Where the Vultures Gather

By | 2017-07-17T12:21:17+00:00 June 19th, 2017|Global Market Update|

Where the Vultures Gather What is vulture investing? Turkey Vulture landing. Photo: Don DeBold. Source: Wikipedia Vulture investing is a way to profit from poor management. A vulture fund typically invests the debt of troubled firms, then seeks to convert that debt into equity. They can also invest in distressed sovereign debt, then use the courts to bring actions against the issuer to force some kind of recovery. The phrase “vulture capital” was originally coined as a derogatory term, meant to criticize investors who [...]

Pennies from Dividends

By | 2017-07-17T12:21:39+00:00 October 25th, 2016|Global Market Update|

What good are dividends? Public Domain. Source: PD Photo It’s a good question. Dividends can limit a company’s options, forcing them to cough up cash that could be used to run the business. If they money flows out of the company, they might have to increase their borrowings. Ford paid a big special dividend in 2000—they called it their “Value Enhancement Plan.” Management probably wished they still had that cash a few years later during the financial crisis. You’d expect that paying dividends would [...]

Central Banker to the World

By | 2017-07-17T12:22:26+00:00 September 18th, 2015|Global Market Update|

What is the Fed’s role? F15s and F16s over Kuwait, 1991. Photo: USAF. Source Wikipedia Yesterday the Fed decided to keep interest rates near zero. It was a tough call. Employment has improved by more than the Fed expected, but inflation has moved away from the Fed’s target. Economists were evenly divided as to whether they would or even should raise rates this meeting. In their statement, they comment that “recent global economic and financial issues may restrain economic activity.” Janet Yellen reinforced this [...]

Being There

By | 2017-07-17T12:22:43+00:00 July 7th, 2015|Global Market Update|

Being There Why do business owners work so hard? Photo Credit: Vladimir Kudinov. Source: Unsplash One reason is to prevent fraud. Restaurants or gas stations or convenience stores do a lot of cash business. It can be pretty easy for an employee to skim a little “off-the-top” when ringing up receipts. Modern cash registers make this more difficult—even more significant has been the shift to debit and credit cards for even minor transactions. More common is when employees give merchandise away: waiters and waitresses [...]

A Dividend Polaris

By | 2017-07-17T12:22:47+00:00 May 20th, 2015|Global Market Update|

Why do dividends matter? Photo: Ashley Dace. Source: Wikipedia Dividends have become quite popular in recent years. With interest rates so low, many income-oriented investors have used dividend-paying stocks as substitutes for bonds in their portfolios. And dividends have a lot to recommend them. They usually pay cash quarterly, they can grow with inflation, and taxable investors may owe less to the government if the dividends are qualified. […]

The Road To Where?

By | 2014-01-28T09:40:10+00:00 January 28th, 2014|Global Market Update|

Why do good intentions so often fail? It happens all-too-often. A new approach to poverty is announced, there’s excitement, there’s publicity, tens—no, hundreds of millions of dollars are raised, and it’s declared that the end of poverty is in sight. Such hope! Such vision! But when plans hit the ground, things are more complicated, systems collide with systems, and often people end up worse than they were before any of this help ever arrived. Some development experts went to Africa looking for “quick wins”: [...]

Alma Matters

By | 2017-07-17T12:34:54+00:00 April 19th, 2012|Global Market Update, New Markets|

Why are US colleges and universities so successful?In a recent study of global universities, institutions from the United States occupied 17 of the top 20 spots, based on academic reputation, graduate accomplishments, and academic journal citations. While the US has a large and relatively wealthy population capable of supporting its universities, this kind of dominance is striking. What can explain it?One possible reason is alumni involvement, control, and generosity. […]