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As it is rightly said, public memory is short!!! I was in Mexico City a few months ago and noticed the scooter craze, another massive money burner. It is a free resource after all. I took a picture as a reminder and later on, as I was sitting in the magnificent garden near St Anna, I did my homework on the phone. Where have we heard that before? But somebody is paying for those slick presentations and somebody is paying for those scooters, the ultra-expensive office space in Stockholm and greasing the wheels of city governments.

My take is like it happened with WOW Air, Primera and the like a lot of pension funds and private banks from Scandinavia are going to eat a whole lot of losses. It is a little more nuanced than that. The e-scooter companies are heavily subsidized by Chinese manufacturers. In reality, the value offered by the scooters is both lower and more expensive than what I talk about above.

You have to re-charge them — which means paying people to find low-charge scooters, haul them to places to charge, etc. You also have to reposition them. The scooters themselves are an ecological nightmare. But electric! Save the environment! Less traffic! Share service uses startup funds to buy a jillion scooters and sell investors on its soon-to-be-doomed business model. Owner of scooter factory of course borrowed to the hilt against his ownership stake, and bought options in his own business through third-party cronies and shell corps just as he was quietly funding the share company.

The only question is how much central bank free money he can pull down before cashing everything out! There are always scams getting funded by mistake, which destroy genuine capital. With rates too low, investors are too desperate for yield and fund too many bonehead scams. You have to collect a helluva lot of scooters to end up with som earnings after deducting all costs for fuel, truck neded osv ad nauseam.

I do this about 47 times out of However, a surprising number of people do gamble with their investments, including but definitely not limited to inexperienced millennials — always the search for the quick, easy, no-skill-required fortune. Just enough of these cockamamie dumb-luck fairy tales come true to inspire millions of others to do the same stupid things. Think creative, people! Get outside your boxes! Evolve with the future before us…that future is ZIRP!

Private valuations are utterly meaningless and the I. My girlfriend owns a smoothie restaurant. If she I. If the underwriter did their homework, the share price offered should be reasonably close to the price at the end of the first trading session.

If it is too high, the newly public company lost out on capital. If it is too low, traders and investors paid too much for their stock. Some measure of enterprise value should trump equity value, and especially nonsense private valuations. You should fully understand that you have forever precluded working on Wall St as an investment banker or capital market specialist.

Equally, your description of share price dynamics is utterly naive. The point of having a first day pop is to try and generate traction for the stock. A stock whose first purchasers have made money, is a stock with a base of believers who will enable the stock to climb higher. Even better, if the hype can turn into a frenzy, then everybody wins except buyers.

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Real estate is the best market to invest, unless the economy is about to collapse, then you are left holding the bag on overpriced crap that no one wants to buy off you, even when you tell them the exorbitant prices you had to pay to get it. Just like a used car salesman. Negative interest rates…negative bond yields…investors slavering to buy the stock of corporations losing billions…. I have been following another company, which makes WeWork look incredibly good.

The company was valued at billions of dollars, despite clearly being worthless and I was short the shares. Most shocking was that Softabank poured lots of money into this company at peak valuations right before it imploded and went to nearly zero. The fact that Softbank invested so much money in a company like this makes me wonder about the quality of their other investments.

What do we know about them? Could Softbank really be the big bubble? Softbank is playing by the rules the markets have created. If you pay more for a company, it is worth more, regardless of revenue or profit. If you charge more rent, your property is worth more, regardless of whether it is actually rented. Fake prices, Fake markets. Softbank was founded by Masayoshi Son. He made serious bank through buying early into Yahoo and Alibaba. So it may be that Son is actually a one hit wonder Alibaba.

Alibaba in turn was a play on the growth in the Chinese economy and market. I agree with your comment not to invest in SoftBank, however, everything is information and is useful in certain ways. Perhaps they are not investing for today but looking years ahead; who cares. Difficult for me to accept that any significantly large communist Chinese company SoftBank qualifies is allowed to simply respond to market impulses.

Right up to its collapse, the USSR bragged inflation had not increased the price of bread, first set in Of course, there was never enough bread available at the socialist market price to feed a hungry population. Softbank is Japanese. Please check in your ideology at the door. Today it is the nation most able to defend itself against anyone, after the US.

They defeated the Nazis and raised millions out of poverty. Yes, the Soviet Union had all sorts of faults and problems — a not insignificant number of which were due to economic isolation at the behest of the US and UK and which has been restarted as a tactic recently. Equally, China was also a 3rd rate, 3rd world power in They are now the 2nd largest economy in the world, have raised hundreds of millions out of poverty, and are now a real economic power, though not a military one.

The US led sanctions against Russia are probably a really bad mistake. This has forced Russia that was dependent on imports to develop its home market industry, especially their food industry. Ok, the cities in Russia are privilegied areas compared to rural settlements, but the Picture I did get that domestic Russian production has benefited greatly from the sanctions. In addition, the US should have tried to keep Russia and China apart, instead the US is doing their best read worst to drive Russia and China into each others arms ….. Javert Chip I think the production message about Communism is a lot more complex than the one you put forward.

Does this mean Capitalism has failed? Starvation, however, was not something that happened there. And as you yourself noted — the Soviet Union was under economic embargo pretty much the whole of its existence. No country in the world, the US included, can most efficiently make everything itself. Being cut off from all external trade relations is exactly how you get North Korea. Citgo actually being taken over. If the Waltons decided to squeeze the US government by causing all the Walmarts to suddenly have nothing to sell, the effect would be similar.

In any case, self-sustaining is a more than a little irrelevant. A couple of years ago, I thought the market would tank after Uber and Lyft went public. The reasoning being a bit complex: technology is the cornerstone of faith in progress and growth and faith in progress and growth is what drives market valuations. As an IT guy, I know the real technology innovations have been well-plucked maybe a decade ago and companies like Uber, Lyft, We, Snap, et.

So once the investing community comes to realize that technology innovations are something from the past, faith in progress and growth will collapse as will market valuations. And can stand to lose a lot of money. I have been a Business Systems Analyst for several decades and I have become much less enamored of IT than the average person and most investors.

While IT in general has been a very good thing for America, IT does not prevent stupidity and poor judgement. I am currently consulting for a health care company that is having a very hard time producing a health ID card without lots of bad data names, plan codes, addresses, etc. The people are friendly. But exile did not mean that any more, he said. He could communicate with students in New York via video and three hours later do a similar event in Germany. So, Snowden discovered that adherence to a place U. Modern technology makes anyplace happily possible.

There is no where for him to run. From the revolution to the end of WWII, roughly M Russians were explicitly murdered by the state or war academics are unclear on numbers because nobody in Russia cared enough to keep track, not even to the nearest million. Snowden is merely a bright, shiny object, currently of use to the Russian state because he aggravates the US. Cuba has been solidly communist since I mean, they way you talk about Snowden and Russia I think is best reserved for the criminals, mass murders, and mass slaughters right here in the Government of the United States of America.

I do very much hope you compare the tens of millions the Russian government killed to the tens of millions our 2 previous Presidents — Bush and Obama — killed…all very much recent history as in the last 25 years. SDC is losing money, has regulatory issues a la Uber with a twist — unlicensed provider of dental services and has a number of non-public competitors already in existence.

The business model is technology based — Invisalign has been in the market a long time — so probably fairly easily repeatable. Is SDC different that We, or is it a variation of the same theme — get original investors wealthy while setting up public investors to take a financial bath? If they are We, they why did they not see steeper losses with the IPO, or is that likely to happen with time? Did the material costs for their products really fall almost in half in 2 years? Given the massive growth, this would also bear looking into. The marketing expenses look reasonable at first glance.

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In addition, he and his wife own 6 additional buildings that We Work will actually purchase from Mr. Neumann to lease out hence the future revenue numbers. Obviously a deal like this would go through a serious diligence process and this conflict of interest would be apparent at first glance. Our trusted investment advisers. Should be criminal. Crazy and a fool and their money are soon parted. Oh and the wife! She envisions and promotes herself as some new age enlightened soul who studied Buddhism at Cornell and studied under many masters including the Dalai Lama.

The insider fight must be something to see. Maybe WE Whatever will list in China instead to take advantage of a bigger group of idiots. With a major rotation in the market last week from momentum equities, towards value plays, portfolio managers will be less likely to take dumb bets on overvalued stupid hyped IPO garbage. If this thing survives, some may pick it up much later at a very steep discount and then maybe use a cost average strategy to mop up losses. With oil fields being blown up in Saudi Arabia, I guess the Fed better start spending a lot more time worrying about Global Economies.

But not fly-over-country. Oil embargo will break the DOW back. Fed might not cut rates. The US is the largest oil producer in the world and has been the largest natural gas producer in the world for years. This is a huge industry in the US, with lots of manufacturing, professional services, and finance and insurance services attached to it. The jobs in all these sectors are well paid. And these workers are consumers and spend a lot of money.

If the prices of oil and gas jump due to some kind of event, such as you mention, this industry will go into absolute overdrive in the US, and within weeks! This will instantly pull industrial production out of its doldrums, and it will crank up services. US net imports imports minus exports of petroleum and petroleum products have shriveled to near nothing this year.

A US production boom, as would be caused by a spike in prices, would turn the US into a solid net-exporter. In terms of GDP and employment, this would be one of the better things that could happen to the US economy. Complicating matters further for Texas shale drillers is the increasing shift of the oil slate to lighter forms of crude.

Oil coming out of the ground in West Texas was light to begin with, but as drillers begin to shift increasingly from the Midland to the Delaware basin, oil is becoming lighter and lighter. The refineries along the Gulf Coast are not equipped to handle oil that light. It is typically mixed in with other streams to create WTI, but rising volumes of ultra-light oil are forcing changes. Instead, the industry is beginning to separate out oil of different qualities, forming new grades, as Reuters reports.

These newer, lighter grades are trading for discounts, which means that some companies are selling their product for prices well below the prevailing WTI price. Yeah, people have been worrying about the lighter grades for years. But so far, so good. No one is throwing away or burning the lighter grades of crude. There is a market for them, in one form or another, in the US and overseas. Unlike some of the associated natural gas that, lacking pipeline infrastructure, gets flared. Some of it has to do with lack of pipelines and reliance on more costly oil trains, and some of it has to do with the grade.

So what? That the lighter grades of the Permian trade at a discount is no biggie some of it has to do with takeaway capacity. The fact is lighter grades of crude are being dealt with. I agree, this news should be great for the stock market. I expect the market to surge in the coming week — higher oil prices, uber-dovish Fed, Draghi doing what Draghi does — things are looking good for those who trusted that things will always look good for Wall Street.

The US produces about 20 million bpd of combined petroleum and petroleum products including about 12 million bpd of petroleum. The US consumes about 20 million bpd of petroleum products no one consumes petroleum. Hence net-imports import minus exports of petroleum and petroleum products have shriveled to almost nothing.

In other words, while there is a lively trade with the rest of the world in petroleum and petroleum products for various reasons, on a net basis, the US produces nearly as much as it consumes. By next year, at the current trend, the US will become a net exporter of combined petroleum and petroleum products. King Faisal confiscated it.

The DOW made a new all time high. Chaos days returned to the chart after 6M of tranquility. Forward looking business plans arise and Wall St rushes to fund them. So buy your own cubicle and start a business. The billions in funny money are of no consequence if the small business failure rate actually drops.

The founder is selling out, and SoftBank,…. Your email address will not be published. Trump wants negtive interest rates. Besides, maybe now We Co can sue Cramer for damages to raise the money. Ambrose Bierce. The peak of a bubble is easy to see in hindsight. This may be the peak seen in real time. There are so many Zombie corporations nowadays. The implosion should be epic.

John Taylor. Good post. Same here Been reading Zerohedge for 10 years and read about WS from their comment section. Other market-pumpers have other tales of woe. For example, NBC! ZH has been covering it all week. Wolf Richter. Lance Manly, socaljym is a spoof account, making fun of real estate commenter SocalJim.

Lance lookup the old SoCalJim from prior days here. WeWork to become MoviePass once all the speculators head for the exits! We have a nice small house that we love. We have a wonderful family. At almost 88 years old, I might be the most blessed man in the United States of America. The old company was Wellington Management , where Bogle had spent more than two decades. When he started Vanguard, it was just another traditional, actively-managed money firm.

And that part of the business still exists. But Bogle had long questioned the wisdom of picking stocks. A harbinger, maybe, but Bogle spent his first couple decades in the business dancing the same dance as everyone else. Others had been thinking through the idea, but Bogle, and Vanguard, were the first real players to take the plunge. Talk about what it was like to experience that reception. You may have sensed that. In a certain way, the more dissent I got the more confident I was that I was right.

People laughed. But basically, the poster was put out by a brokerage firm. The thing about the index fund — no sales loads, no portfolio turnover. This is the original underwriting of the index fund. It took a long time for people to get the idea. But, increasingly, people are getting the idea. BOGLE: If we go back to , we find that there were approximately funds in business and basically or [3]40 have gone out of business.

If You're Clueless About the Stock Market and Want to Know More

It turns out, in that period, there were two mutual funds who beat the market by more than 2 percent per year. Those are your odds. Those may be the odds, but the perception is different. Warren Buffett, a stock picker who does beat the market, is a national hero. Rather than being taught the sensible route of dollar-cost-averaging their way into low-fee index funds. BOGLE: You have to understand one important thing about the market and that is for every buyer, there is a seller. And every seller, there is a buyer.

The croupier in the gambling casino. RITHOLTZ: I draw the parallel between being an outstanding market-beating manager, trader, whatever, with being an all-star in any professional sports league. RITHOLTZ: But every kid who ever picked up a baseball bat, a basketball, a football, dreams of winning the championship, hitting the bottom-of-the-ninth home run. Simple, perhaps, but elusive. In part because the alternative — the gamble of picking stocks — is so seductive.

Which may explain why it took so long for index funds to really catch on. The index fund is more predictable, and boring — which, as Jack Bogle sees things, is its virtue. It diversifies away the risk of picking a hot manager and diversifies away the idea that you can pick market sectors like health care, technology, or wherever it might be. We estimate the average expense ratio is almost 1 percent for an actively managed fund.

Then these active funds, all of them have sales loads. The index funds do not. You add that all up and the cost of owning a mutual fund on average is 2 percent. That difference — 2 percent versus four one-hundredths of 1 percent — may not sound like a lot. BOGLE: If the market return is 7 percent and the active manager gives you 5 after that 2 percent cost, and the index fund gives you 6.

Think what an investor thinks about when he looks at that number. I put up percent of the capital. I took percent of the risk and I got 33 percent of the return. Therefore, if you pay nothing, you get everything. Jack Bogle is plainly a cheerleader for the revolution he helped start. But the fact is that the revolution does seem to be happening. The evidence is in the data; and the evidence is in the air. Five months ago, a journalist tweeted out a Washingtonian article suggesting that White House press secretary Sean Spicer was going to be replaced.

Spicer tweeted back:. Stick with a broad mix of low-cost index funds. That said, just last week, Sean Spicer did resign. The question is …. And when the market crashes …. On October 14 of , the University of Chicago finance professor Eugene Fama began his day just like any other. Stay out there. FAMA: Not as an academic discipline. FAMA: Yeah, they were professional people.

For example, if you took an investments course at that time, it was a course on picking stocks, basically. How do you analyze companies to pick stocks? Of course, they had no model of what determines prices, so there was really no way to answer that question in any rigorous way. Explain it to a layperson. Some behavioral economists argue that the standard human cognitive errors create imperfect pricing that a shrewd investor can exploit. You can and some people have and have for long periods of time.

Look no further than Warren Buffett.

FAMA: The academic world grasped this stuff basically immediately. There was no resistance to it to it at all. It took a much longer time for it to penetrate into the applied community. DUBNER: In retrospect, was the objection simply protectionist thinking by the financial services industry or was it something more than that? Is revolution too strong a word or no? Or maybe put it another way, when is it worth it for me to pay my 1 or even 2 points for an active manager? They have to make bets. This is looking at the world before costs. When you look at the world after costs — which is what people eat; they have to pay the cost of the people charging them — well, then, the whole industry looks pretty bad.

No offense. But the Ivy Leagues certainly …. FAMA: Badly. But in the old days they used to invite me annually to go talk to the person who ran the endowment. It was clear he was totally not interested. Finally, I gave up and they gave up. I asked Ritholtz about it. In fact, when you look at the top-performing Ivy endowments, they were all around 8 percent for those 10 years.

Again, sophisticated, expensive management with access to all kinds of information and investments. And lo and behold, my ten-year annualized net return beat every single Ivy endowment. Those are the best and the brightest. First of all, would you agree with that statement? I would say the vast majority. Do you see it that way? Look at all the endowments. Look at look at how far behind the eight ball most of the state pension funds are. These are really smart, accomplished people. Schwab recently cut 1 to 2 or 3 basis points.

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The Dartmouth finance professor Ken French has been closely watching the growing appetite for index funds. It does seem to have picked up speed. And the volume of trading in E. They buy it today and they hold it for years and years. Before the crisis, people had this view that Wall Street was our friend. After the crisis, there are a lot more cynical about fees that are being charged and services that are being provided by Wall Street.

This is a tough gig. Why am I wasting my time picking stocks, paying commissions, paying high mutual fund costs? I could just index. There are, of course, plenty of alternative views — especially from those who profit from old-school active investing.

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Still, you can imagine that if every investor in the world held pretty much the same investments — well, what would that lead to? A research note from the investing firm Sanford C.