Technology company earnings season is in high gear. It is a heck of a time to be a Technology fund PM or Analyst. Despite the NASDAQ Composite being down 13% YTD, the group has another 40% downside or more in our view. Many of the high-multiple of revenue (no earnings) stocks have 80-90% downside as … Continue reading Tech Earnings Season Is Here
Tag: Share Buybacks
Share buybacks are back above pre-COVID levels. Frequent readers of these pages know that we are generally not in favor of share buybacks. Buyback activity has exploded since 2009 when the Fed began its low interest rate and QE monetary policy to artificially prop up equity and credit markets during the financial crisis. Public companies … Continue reading Share Buybacks Accelerate
The most liquid measure of the money supply - M1 - is up 4.8x since February 2020. Given the exorbitant inflation of the money supply, we are only in the early stages of price inflation. Cash-rich Technology companies can take several steps to combat inflation. Now is not the time for cash-rich Technology companies to … Continue reading How Technology Companies Can Fight Inflation
One news item that caught our eye this week was that the Office of the Comptroller of the Currency (a division of Treasury) wants banks to extend credit to those who lack credit history. Banks plan to share some consumer data with each other in order to build enough history to justify extending credit. Smells … Continue reading Treasury Wants More Consumer Spending
Over the past 11 months and as recently as Tuesday the Federal Reserve has consistently reiterated its mission to get the U.S. Economy back to full employment. We are not there yet. The labor participation rate remains below 2008-2009 financial crisis levels. Let me know your thoughts on the below (particularly if you are on … Continue reading Is The Fed’s View On The Relationship Between Interest Rates and Jobs Wrong?
The Fed's behavior in recent months has been something out of a horror movie. The low interest rate, expansionary monetary policies introduced by former Fed Chair Bernanke and continued by former Fed Chair Yellen have dramatically accelerated under current Fed Chair Powell. Bernanke dealt in $Billions, Chairman Powell prefers $Trillions. Click any of the charts … Continue reading The Forever Bubble-Blowing Fed
Short-term greed has gripped some of the world's largest Technology companies. A number of CEOs and Boards are guilty of trading long-term innovation and customer value for short-term share price support. Innovative companies (we provide examples), have bucked the buyback trend. Record high corporate debt levels have funded record share buyback activity in recent years. … Continue reading Binging On Buybacks At Innovation’s Expense