As of June 9th, 2017, the Department of Labor's fiduciary rule, also known as the conflict-of-interest rule, has partially taken effect. The new rule has the greatest effect on financial advisors who are registered brokers. How does the fiduciary rule impact you? What do you need to know?
On May 24th, I attended the first Gold Event in the CKGSB Knowledge Series at the new offices of White & Case. Dr. Xiang Bing, Founding Dean of CKGSB and Professor of China Business and Globalization, discussed China's Newly Dynamic Economy and the Rising Role of the Chinese Entrepreneur. FYI, CKGSB (Cheung Kong Graduate School of Business) is the Beijing-headquartered business school that Dr. Xiang established 12-years ago with the support of the Li Ka Shing Foundation. It was China’s first privately-owned business school, and these days perhaps the most well-known private Chinese institution outside the country.
I remember hearing about bitcoin for the first time about four years ago when there was news that someone used the digital currency to buy a Tesla Model S for $103,000 which was the equivalent of 91.4 bitcoins. That buyer may have a bit of remorse because if he held on to his digital currency, it would be worth roughly $260k today. This year the cryptocurrency is up 193% and it is up almost 4x in the last year. It has become one of the hottest investments of 2017. Now the question is: should you be a buyer or is it a bubble?
Recently one of our clients sent me over an article from Yahoo Finance titled Mark Yusko: 'The US is going to have a crash and it will be massive.' Clearly that is a great title for an article because it is scary as hell. Just keep in mind in today's world, you have to say something like that to get quoted. Writers know that is great click bait. They salivate over quotes like that one from Yusko. But more importantly to me and you, is this really going to happen? Is the market going to crash? Perhaps eventually, but not likely in the near term. Is it going to be massive? Almost impossible to answer. Our view is that the market is still heading higher. S&P earnings are growing in the low teens and the global economy is on the upswing. Interest rates remain extremely low and are still near zero in Japan and Europe. These conditions don't suggest an imminent crash but we are always monitoring variables that could change our outlook.
With our world getting smaller daily, it is imperative to keep one's eyes and ears open to what's happening in global economies, especially the world's second largest economy. On May 24th, I attended the 2017 Peking University Guanghua New York Forum at the New York Public Library. The forum featured renowned speakers re-imagining China’s business landscape for an audience of 200 Chinese and international industry leaders, academics, and innovators to discuss, debate, and exchange ideas. Here are the highlights.
Every year, analyst Mary Meeker delivers her internet trends report and it is a must watch for all those interested in technology. Her report is 335 slides with tons of information.
To achieve greatness, you have to fail over and over. Red Sox Hall of Famer Ted Williams was the last baseball player to hit over .400 in a season, but that means he failed to get a hit in 60% of his at bats. Basketball legend Michael Jordan didn't make the cut on his high school team, and he stated eloquently, "I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."
China has stepped to the forefront of solar energy with its slogan "Promote green development! Develop clean energy!" The country's National Energy Administration revealed that its solar power production more than doubled in 2016, hitting 77.42 gigawatts by the end of the year. China is now the world's biggest generator of solar-based electricity in terms of capacity. Of course it has a long ways to go relative to its population. Japan, Germany and the US each has roughly 40GW of installed capacity.
When I was a junior in college, I studied in England for 6 months so I became familiar with the subway reminder of "please mind the gap." It seems so courteous and there doesn't really seem to be much danger in the tiny gap between the subway car and the platform but it is nice to be reminded to keep safe. Unfortunately, there is a huge gap emerging in retirement savings and the it is more of a chasm than a gap. According to the World Economic Forum, longer life spans and disappointing investment returns will help create a $400 trillion retirement savings shortfall by 2050, a figure more than five times the size of the global economy today. Needless to say, this is a monumental problem that needs to be addressed.
While in Manhattan for meetings recently, I walked past this shelf of Amazon packages being prepared for delivery. While, I admittedly have my fair share of Amazon boxes at home and the office, seeing it at this scale was eye opening. From watching Amazon Fire TV to my kids streaming Amazon Prime cartoons to asking Alexa to check today's weather forecast, Amazon.com, now in its 20th year as a public company, is everywhere.