Ghostwriter – Author – Journalist

Fred’s Newsletter July 27/20

By on July 27, 2020 in Articles with 0 Comments

July 27, 2020.   Volume 1 # 14

This newsletter comes out every Sunday night/Monday morning. There is a subscription charge of $50 a year after you receive a few issues.  The content is usually, but not always, money-related. Some weeks there will be an interview and/or a video. To subscribe, email me at fred.langan@gmail.com.

Day Traders Pile In.

Is it Amateur Hour in the stock market?  More day traders are piling into the stock market. Maybe they are bored sitting in front of their screens and take a punt on the market between Zoom calls. E-Trade, which allows people to make their own buy and sell calls, reports trades are up 267% from last year.

We generated greater retail organic asset growth in the first half of this year alone than in the previous two years combined, and generated more retail organic account growth than the previous five years combined,” says the boss of E-Trade, Mike Pizzi.

What on earth `Organic’ means in that sentence is anyone’s guess. But you get the story:  small investors are piling in. That is never a good sign.

It’s been shown over time that the `little guy’ is almost always wrong. Market pros see huge retail buying as a ‘contrarian’ signal

 

Stock Tips from the Shoe Shine Stand.

Joseph Kennedy was getting a shoe shine early in 1929 when the man polishing his shoes gave him a few tips on the stock market. Kennedy, father of President John Kennedy, was already a rich man and a keen market player. On getting the shoe shine tip, Kennedy sold all his stocks and shorted the market, that is placed bets that it would go lower. Come the great stock market crash of  October 1929, Kennedy became even richer.

Lunch with FT: A Communist on Wall Street.

The weekly lunch interview with some famous artist or tycoon is one of the best reasons for subscribing to the Financial Times. This week’s interview is with a man called Jim Chanos. It seems he is the king of short-selling, that is betting a company is going to fail.  His hedge fund just made $100-million betting that a German company named Wirecard would go bust. The good news for him was the CEO of Wirecard was arrested for fraud and the stock cratered. Other big scores over the years: shorting Enron and Luckin Coffee, a Chinese chain. Chanos says fluffy stock markets are a short seller’s paradise: “We Live in a golden age of fraud”. He thinks Tesla and many tech stocks are overpriced.  He plans to vote for Joe Biden and thinks some taxes should rise.

“I think it’s fair that rates of taxation on capital probably should go up, relative to rates of taxation on earned income. I know that makes me a communist on Wall Street but I’ve always felt that.”

Walls of Lettuce in the Sky

What can you do with an empty office building? Use it to grow lettuce, or anything else for that matter. The Wall Street Journal says demand fo

 

r office space could drop by around 20% because of the work at home phenomenon. Think of it as multi-story hydroponic marijuana grow-op, but with greens instead of grass. It’s not that new.

What you see is a technician, wearing glasses to protect her from the artificial light, checking a wall of lettuce and kale at the Plenty Farm in San Francisco. There are other indoor farms across the United States and Europe along with a huge facility in the desert kingdom of Abu Dhabi. Plenty’s slogan is: Never Miss a Beet. Well, they’re high rise hippies, cut them some slack

 

A Year in Barbados…

.or Bermuda or Chile. The two islands and the long, thin country are desperadoes, short on tourists and long on unemployment. Barbados is offering a one year stay in the tropical island. To qualify you pay $2,000 (US) each or $3,000 for a family, bring your own health insurance policy and earn at least $50,000 a year. “We don’t want the scum of the earth, but decent upstanding types,” says the Tourism Minister. Land of blunt and politically incorrect speech it would appear.

For your $2,000 you get first world internet, a warm place to work remotely and access to an educated, highly literate workforce. As for tax, you pay that in your home country,

Barbados earns half its income from tourism, so it is on the ropes, with unemployment estimated at 40%.  It is much richer than most of its neighbours.

“Barbados is the wealthiest and one of the most developed countries in the Eastern Caribbean and enjoys one of the highest per capita incomes in the region,” says the CIA World Factbook. Think what you will of the CIA, it is a great source of statistics and info.

Parting Out in Mojave.

Qantas jumbo jets and other Boeing 747s are stored at an airfield in Mojave, 100 miles north of LAX, the Los Angeles Airport. I hung around the airport for the better part of a week about 25 years ago shooting a documentary for the CBC. An amazing place, filled back then with jet fuel guzzlers like the Lockheed 1011. Some planes go back into service; many go there to die. They are `parted out’, in other words stripped for usable pieces. Deserts are great for storage; no moisture, no rust.

Random Statistics.

There are 111,000 gas stations in the United States and 11,937 in Canada. There are 20,000 electric charging stations in the United States and 5,000 in Canada.

Gold Bugs Are Hysterical.

Gold nears an all-time high, screams the headline. Whoever wrote that must have flunked Grade 3 arithmetic. Gold hit a real high of $875 an ounce in January of 1980. That is $2,735 adjusted for inflation.  So $1,900 an ounce ain’t a new high, no matter what some excited news type tells you.

Essay of the Week

  It was January 18, 1981 and I was working as the business reporter for the CBC TV network. A lot of people in the office were loading up on silver, including the main newsreader. Silver kept going up every day, pushed by the Hunt brothers of Texas who were trying to corner the market in silver.

The phone in my office rang and it was Garret Herman, a guy I had gone to high school with, who was an institutional trader with Merrill Lynch. “You should see what I’m looking at. There’s a lineup at Guardian Trust, people waiting to buy silver.” I grabbed a camera crew and headed down there. I remember doing an interview with a woman who was convinced that silver was the greatest investment. “Did you sell anything to buy silver?” I asked her. She laughed a little and said “My Canada Savings bonds.”

Canada Savings Bonds are not really bonds, but savings certificates. People bought them on payroll plans at work. The government stopped issuing them in 2003.

So just how risky was it to trade Canada Savings Bonds for silver?

The 1980 series of Canada Savings Bonds, issued in the fall, paid 11.5%; the 1979 series paid 12%; later that year it paid a record 19.5%. At that rate your money doubles in just under 4 years.

If you bought an ounce of silver on January 18, 1981 for $53 you could sell it for $7.92 in January of 1982.

If the woman and my friends at work, are still holding their silver ingots to this day, they might choose to sell at $23. Let’s reverse engineer that number using the Bank of Canada’s Inflation Calculator. The $23 today is equal to $8.30 in 1981 dollars.

She should have held on to those boring Savings Bonds.

Fred Langan is a business journalist who for many years was the host of CBC’s nightly business newscast. Among other things, he was the business reporter for The National and The Journal. He wrote and hosted hour-long documentaries for CBC Current Affairs, and produced and hosted documentaries for Christian Science Monitor Television. He was the Canadian business and finance correspondent for The Economist for eight years, writing 250 articles for the publication. He wrote for the New York Times, the International Herald Tribune and was the Canadian writer for the Christian Science Monitor for 20 years and The Daily Telegraph (London) for 12 years.

Langan writes long-form obituaries for the Globe and Mail. He was editor and publisher (volunteer) of Tempo Lac-Brome for several years and still contributes to the bilingual local monthly. Langan has published two novels and 12 biographies.

 

 

 

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About the Author

About the Author: Fred has had a full career as a CBC TV host and reporter. He has written countless articles for many renowned publications such as The Economist, The Globe and Mail, BusinessWeek and many more, as well as more than 2000 obituaries. He is also a successfully published author and ghostwriter. His current projects include writing and co-authoring books, as well as lending his talents as a speaker and interviewer for webcasts. .

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