Money & Finance

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  1. Iconic Australian surf brand Quiksilver is purchasing its hometown rival Billabong for $300 million. Kyles, Tylers, and Blakes everywhere are freaking out. That’s because if you didn’t wear a Billabong or Quiksilver shirt in sixth grade to complement your long hair and seashell necklace, you weren’t cool. But neither company has been especially cool lately. Billabong wiped out in 2013, admitting its brand was a thing of the past. And Quiksilver hung zero when it filed for bankruptcy in 2015. Luckily, PE shop Oaktree Capital was there to scoop up Quiksilver. And after two years of financial CPR, it’s hoping a Quiksilver-Billabong duo will be gnarly enough to bring back the glory days. All together, they’ll have 600 stores in 28 countries. Surf’s up. http://morningbrew.cmail20.com/t/j-l-okddrz-yhyuhjkhdk-ji/
  2. The Weinstein Company

    Weinstein just keeps falling from grace. This time, the tarnished name is in the news as The Weinstein Company nears a sale for less than $500 million, roughly half of which is debt. Insult to injury: shareholders risk losing all equity. Of the 20 bids the film studio has received since December, six have made the short-list, including former Obama cabinet member Maria Contreras-Sweet. Some other contenders: production company Killer Content (supported by Abigail Disney), studio Lionsgate, and investment firm Shamrock Capital (founded by another Disney, Walt's nephew Roy). After co-chairman Harvey was fired following dozens of high-profile sexual assault and harassment allegations, Weinstein Co. found itself in cinema purgatorio. Its slate of upcoming releases—including drama Current War about Thomas Edison and George Westinghouse—is collecting dust while the studio tries to write a happier ending. And in Hollywood, timing is everything. While operating expenses and legal bills continue to pile up, Weinstein Co. may soon have no choice but to file for bankruptcy.
  3. Understand the Concept of Passive Income

    Essentially, passive income is money acquired without using your personal exertion . It’s income that is not linked to hours worked. If work is required, it is usually done one time with the money paid multiple times. There are two forms of passive income: Income derived from business and income derived from investments. Business income is the money that one receives without actually needing to work in the business. One acquires a business that is either run by someone else or is self sufficient. The profits generated are taken out by the owner thus yielding passive income. Robert Kiyosaki is the most famous advocate of this principle and has been teaching it for decades, read Rich Dad Poor Dad . Income derived from investments is making money from money. Instead of you working for money, it is putting your money to work for you. depending upon the investment, a rate of return is realized which generates passive income. Examples of this are dividends from stocks, appreciation in real estate, interest on savings, etc… The wonderful aspect of this type of income is that the money is created regardless of one’s efforts. If you don’t show up for work, the income still exists. You will earn the same while at work as you would sitting on the beach. In addition, this allows one to increase their overall efforts. If your money is working while you are focusing on something else, you are, in effect, paid twice for your time. This is called leverage and it’s easy to see how it is possible to create massive wealth under this scenario. Focus your attention on creating passive streams of income. It holds the key to all financial freedom.
  4. Innovation with IBM Watson The underlying fund investments in AIEQ are based on the results of proprietary quantitative models developed by Equbot with IBM Watson artificial intelligence. The AI Powered Equity ETF (NYSE: AIEQ) may help U.S. Equity investors enhance their ability to realize market appreciation and diversify their strategic alpha portfolio exposure.
  5. Small Cap, Mid Cap, Or Large? What is The Right Mix For Your Portfolio?

    Just a quick update to the above article. I have since moved to holding ONLY RSP Equal Weighted S&P 500 index ETF. I figure this gives me more than enough exposure globally while ensuring that I'm in the larger boats should the tsunami drain soon. I would be interested to know how badly hurt this index will be compared to Cap Weighted indexes when the Federal Reserve actually begins to dump their holdings. What do you want to bet that they didn't invest their QE funds "equally weighted"?
  6. ALEC Attacks State Pensions Funding Assumptions - Why?

    The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us. As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air. Of course, since pensions are nothing but a massive stream of future liabilities that stretch out into perpetuity, every 100 bps increase can substantially, and artificially, lower the fund's reported underfunded level. In fact, we estimated the impact of higher discount rates on underfunding levels in a post entitled "An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion"...here was the result: Fortunately, we're not the only ones that see through the ridiculously phony assumptions that go into duping retirees and taxpayers as the team at American Legislative Exchange Council (ALEC) has just dropped a report which reviews the financial health of public pensions all over the country if you toss out their 7.5% discount rate and replace it with a risk free rate... Faulty accounting and reporting methods obscure the magnitude of unfunded liabilities. Partly in response to the devastating impact of the Great Recession, the Governmental Accounting Standards Board (GASB) made two significant changes in 2012 (Statement No. 67, Financial Reporting for Pension Plans and Statement No. 68, Accounting and Financial Reporting for Pensions) to the methods used for measuring the financial health of pension plans. GASB intended these changes to increase transparency, consistency, and comparability of pension information. Public pensions are now required to report their assets and liabilities using a standardized actuarial cost method, to disclose investment returns, and to include unfunded pension liabilities on state balance sheets. Unfortunately, states have found ways to work around these requirements and paint an unrealistically rosy picture of their pension funding status. The Center for State Fiscal Reform at ALEC analyzes the annual official financial documents of more than 280 state-administered pension plans using more realistic investment return assumptions in order to gain a clearer picture of the pension problem. The unfunded liabilities of each pension plan are revalued using a discount rate equal to a risk-free rate of return, best represented by debt instruments issued by the United States government. This year's study uses a risk-free rate of 2.142 percent, derived from an average of the 10- and 20-year U.S. Treasury bond yields over the course of 12 months spanning April 2016 to March 2017. Based on these revised investment return assumptions, we report on total unfunded pension liability, unfunded pension liabilities per capita, and the funding ratio of these plans. ...and as you might expect, the results are fairly bleak. In terms on aggregate underfunding, ALEC figures our taxpayer-funded pension ponzis are roughly $6 trillion underfunded, or roughly 2-3x worse that the often-quoted $2-$3 trillion underfunding calculated by state pension administrators. Meanwhile, using ALEC's discount rates, the state of California is nearly $1 trillion underfunded by itself. So, what is your personal share of these massive public liabilities? Well, if you're in one of the 10 bottom states it's anywhere from $25,000 to $45,000. Of course, that's the liability for every man, woman and child so the typical American household (with 2.57 residents) in those states is on the hook for $67,500 - $115,650. ALEC's full report http://www.zerohedge.com/news/2017-12-21/forget-phony-pension-accounting-heres-how-much-your-state-pension-really-underfunded ------------------------------------------------ Now ask yourself WHY such an already questionable lobbying firm of corporate overlords so tainted that even major corporations have had to disassociate themselves for backroom dealing would release such an apocalyptic view of our pension systems? I think it is because they want to undermine trust and eventually push for their extinction. Replaced by some weak and unsuccessful 401k plans used in their corporate world. Notice that instead of focusing on how they can FIX the problems they have been exaggerating they only offer Pension Armageddon as the ultimate fate. @Marra McDonald Johnson