This Japanese Toaster Costs $270. It Only Makes One Slice at a Time

On a lighter subject… To think I’ve been toasting bread incorrectly my entire life. Let me know if you buy one – so I can come over and try a slice.

This Japanese Toaster Costs $270. It Only Makes One Slice at a Time
https://www.bloomberg.com/news/articles/2019-05-16/this-japanese-toaster-costs-270-it-only-makes-one-slice-at-a-time

Trump Mulls 6-Month Window for EU, Japan to Curb Auto Sales – Bloomberg

One paragraph in this Bloomberg article boggles the mind:

`A report by the Commerce Department had found that America’s innovation capacity “is now at serious risk as imports continue to displace American-owned production.” Trump was facing a May 18 deadline to make a decision on auto tariffs. “The lag in R&D expenditures by American-owned firms is weakening innovation and, accordingly, threatening to impair our national security,’’ according to the draft executive order.’

So, US companies under-invest in R&D, put out lower quality and/or undesirable cars, Americans buy quality and desirable cars from companies that do invest in R&D (BMW, Toyota), and now we need to apply tariffs to the cars Americans purchase because of “national security”??? Meanwhile, we de-invest in education at home and restrict immigration of hard working and skilled labor. Oh, and American consumers bear the costs of tariff’s (see this article: HTML).

Pardon the pun here, but I hope that vision will clear and delusion will subside in “2020.”

-Dr. Moore

https://www.bloomberg.com/news/articles/2019-05-15/trump-weighs-6-month-deadline-for-eu-japan-to-curb-auto-exports

Trump Mulls 6-Month Window for EU, Japan to Curb Auto Sales

Jenny LeonardMay 15, 2019, 6:24 PM PDT
Photographer: Qilai Shen/Bloomberg

David J. Moore, Ph.D.
Associate Professor of Finance
California State University, Sacramento
david.j.moore

These Are the Highest Paying Jobs for the Class of 2019

More evidence why I actively incorporate R programming in the curriculum now and python in the future. It was good to see some students take advantage of the option to use R during the final exam today. May they retain and develop some of the knowledge and familiarity with dat analysis.

-Dr. Moore

These Are the Highest Paying Jobs for the Class of 2019
https://www.bloomberg.com/news/articles/2019-05-15/big-data-skills-earn-high-pay-for-today-s-college-graduates

Yes, Trump Tariffs Are Costing Billions. No, China Isn’t Paying

More on trade wars and tariffs. Is there a better way to address the disagreements between the two countries? Or should we try to figure out how to profit from what could be a prolonged trade war?

I bet US hedge funds are already on top of that approach…

Yes, Trump Tariffs Are Costing Billions. No, China Isn’t Paying https://www.bloomberg.com/news/articles/2019-05-07/trump-china-tariffs-who-pays

Explainer: Who pays Trump’s tariffs – China and other exporters or U.S. customers? – Reuters

This article does a pretty good job of explaining who pays tariffs. What is not discussed is what the US government does with tariff revenue. While investing in education or healthcare would be a nice idea, the US budget deficit is so large ($310 billion, https://www.bloomberg.com/news/articles/2019-03-05/u-s-budget-deficit-widens-77-percent-as-revenue-declines) that an extra 10 or 20 billion in tariffs won’t solve the deficit problem.

Anybody buy a washing machine lately?

https://www.reuters.com/article/us-usa-trade-tariffs-explainer/explainer-who-pays-trumps-tariffs-china-and-other-exporters-or-u-s-customers-idUSKCN1SB0UF

Buffett Slams Private Equity Over Inflated Returns, Debt

Include cash while tabulating fee amount but exclude cash when calculating returns? Yes, that is logically bad practice. But, it artificially bumps up perceived returns to make the fund manager look good. Buffett has called out private equity managers for following such practice.

When I report our Student Investment Fund at Sacramento State performance, I do not exclude cash (I.e., we remain Buffett compliant). In fact, the Bloomberg PORT tool gives a great view on how being over or underweight cash relative to the S&P 500 has helped or hurt returns (spoiler: we have perpetually held too much cash and this has detracted from returns during this long bull market).

To me, it makes no sense to exclude cash when calculating fund returns. If an investor provides cash to a fund manager to invest, the investor is not paying the manager to sit on cash. Thus, performance should be inclusive of every dollar provided by the investor.

Be mindful my friends…

-Dr. Moore

Buffett Slams Private Equity Over Inflated Returns, Debt
https://www.bloomberg.com/news/articles/2019-05-04/buffett-slams-private-equity-for-inflated-returns-debt-reliance

UPS’s $20 Billion Tech Bet Was Scorned by Wall Street. Now It’s Paying Off

Robots and stocks. That was the conclusion a local wealth manager and I had as we drove to San Francisco to listen to Ben Bernanke speak some years ago. Recently, as in a few weeks ago, my son spoke of applying to UPS and FedEx for work as a baggage handler. At that time I thought “I sure hope he does well in his computer science major because the baggage handler jobs he applied to will eventually be replaced by robots.” Will, it appears that pace is quickening.

Another person in town suggested that if my son applies to work at UPS and FedEx, he should apply to the driver position citing better benefits and union representation. Again I thought “I sure hope he does well in his computer science major because the driver job will eventually be replaced by robots.” Guess what? This morning I also read an article about Google gaining Federal Aviation Administration (FAA) clearance for drone deliveries: https://www.bloomberg.com/news/articles/2019-04-23/alphabet-s-drone-delivery-business-cleared-for-takeoff-by-faa
This is in addition to the prospect of driverless cars.

Robots and automation are coming. One might as well know how to design, use, and repair them as well as own stock in companies that do. But then again, one needs a job to earn enough money to purchase stock after paying for food, clothing, and shelter. Which job is the question – which job isn’t soon-to-be eliminated by robots? See this McKinsey article for some perspectives on that question: http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/where-machines-could-replace-humans-and-where-they-cant-yet

Hope you find these reads informative.

-Dr. Moore

UPS’s $20 Billion Tech Bet Was Scorned by Wall Street. Now It’s Paying Off
https://www.bloomberg.com/news/articles/2019-04-23/ups-sees-payoff-from-20-billion-tech-bet-scorned-by-wall-street