Gold prices hit a five year low earlier this week and some have attributed the decline that Chinese investors are selling to meet margin demands. There’s also less Chinese demand for copper, silver, iron , oil and palladium and that decreased demand will continue through the rest of the year. You also have to factor in the relation of a stronger US Dollar to weaker commodity prices overall.
See more about Gold and Oil
There hasn’t been much to write home about when it comes to IBM stock. It’s been all negative, with a lackluster second quarter, thirteen quarters in a row with a negative performance, dubbed one of the most universally despised companies in the world, blah, blah and more blah. It’s depressing. So, why rethink IBM stock? Because IBM has over$12 billion cash from last year, its dividend yield is a decent 3.2%, and because it has increased its dividend by 18% per year over the past five years. Bob Ciura makes a case for IBM below
It’s no secret that IBM (NYSE:IBM) is struggling. IBM is one of the most universally despised companies in the world. The stock has been on a nearly unimpeded decline for a disturbingly long time. Shares of IBM are down 17% in the past year. In fact, IBM was the worst performing stock in the Dow Jones Industrial Average in both 2013 and 2014. There don’t seem to be enough negative things to say about IBM.
The criticism of IBM got even more heated after the company’s second quarter earnings, when IBM posted its 13th quarter in a row of declining revenue. One bright spot was the company’s progress in what it calls its ‘strategic imperatives’, which are higher-growth businesses like big data, the cloud, and security. Unfortunately, strong growth in these areas wasn’t even enough to satisfy analysts, who were quick to point out that these businesses are still too small to have any material impact.
But it’s worth digging deeper into IBM’s turnaround to find out whether this is actually true.
Strategic Imperatives Are Not Getting Enough Credit
It seems nobody is giving much credit to IBM for its strategic imperatives, but this is a mistake. These businesses are growing at impressive rates. Cloud revenue soared more than 70% adjusted for currency and cloud delivered as a service has reached an $8.7 billion annualized rate. Social revenue jumped more than 40% year to date excluding currency, and mobile revenue has more than quadrupled. Collectively, the strategic imperatives grew revenue by more than 30% over the first two quarters of the year adjusting for currency and divestments.
The bearish argument is that $8 billion represents a drop in the bucket for a company the size of IBM, and therefore the strategic imperatives are too inconsequential to stem the decline in IBM’s other businesses. But again, it’s worth noting that excluding foreign exchange and divestments, the overall decline is very modest. And, should those businesses keep growing anywhere close to 30% per year, it won’t take long at all for those businesses to become a very important part of the overall company.
This is already starting to happen. IBM stated in its 2014 annual report that in 2009, its strategic imperatives represented just 13% of its total revenue. Last year, these businesses accounted for 27%, more than doubling in that time. This year, the percentage will be even higher, and that should only continue going forward.
It’s the stuff of dreams. I like to call it “mailbox money”. It’s not for everybody and it’s not very exciting, but man, it works. In fact it works really, really well. Here’s one guy’s story that collects $450,000 from his “mailbox”.
Retired since 1975, Harry is an experienced investor who has been able to survive and thrive from his initial investment decisions. When I see him, we talk mainly about the stock market, and how to be successful in it. During my last chat with Harry, I asked him whether he has ever sold a stock. His answer surprised me. He said, “No.”
Think about that. Here is someone who invested roughly $700,000 in a basket of stocks, and has never sold a single company he bought in the last 40 years. That is not to say he has not bought anything since 1975. He does reinvest his dividends in new companies, and due to mergers and acquisitions, he will come into new cash that he can invest. He told me this, “I have over five million people working for me right now, and they pay me 9¢ each to work for me.” He told me he is paid $450,000 in dividends from his initial investments in 1975. This is a man who literally survives primarily on his dividend income.
See the full story by Thomas Pound
A majority of investors today are well versed in the myriad of investment vehicles and strategies available for creating and maintaining wealth. Also, like most investors we all have our own comfort zone when it comes to investing in some of these strategies. So it came as no surprise when a survey conducted by John Hancock showed that up to 70% of these investors prefer to have some control of where their money is actually going. Read the full article below…
BOSTON, July 20, 2015 /PRNewswire/ — Nearly 70 percent of investors say they act as partners with their financial advisors in exploring options and making final decisions regarding financial matters, according to a recent John Hancock survey, while one quarter say they accept what their advisor recommends for them. Many investors feel that listening and partnering pays off, as 34 percent report that the value of their investments has increased substantially due to their advisors’ recommendations.
The findings were drawn from the second quarter 2015 John Hancock Investor Sentiment Survey, a quarterly poll of affluent investors. The survey measures investors’ feelings about the current economic climate and their evaluations of what represents a good or bad investment given the current environment. The poll also asks consumers about their confidence in reaching key financial goals and likelihood of purchasing financial products and services.
Asked how they liked to interact with their financial advisor, the most popular choice was on a face-to-face basis (70 percent), while nearly as many indicated a desire for telephone contact. Very few cite text messaging (five percent), Skype/video chat (two percent), social media or podcasts (less than 0.5 percent) as their communication preference.
The survey found that investors primarily look to advisors for a plan to manage their investments (70 percent). Two-thirds work with an advisor to develop a retirement plan. Half of those surveyed said they look to their advisor to produce a comprehensive financial plan for major life events and goals. Only 20 percent of investors say their advisors made recommendations or a plan to deal with the risk of death, disability, critical illness or other risks.
When it comes to improving their experience with a financial advisor, 30 percent of investors say more in-person interaction would improve their experience. Nearly 20 percent say that regular electronic updates about the account are a good way to improve client experience.
About the John Hancock Investor Sentiment Survey
This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,064 investors were surveyed from May 11th to May 22nd, 2015. To qualify, respondents were required to participate at least to some extent in their household’s financial decision-making process, have a household income of at least $75,000, and assets of $100,000 or more. The data were weighted by age and education to reflect the population of Americans matching the survey’s qualification requirements. In a similarly-sized random sample survey, the margin of error would be plus or minus 3.1 percentage points at the 95 percent confidence level. Due to rounding and missing categories, numbers presented may not always total to 100 percent.
About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Assets under management by Manulife and its subsidiaries were C$821 billion (US$648 billion) as at March 31, 2015. Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife can be found on the Internet at manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.
SOURCE John Hancock Financial
CONTACT: Beth McGoldrick, (617) 663-4751, email@example.com
After a pretty impressive Bull Market run of over 1400 days, the S&P 500 seems to be in a sideways pattern for the moment and it has a lot of investors nervous. The old adage of “what goes up, must come down” comes into play. Is the market regrouping or headed for a major correction? No one really knows and some people like Andy Crowder really don’t care. In his mind, it doesn’t matter if the Market moves up or down, he still makes money.
The S&P 500 has entered the third longest bull market in U.S. stock market history.
What is even more amazing is that during this bull market run the S&P has gone approximately 1,450 days without a 10% correction. The steady climb higher has no doubt made almost everyone exposed to equities a winner since 2009.
But the charge upward has slowed down dramatically over the past eight months. Since the beginning of November 2014, the S&P 500 has pushed higher roughly 5%, and most of those gains came in the last two months of 2014.
The market has remained relatively flat in 2015, vacillating between slightly positive and negative. There is no doubt that uncertainty has entered the market.
So, as an investor, are we supposed to sit on our laurels and allow Mr. Market to dictate our returns?
We all look like financial geniuses when the market is going higher. Investors take all the credit for their success when the market is soaring, but blame other factors, such as geopolitical concerns or central bankers, when investments sour. The talking heads make sure the culprits are front and center to make the blame game that much easier.
But, I don’t really care.
A recent article by Cullen Roche compares a leveraged stock portfolio to using steroids. Cullen goes on to explain that steroids can be a very useful and effective strategy for treating medical conditions to a certain extent as long as it isn’t abused. There are similarities with using leverage on your stock picks. See the original article below…
Barry Ritholtz has a new article on Bloomberg discussing San Diego County’s firing of a risk parity firm that used to manage part of its pension. Risk parity strategies often engage in using leverage. Cliff Asness, who runs AQR, a firm implementing risk parity approaches (among others), hated Barry’s piece and called it “facile” “innuendo”. He then referred to a piece explaining why he likes leverage in a portfolio at times. So, who’s right?
Leverage is a bit like steroids. Steroids are neither good nor bad. They tend to magnify the effect of something and that can be good or bad depending on how it’s used. If you use steroids in specific targeted ways they can be an effective medical treatment. Likewise, if you abuse them they can be a destructive and unnecessary supplement.¹ Leverage is essentially the same thing. It will magnify the effect of a portfolio’s outcomes. There are very reckless ways to do this and very safe ways to use leverage. But one thing is almost always undeniable – leverage will cost you. And that’s the kicker.
You can form your own opinion about how much “Steroids” you can handle in your portfolio.
Finding stocks with a clear long term upward pattern is pretty exciting for most investors and Zacks shows three stocks that you can invest in right now. You can ride the on going momentum now and/or short the stocks at a later time. See the full article at Breakout Stocks
Florida’s housing market wrapped up 2014 with more closed sales, more new listings and higher median prices compared to the year before, according to the latest housing data released by Florida Realtors®.
“In December and throughout 2014, we’ve seen positive signs that Florida’s housing sector is on a steady, sustainable path,” said 2015 Florida Realtors President Andrew Barbar, a broker with Keller Williams Realty Services in Boca Raton. “Sales are moving at a steady, moderate pace and home prices are stabilizing. Florida’s economy continues to grow, more jobs are being created and mortgage interest rates remain at historically low levels, which will help drive the state’s housing market forward in 2015.”
Statewide closed sales of existing single-family homes totaled 22,414 in December, up 15.8 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.
New listings of single-family homes for sale last month reached 24,840, up 2.9 percent year-to-year. Meanwhile, the statewide median sales price for existing single-family homes in December was $185,000, up 6.9 percent from the previous year. December marked the 37th month in a row that statewide median sales prices for both single-family homes and townhome-condo properties rose year-over-year.
According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in November 2014 was $206,200, up 5.6 percent from the same month a year ago. In California, the statewide median sales price for single-family existing homes in November was $445,280; in Massachusetts, it was $330,000; in Maryland, it was $250,424; and in New York, it was $227,500. The median is the midpoint; half the homes sold for more, half for less.
Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 9,466 units sold statewide last month, up 11.3 percent compared to December 2013. Meanwhile, new listings of townhome-condos reached 12,438 last month, up 3.4 percent year-to-year. The statewide median for townhouse-condo properties was $149,000, up 8.4 percent over the previous year. NAR reported that the national median existing condo price in November 2014 was $199,000.
“The December numbers are strongly positive for both the single-family and condo markets,” said Florida Realtors Chief Economist Dr. John Tuccillo. “We are seeing the steady and sustainable growth that has characterized the market the entire year continuing as the year ends. Of particular note is the inventory levels in the balanced market range: We’re keeping a close eye on the lack of inventory in the lower price ranges, but by and large, the market is in very good shape.”
Statewide closed sales of existing single-family homes totaled 244,543 in 2014, up 8.1 percent compared to the 2013 figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations.
New listings for existing single-family homes rose 7.4 percent in 2014 compared to 2013. The statewide median sales price for single-family existing homes in 2014 was $178,000, up 5.3 percent from the previous year.
Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 108,354 units sold statewide in 2014, down slightly (-1.2 percent) from 2013. The closed sales data reflected fewer short sales in 2014 compared to the previous year: Short sales for condo-townhouse properties declined 58.2 percent while short sales for single-family homes dropped 50.7 percent.
New listings for townhouse-condos for the year increased 2.2 percent compared to a year ago. The statewide median for townhouse-condo properties in 2014 was $140,000, up 9.8 percent over the previous year.
At the end of 2014 and also for December 2014, inventory for single-family homes stood at a 5.2-months’ supply, while inventory for townhouse-condo properties was at a 5.9-months’ supply, according to Florida Realtors.
Florida Realtors Chief Economist Dr. John Tuccillo said, “We close the books on 2014 on a very positive note. The year marks the transition of the Florida real estate market from a rapid recovery to a path of steady growth. Virtually all the metrics for the market are moving in the right direction at levels that can be sustained.”
The interest rate for a 30-year fixed-rate mortgage averaged 4.17 percent for 2014, up from the previous year’s average of 3.98 percent, according to Freddie Mac.
To see the full statewide housing activity reports, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the December 2014 and the Year End 2014 data report PDFs under Market Data at: http://media.floridarealtors.org/market-data
Florida Realtors®, formerly known as the Florida Association of Realtors®, serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to its 140,000 members in 58 boards/associations. Florida Realtors® Media Center website is available at http://media.floridarealtors.org.
SOURCE Florida Realtors
CONTACT: Marla Martin, Media Relations and Communications Manager, orJeff Zipper, Vice President of Communications; 407/438-1400, ext. 2326 or 2314
Dr. Michael D. Ames, Professor of Management at California State University Fullerton and founder of University’s Small Business Institute, wrote a textbook twenty years ago that outlines some of the struggles that small business owners face when launching and managing their company. This textbook, “Small Business Management,” has been so influential that the Small Business Administration (SBA) cites it on their website.
The original list found on the SBA’s website consisted of 10 major reasons for small business failure, some of which include lack of experience, over-investment and poor inventory management.
While Dr. Ames says that list and his textbook still offer small business owners very valuable information, he “would overlay it with another list of 20 years or more of experience.”
In an exclusive interview with loans.org, Dr. Ames expanded on each of the 10 SBA-cited reasons for small business failure, providing further insight into what exactly it takes to be a “success” in today’s ever-changing economic climate.
One highlight of the interview points to Dr. Ames’ discussion of insufficient capital.
Dr. Ames said that many businesses spend huge amounts of money before they ever understand what their targeted demographic actually wants.
He said business owners end up “building what they want versus what the customer needs.” Then, when all is said and done (and often when it’s too late), the previously-hopeful entrepreneur looks back to see they’ve gone too far, fallen into too much debt and are at a point where they can’t recoup.
For Dr. Ames’ input on the remaining top 10 reasons why small businesses fail, please visit the full article at http://loans.org/business/articles/top-ten-reasons-small-company-fail.
For more articles, news, and frequently asked questions on entrepreneurship and commercial financing, please visit http://loans.org/business, a page dedicated to business-related information.
CONTACT: Alex Gomory, 909-784-2476, firstname.lastname@example.org
Figuring out how to exit a business usually brings up a lot of emotions for business owners. After all, they’ve poured their time, energy, heart, and soul into making it grow and helping it succeed. It’s been their livelihood and life. Of course the thought of exiting the business makes owners uncomfortable.
All the more reason, says Bill McBean, that they should approach this business decision just like any other: Make sure it’s well thought out and based on facts.
“Being in a position to dictate your own exit strategy should be the highlight of your career because it epitomizes the entrepreneurial dream: Go into business, be successful at it, and leave under your own terms,” says McBean, author of the new book The Facts of Business Life : What Every Successful Business Owner Knows That You Don’t (Wiley, October 2012, ISBN: 978-1-1180949-6-9, $24.95, www.FactsOfBusinessLife.com). “Unfortunately, many owners are reluctant to make plans to walk away, and thus, they leave too many critical decisions to chance.”
The truth is, writes McBean, rarely do business owners talk openly about exit strategies for their businesses.
And that’s unfortunate for two reasons. First, if you don’t pick the time to exit, something or someone else will. And secondly, the best time to sell or enact a succession plan is when you don’t have to.
“Always keep in mind the one key difference between the decision to exit your business and every other business decision you’ve made as its owner: Now you need to take into account not just what’s best for the business but also what’s best for you,” says McBean. “Because for the first time since the company began, what’s best for the business and what’s best for you are not necessarily the same thing.”
Here are some things to consider:
Don’t allow leadership to suffer. You haven’t left your company yet, so you need to continue to proactively lead. Especially if you intend to sell the company or pass it to a successor, it needs to remain cutting-edge and competitive.
Be aware that you wear two hats. When creating an exit strategy, it’s important to make sure that you have detailed, accurate information about your company and your plans to exit it so that you can make sound decisions on both fronts.
Focus on your assets. Have an accurate grasp of your business’s assets. Remember, employees, processes, and procedures, as well as customers have value.
When making plans, play the long game. Whenever you can, make your exit plans as far out as possible. This includes three key factors:
- Identify who would be your best or targeted buyer.
- Assess the value of your business today and compare this to what you want to have when you exit.
- Consider when would be the optimal time to exit, business-wise and personally.
Be ready to market in a whole new way. If you decide to sell your company, in addition to marketing your product and business brand, you will need to successfully market your company. This entire process will require a new focus, because working toward an “end game” will alter some of your objectives and goals, which in turn requires a new business plan.
Strategize like a winner. The ultimate goal is to sell your business for its maximum value and have it structured to minimize the tax bite. Your battle strategy will include figuring out how to showcase your company, making it ready for sale, putting together the information buyers will need to evaluate your business, and much more.
Put your business knowledge to work. The more you know about the market, how competition works, maximizing your assets, etc., the more accurately you will be able to value your company and the easier it will be to justify the company’s overall worth.
“Ultimately, the more you educate yourself and the more you plan, the more likely the exit choice you make will be the right one,” concludes McBean. “Remember, your decisions and focus at this time will determine what your company’s and your own legacy will be. And I don’t believe that’s something you want to leave to chance.”
About the Author:
Bill McBean is the author of The Facts of Business Life : What Every Successful Business Owner Knows That You Don’t (Wiley, October 2012, ISBN: 978-1-1180949-6-9, $24.95, www.FactsOfBusinessLife.com).
DeHart & Company Public Relations
Web Site: http://www.FactsOfBusinessLife.com