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Money

Can’t anybody run a streaming service? Netflix joins the Disney glitch parade

Netflix (NFLX) customers couldn't log in to their accounts for about two hours on Thursday morning. Downdetector.com recorded more than 1,000 companies in the first hour. This follows on a much more serious service disruption suffered during the launch of Disney's (DIS) streaming service Disney+. Complaints hit more than 7,000 within an hour of the launch. Most of those problems have been fixed although Downdetector.com reports about 300 complaints on outages on Thursday morning.

Could collapse of U.S.-China trade talks trigger a second Federal Reserve Put?

You're aware, I hope, of the idea that there's an implicit Federal Reserve put that undergirds a stock market trading near record highs. The idea is that Fed chair Jerome Powell, would move to cut interest rates to support stocks if the market looked like it was about to tumble. (Called "The Powell Put" after the current Fed chair, it succeeds the Yellen and the Bernanke Puts in investor thinking.) A belief in the Powell Put by many investors and traders, I'd argue, keeps more money in risky assets during times of market turmoil. But now there way be a second Fed Put that would support share prices if the current talks on a Part 1 U.S.-China trade agreement fall apart.

At least someone wants to buy TD Ameritrade–can we say the same for Citibank?

Interesting column by Matt Levine on Bloomberg Opinion today. In the piece "Schwab Broke Ameritrade to Buy It" he points out that the acquisition bid from Charles Schawb (SCHW) today to buy TD Ameritrade (AMTD) for a reported $26 billion comes after Schwab's announcement that it would cut its commissions for online stock and ETF trades to $0 knocked 25% off the price of TD Ameritrade shares back on September 30. The stock had closed the day before the announcement at $46.70 a share for a market cap of $25.3 billion. Schwab's current offer has is for just $26 billion, essentially the pre-$0 commission announcement valuation. So Schwab gets the company, if the deal goes through, for zero premium on the September 30 price

The Best Mutual Funds You Should Buy Right Now!

<br /> Steve Forbes is the Editor-in-Chief of Forbes magazine. It’s one<br /> of the world’s most respected financial publications. Its columnists have<br /> been churning out stories since 1917. For more than 100 years, they’ve been<br /> trying to forecast the direction of stocks and bonds. They’ve speculated on<br /> the best stocks to buy. They’ve warned investors when to expect a crash.<br /> And they regularly publish lists of “the best mutual funds to buy.”<br /><br /> But Steve Forbes says, “You make more money selling advice than following<br /> it. It’s one of the things we count on in the magazine business–along with<br /> the short memory of our readers.”<br /><br /> By day, financial journalists often write, “The best funds to buy right<br /> now!” But by night, many of them invest in low-cost index funds. It’s easy<br /> to identify mutual funds that have performed well in the past. But funds<br /> that perform well in the past rarely maintain their winning ways. For<br /> example,<br /> <br /> in March 2017, SPIVA<br /> <br /> revealed the 546 mutual funds that represented the top quartile of<br /> performers over each of the previous three years. Two years later, they<br /> found that just 11.36 percent of them maintained their top quartile<br /> ranking.<br /><br /> My first finance magazine editor told me, “To some degree, we’re in the<br /> entertainment business. If every issue told people to build diversified<br /> portfolios of low-cost index funds, we couldn’t keep the magazine afloat<br /> for very long.”<br /><br /> Scott Burns has been an investment columnist for more than 40 years. He<br /> gave me a foolproof system for finding story ideas: Identify high-profile<br /> magazine stories that tout, “The best mutual funds to buy right now!” He<br /> said I could then track their performances. After they’re recommended,<br /> they’ll usually start losing to their benchmark indexes. So…why do people<br /> continue to read such stories? As Steve Forbes says, they have short<br /> memories.<br /><br />Let’s pull the curtain off the wizards at Zachs Investment Research. In 2015,<br /> they published, “<br /> <br /> The Best Performing Mutual Funds of 2015.”<br /> <br /> Such a list might be entertaining. But it doesn’t help investors. In fact,<br /> it hurts people when they buy the recent best-performing funds. If somebody<br /> invested equal sums into each of 2015’s top-ten performing funds, they<br /> would have earned a compound annual return of 8.5 percent from January 1,<br /> 2016 to October 31, 2019. That compares with a compound annual return of<br /> 12.67 percent for Vanguard’s Total U.S. stock market index (VTSMX) and<br /> 10.23 percent for Vanguard’s Global Stock Market Index (VTWSX).<br /><br /> Zachs implies they can pick winning funds. But<br /> <br /> their own website sheds doubt.<br /> <br /> They gave strong buy recommendations for several U.S.<br /> equity mutual funds from 2014 to 2017. According to Zachs, those funds<br /> averaged a compound annual return of 10.2 percent (it doesn’t appear<br /> they’ve updated this performance). By comparison, Vanguard’s U.S. stock<br /> market index (VTSMX) averaged a compound annual return of 11.33 percent.<br /> That’s why investors should ignore Zachs’ strong buy<br /> suggestions.<br /><br /> Consider Zachs’ specific buy and sell suggestions in<br /> <br /> this 2016 article.<br /> <br /> Three years later, it reads like a tragedy, instead of a triumph.<br /><br /> The magazine gave the Turner Medical Sciences Long/Short Fund (TMSFX) a buy<br /> rating. That’s too bad. It no longer exists. The fund was liquidated.<br /><br /> Zachs also recommended DFA’s Japanese Small Company fund (DFJSX). Since the<br /> recommendation, it averaged a compound annual return of 8.32 percent. It’s<br /> tough to predict how country-specific stocks might perform. That’s why<br /> smart investors shouldn’t try. Instead, they should focus on global<br /> diversification. Vanguard’s Global Stock Market Index (VTWSX) includes<br /> thousands of stocks from dozens of countries. It doesn’t speculate on a<br /> specific sector. It averaged a compound annual return of 10.23 percent.<br /> That beat the Japanese fund by almost 2 percent per year.<br /><br /> Zachs also recommended Fidelity’s Select Retailing Portfolio (FSRPX).<br /> That’s a shame. It averaged a compound annual return of 8.32 percent. By<br /> comparison, the U.S. stock market index gave it a beating. It averaged a<br /> compound annual return of 11.33 percent. In other words, the index beat<br /> Fidelity’s fund by more than 3 percent per year.<br /><br /> In that same column, Zachs also said investors should sell one fund:<br /> Eventide Healthcare & Life Sciences fund (ETAHX). Ironically, after<br /> suggesting investors sell it, the fund averaged a compound annual return of<br /> 9.60 percent. That beat all of the funds that Zachs recommended in their<br /> story, with the exception of the T. Rowe Price Global Technology Fund<br /> (PRGTX). It averaged a compound annual return of 15.73 percent.<br /><br /> But before we celebrate Zachs’ one success, consider the wind behind its<br /> sail. The iShares Global Technology ETF (IXN) averaged a compound annual<br /> return of 20.47 percent. That means T. Rowe Price’s Global Technology Fund<br /> underperformed its global technology benchmark by almost 5 percent per<br /> year.<br /><br /> Zach’s also recommended the remaining four funds: Wasatch International<br /> Growth (WAIGX); Oberweis International Opportunities (OBIOX); Matthews<br /> Korea Investor (MAKOX) and Oppenheimer International Small-Mid Company A<br /> (OSMAX). As a group, they averaged just 5.4 percent per year.<br /><br /> I don’t mean to pick on Zachs.<br /> <br /> Other magazines make predictions too.<br /> <br /> I call it<br /> <br /> The Investment Magazine Dance<br /> <br /> . These writers are smart. But they need to attract eyeballs. High<br /> readership attracts advertisers–and that brings in the money. That’s why<br /> investors should ignore stories that claim they can pick winning actively<br /> managed mutual funds. Evidence says they can’t. Steve Forbes is right.<br /> Human memories are short. But if we want to make money, we can’t forget<br /> this.<br />Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas <br />

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