Carnegie Market Blog

 

Robots, GE and Alexa

Posted by Brent Luce on Jun 20, 2018 3:58:55 PM

Alexa for Hospitality 

By now, we are all familiar with Alexa.  We have learned how to use the AI assistant to play music, buy things, change the temperature, turn off the lights and many other things.  This is just the beginning – now that 50 million Alexa devices are in U.S homes, Alexa is moving beyond the home.   Yesterday, Amazon announced the launch of Alexa of Hospitality and a partnership Marriott to roll this technology out across the world.  This essentially brings the concierge and front desk to your room.  Alexa will be able to handle many tasks like bringing more towels, changing temperature/lighting, ordering food, checking out and many other things.  I wonder what Alexa’s next frontier is?  Watch Alexa for Hospitality in Action

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Topics: $AMZN, Robots, Amazon.com, Alexa

Bezos Annual Letter and Flattening Yield Curve

Posted by Brent Luce on Apr 20, 2018 4:13:56 PM

Jeff Bezos Annual Letter

Earlier this week, Jeff Bezos’ annual Amazon.com shareholder letter was released.  This “Buffettesque” letter is must-read for anyone interested not only in Amazon.com or business in general, but it also sheds light on the disruptive and transformative forces affecting investments and the way we live our lives.  It is packed with good ideas and amazing updates related to Amazon.com itself.  I could make many comments on the letter, but I will just provide you with the letter itself:  Read Jeff Bezos' Annual Amazon.com Shareholder Letter.  Once you read the letter, See Why Business Leaders Love Amazon CEO Jeff Bezos' Letter So Much

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Topics: Recession, $AMZN, Amazon.com, Jeff Bezos, yield curve

Market Scorecard and Volatility

Posted by Brent Luce on Apr 5, 2018 4:53:06 PM

Market Volatility

As I have mentioned in previous communications, 2017 was not a “normal” year when it came to volatility.  In fact, it was one of the lowest volatility years on record.  More normal volatility was bound to return – and it has.  To some, this newly found volatility feels unusual, but spikes in volatility like this are very common over time.  The chart below shows the Volatility Index over the last twenty years.  As you can see, episodes like this have occurred at least every two years on average.  MORE:  Dueling Tariff Announcements Blamed for Stock Market Volatility

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Topics: Volatility, $AMZN, Big Tech, trade war, sector performance, tariffs

Annual Stock Market Contest

Posted by Brent Luce on Jan 9, 2018 4:08:47 PM

2018 Stock Market Contest

The time has come again for the ever-popular stock market contest.  This is always a fun experiment and the winner will receive an awesome prize, along with their name in print if they so choose.  CLICK HERE to submit your S&P 500 guess for 2018.  As a reference point, the S&P 500 closed 2017 at 2673.61. 

Looking back at 2017, the S&P 500 experienced a very strong year.  The winning guess was received from Jeff Karp who will be receiving a wonderful prize package in the next few days.  Most interestingly, 98.4% of my respondents underestimated last year’s strength, including myself.  Below is a histogram of the 2017 guesses:


In typical fashion, most of the respondents were bullish with a few bearish people mixed in.  As usual, there was a cluster of guesses in the plus eight to eleven percent range.  People have been trained to believe that this is the average return of the market.  While this may be true, it is NOT the most common result.  In reality, the market tends to string a bunch of good years together above that range followed by a year or two of really bad years which brings the average back down.  It is a bit like lake effect snow on the east side of Cleveland.  We average about 110 inches per year of snow.  Although this is roughly an inch per day on average during the winter, guessing an inch will fall on a given day is almost never correct – we either get no snow at all or slammed by snow.  

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Topics: $AMZN, stock market 2017, market contest

Blockchain, the Four and Brick and Mortar Retailers

Posted by Brent Luce on Nov 27, 2017 3:46:55 PM

BITCOIN

The bitcoin craze continues.  As of today, bitcoin is valued at almost $10,000.   This is up from about $800 at the beginning of the year and $20 in 2013.  There are many of people who believe this is a great investment, others who think it is a massive speculative bubble, and more who have no idea what the deal is with Bitcoin or blockchain.  Last month a publicly traded biotech company decided to change its name to include the word “blockchain” change their focus to “buying cryptocurrency and blockchain businesses”.  That change alone caused the stock price to quintuple in a short time.  While Bitcoin itself may or may not be in a speculative bubble, the technology it is built on, blockchain, is quite promising.  Blockchain technology has wide implications and may turn out to be an integral piece of the technology revolution we have entered.  Here is an interesting and non-technical TED Talk explaining How The Blockchain Will Radically Transform The Economy  

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Topics: Retail, $GOOGL, $AAPL, $AMZN, The Four, $WMT, Scott Galloway, Bitcoin, Blockchain, $FB

Pumpkin Roll and Big Tech Boom

Posted by Brent Luce on Oct 27, 2017 4:38:12 PM

Big Tech Boom

Microsoft, Amazon.com and Google all reported earnings last night and all beat expectations.  Many, including myself, believe that we are in the early innings of a new technological revolution.  Unlike past revolutions where new companies displace the complacent incumbents, it may be that this time around the incumbents (Amazon, Facebook, Google, Microsoft, Apple, etc.) actually lead the way into the new paradigm.  These companies have scale, massive R&D budgets and are so far leading the way in artificial intelligence, cloud computing and big data.  Here are some factoids related to today’s big moves in these stocks: 

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Topics: $GOOGL, Interest Rates, $AMZN, Big Tech, #MSFT, Pumpkin Roll

Amazon HQ2, GDP and a Boring Year

Posted by Brent Luce on Sep 20, 2017 4:22:17 PM

Where has the blog been?

It has been three weeks since the last blog and wherever I go, people are asking where the blog has been.  Fear not!  The blog is alive and well, and so am I!  We were dealing with some technology difficulties, but if you are reading this, then it means those issues have been solved.  
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Topics: Volatility, Interest Rates, $AMZN, Amazon.com, GDP

Amazon buys Whole Foods - The Cost of Solar Power is Dropping

Posted by Brent Luce on Jun 21, 2017 4:26:31 PM

Quote of the Day

“It is better to know some of the questions than all of the answers” – James Thurber

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Topics: $AMZN, Solar Power, Sectors, Amazon.com, Disruption, Whole Foods

Retail Is Struggling Financially - Current Inflation Numbers are Out

Posted by Brent Luce on May 12, 2017 3:02:33 PM

Retail Death Spiral

If you have not noticed, brick-and-mortar retailers have not been doing so well.  Value investors who have been trying to “bottom-fish” in the space have continued to suffer.  As we know, Amazon and other companies using and benefiting from new technologies have been perhaps the most disruptive force ever to affect consumer buying behavior.  As I have mentioned before, we seem to be arriving at the breaking point where the weak can no longer fight the battle.  This is just one example of how new technologies are changing the way we live and affecting every business and sector.  When looking at investments, I think there are two types of companies – those poised to benefit from these disruptive forces and those who are likely to suffer from it.  The table below, which I am borrowing from MKM, shows the number of store closings announced just this year – this is just major stores, and does not include the hordes of smaller retail stores that have closed.  Amazon has been taking over fifty cents of every new dollar moving into retail e-commerce, so we can guess that 50% of these sales are going right into Amazon’s pocket.    At the bottom you will see the stock price charts of traditional retailers versus Amazon; it is self-explanatory.  Deep Dive:  The New Retail Ecosystem

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Topics: Inflation, $AMZN, Big Data, Amazon.com, Technology, Retail Distribution

Disruption and Active with Passive

Posted by Brent Luce on Apr 20, 2017 4:48:00 PM

Getting Active with Passive Investments

The battle between active and passive investing has been a topic for years.  There are arguments for both and there are varying ways to successfully deploy these strategies. I have blogged before about the proliferation of ETFs and that many investors seek ETFs because they believe they are passive, but in many cases the ETFs they are investing in are specialized and, therefore, not passive.  There is even a whiskey ETF, which I blogged about back in October. Not only are people investing in non-passive ETFs, but they then trade in and out of these not-so-passive ETFs, thereby executing a very active approach.  I have yet to meet an individual investor who successfully held passive ETFs through a bear market without making changes or reacting emotionally at the wrong time.  There are some truly passive ETFs in existence, but as the table below illustrates, even those are not being used as passive investments.  SPY, which is the best known and a truly passive ETF has an average holding period of only 15 days – investors are using this to adjust market exposure on a short-term basis.  

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Topics: Jobless Claims, Passive Investing, $AMZN, Amazon.com, Disruption

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