[note: an earlier version of this post originally appeared on my Yahoo! Finance page.]
A few months ago, Apple (AAPL) posted one of the greatest quarterly beats in the history of capitalism and its market cap–already the world’s largest–officially doubled the size of the next closest company, a little energy outfit you might have heard of called Exxon (XOM). Nonetheless, I wrote a piece for CNBC.com at the time saying that if I had to choose between the two stocks to buy and hold for the next twenty years, I would pick up my iPad, log into my brokerage account and order a whole bunch of XOM.
With both companies releasing earnings this week, it seems like a good time to revisit that call. Apple annihilated analysts’ expectations again on Monday. Exxon also beat, but its profits were off by almost 50 percent and its stock has been the second worst performer in the Dow, down 5 percent since New Year’s Day and over 13 percent in the last 12 months. The oil giant has even ceded the number two spot in market cap to Microsoft for the time being.
So, have I changed my mind? Do I now think AAPL is a better buy than XOM? The short answer is: no. The long answer is: absolutely not.
[note: this post originally appeared on my Yahoo! Finance contributor page.]
Last week, I spent three days in New York City at the annual IPAA (Independent Petroleum Association of America) Conference. Like most people, I’ve been leery of energy stocks in recent months. But I left the conference with a different mentality.
As unlikely as it seems, it might be time to go bargain hunting in the oil patch.
Apologies for the sporadic blogging of late. I’ve been travelling a fair amount and I also wrote a piece for CNBC.com on the Five Ways to Spot a Dead Company Walking.
Two important and closely connected events took place in the world of finance since my last post. First, former Fed chair Ben Bernanke announced that he was taking a job as an “advisor” at the massive hedge fund Citadel Group. Then the stock of Goldman Sachs hit $200 for the first time since January of 2008. You might not think these things are related, but to me, they’re inextricably linked–and extremely dispiriting.
More than half a century ago, President Eisenhower warned the nation about the burgeoning Military-Industrial Complex. That monstrous public-private hybrid now sucks up more than half of all discretionary spending. But these recent events prove that the Wall Street-Washington Complex might be even more dangerous.
Just in time for tax day, I wrote a post on my Yahoo! Finance contributor page about the biggest tax mistake you can make as an investor. Put simply, the spread between short- and long-term capital gains tax rates is so giant now, you’re better of lighting your wallet on fire than taking profits on investments you’ve held for less than a year. At least all that burning cash might be pretty to look at.
Speaking of taxes and stupid ideas, the New York Times asked a bunch of experts about the worst tax breaks. Their answers should be familiar to regular readers of this blog. I’ve written on just about all of them at some point.
We will be hearing a lot about tax reform in the months ahead, as every presidential candidate will crow about their plans to rein in, reduce, and simplify our country’s insanely complex tax code. The chances that any of these ideas will amount to anything but empty promises on the campaign trail are close to nonexistent, of course, but it can’t hurt to dream, can it?
[note: this post originally appeared on my Yahoo! Finance contributor page]
For the past few weeks, Wall Street pundits and prognosticators have been loudly citing every hint of bad economic news as a reason the Fed shouldn’t follow through with its pledge to boost interest rates. “Corporate earnings are down!” they’ve shouted. “Job growth is decelerating! Inflation dropped to zero again! We can’t raise rates in this environment!”
It’s time to stop listening to these market Cassandras. We not only should raise rates, we must raise rates.
[note: a slightly different version of this post originally appeared on my Yahoo! Finance contributor page]
I’m a sports fan, but I don’t plan on watching the Final Four this weekend. Sure, the players are inspiring and the games are usually exciting and dramatic. I just can’t bring myself to tune in to a bunch of unpaid employees generating billions for one of the most corrupt rackets in the world, the NCAA. But–as regular readers of this blog know all too well by now–my distaste for so-called amateur athletics pales next to the utter disgust I feel for our broader system of higher education.
Talk about an industry desperately in need of disruption.