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.