of course of Jean-Claude Juncker who threatened that he would help Ohio campaign for independence from the U.S. if Donald Trump didn't stop encouraging European countries to follow Britain out of the E.U.

But there's where Juncker sounds like a hick who just showed up on the world stage rather than the master of realpolitik that one would hope for from a world leader. Read more here.

Photo by Sara Kurfeß on Unsplash

U.S. News: Stop Watching the Fed's Every Move

By SIMON CONSTABLE

You need to stop worrying about what the Federal Reserve is going to do next. It's most probably just making you anxious.

This advice might seem to be at odds with the hullaballoo emanating from TV business news where some commentators think that the Fed's next utterance is the be-all and end-all.

For some people, watching the Fed is rightly an obsession. But such individuals are frequently employed in roles managing tens of billions of dollars of money, and where nuances in the Fed's actions may mean the difference between a profit or a loss which can often be counted in millions.

Most of us aren't in those jobs. Here's some detail on why it mostly doesn't matter what the Fed says or does. Read more here.

WSJ: The Key to Financial Discipline? It May be as Simple as Taking a Class

By SIMON CONSTABLE 

It is well-known that successful investing requires patience and the ability to delay gratification. The question has long been: Can such discipline be taught?

A recent study suggests it can. Read more here.

Forbes: What A Wine Connoisseur Taught Me About Business

By SIMON CONSTABLE

When you meet a wine connoisseur you expect to learn about wine. But I learned something far more useful when I met with Mark Oldman, author of How to Drink Like a Billionaire: Mastering Wine with Joie de Vivre.

Better still, I don't know if he was aware of the matter.

The key is that Oldman knows wine and he knows rich people. It is the intersection between the two that gave me an insight into how to be better at business. Read more here.

Barron's: Lumber Prices Headed Higher

By SIMON CONSTABLE

A mini-trade war between the U.S. and Canada is set to send lumber prices higher.

At issue is the price Canadian foresters charge to cut down a tree, which is known as stumpage. The Canadians charge less than their U.S. counterparts, explains Kevin Mason, managing director at ERA Forest Products Research in Vancouver. U.S. producers believe the price is unfairly low and is undercutting U.S. lumber activity. 

The immediate result of any new tariffs or trade restrictions would be reduced supply of wood to the U.S., where demand for housing lumber is likely to rise sharply. The effects have already spread from the outdoors to Chicago’s trading floors. Active-month contracts closed Friday around $377 per 1,000 board feet, up from around $338 at year end. But there’s potential for further gains as a tariff-free solution looks unlikely before a preliminary ruling set for April 24. Read more here.

Photo by Irena Carpaccio on Unsplash

Forbes: 13 Reasons To Love Open Plan Offices

By SIMON CONSTABLE

Open plan offices have gotten too much of a bad name. It's a shame because they are far better than the alternative which is the ubiquitous cube, or cube farm, as I call the plural.

Here's why you should love the "no walls" working arrangement. Read more here.

Forbes: The Stock Market's Half Trillion Dollar Problem

By SIMON CONSTABLE

The stock market has a problem.

It has become dependent on new money from those companies buying back their own stock.

The amount of money coming into the market from this source is huge. Read more here.

U.S. News: The Time Might Be Right to Invest in Argentina

By SIMON CONSTABLE

Argentina has a rightly deserved reputation as a perennial economic basket case, but that doesn't mean the malaise will continue.

Indeed, it seems things might be turning the corner, and some investors are starting to get excited. A recent report from Brown Brothers Harriman says there has been a "significant increase recently" from clients about onshore investments in Argentina. Read more here.

At The Studio...

By SIMON CONSTABLE







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Pictures by Greg Stone copyright Greg Stone 2016-2017. 

Forbes: Why The Economics Of Scottish Independence Don't Make Sense

By SIMON CONSTABLE

New demands for another referendum on Scottish independence make some sense politically. For the Scottish economy, not so much. Read more here.

Forbes: Where Are The Tax Cuts, Mr. President?

By SIMON CONSTABLE

Since taking office a few weeks ago Donald Trump has done some good things for the economy, such as lifting the burdensome regulatory apparatus imposed by the previous administration.

What's lacking is major tax reform. Here's why it needs to go to the top of the agenda right now. It should stay there until completed. Here's why:

Gage Skidmore from Peoria, AZ, United States of America, 

CC BY-SA 2.0, via Wikimedia Commons

U.S. News: Nigeria Stocks Are a Risky Investment

By SIMON CONSTABLE

Nigeria's economy is still a mess. Unfortunately, it may be a while before things right themselves.
Like many energy-rich countries, Nigeria's economy got hit hard when oil prices plunged to $26 a barrel in February last year. To put the size of the move in perspective, oil was trading at more than $100 in mid-2014.

Unfortunately, the rebound in crude prices hasn't helped Nigeria much – the list of problems for the country's economy is so long it is hard to know where to start. Read more here.

Forbes: Why China's Leaders Should Start Freaking Over Pork Prices

By SIMON CONSTABLE

China's leaders should feel uneasy right now. The reason comes down to the economics of food.

The price of pork jumped recently in the communist country, up 7.1% in January, according to a report from Reuters. While that may not seem like a reason to worry, those Chinese party officials who understand what was really behind the 1989 Tiananmen Square uprising will likely start shifting in their seats nervously. Read more here.

U.S. News: Embrace Anxiety and Invest in Stocks

By SIMON CONSTABLE

Some people still aren't getting the message when it comes to saving for retirement.

They are avoiding the stock market like it's the plague. Sure, stocks can go down as well as up and that might make you nervous. But now is the time to get over the anxiety.

Data shows that on average people know that stocks are a better investment over long periods of time. But averages hide the behavior of some people that is detrimental to long-term investing. Read more here.

WSJ: What to Do When Your ETF Shuts Down

By SIMON CONSTABLE

The exchange-traded-fund industry is quickly becoming a dog-eat-dog world.

While ETFs have enjoyed explosive growth over the past decade, a record number of them—127—closed up shop last year, and liquidations are showing no sign of slowing.

Here is a look at what is fueling the closure trend and what happens to investors when the plug gets pulled on an ETF.

WSJ: What Is the Shadow Economy and Why Does It Matter?

By SIMON CONSTABLE

The shadow economy is perhaps best described by the activities of those operating in it: work done for cash, where taxes aren’t paid, and regulations aren’t strictly followed.

Most of the businesses operating in the shadow economy aren’t what most people would think of as criminal enterprises, says Cristina Terra, professor of economics at Essec Business School in France, and author of the book “Principles of International Finance and Open Economy Macroeconomics.”

Read more here.

Forbes: Why It Might Be Time to Bet On Foreign Stocks

By SIMON CONSTABLE

It's time to get your investing passport. Foreign stocks look ripe for a rebound, at least based on history.

Read more here.

Why It Might Be Time to Bet On Foreign Stocks from Constable Confidential on Vimeo.

Forbes: Why Emerging Markets May Go Limp

By SIMON CONSTABLE

Strong emerging markets stocks and a strong dollar don't usually go together too well.

That's why anyone considering investing in places like Argentina, Brazil, Thailand, and South Africa, might want to get ready for a bump in the road.

Read more here.


  Why Emerging Markets May Slump from Constable Confidential on Vimeo.

U.S. News: Emerging Markets Are Full of Investing Risk and Reward

By SIMON CONSTABLE

Emerging market stocks have been on a tear lately, and some say the rally could continue, but there are reasons to be cautious. Anyone wanting to invest in the sector should understand the risks and potential rewards.

The MSCI Emerging Markets index, which tracks stocks in a variety of emerging market countries, has shot up more than 10 percent this year versus where it ended last year.

That's a sizable move, especially when an annualized stock return of 10 percent is considered healthy, never mind such a move in less than two months. Will it continue? Maybe not. Read more here.

BBC Capital: This Is Why The Boss Will Crush All Your Good Ideas

By SIMON CONSTABLE

Surely you’ve heard the plea from on high at your company: we want more innovation, from everyone at every level. Your boss might even agree with the sentiment — because, of course, who doesn’t like innovation? It’s good for everyone, right?

Yet when it comes to innovating at your job it might be better to lower your expectations — and then some. Your idea is far more likely to die on your boss’s desk than it is to reach the CEO. Read more here.

Photo by CHUTTERSNAP on Unsplash