Investors' Worst Enemy, Earnings Hint Recession, Costco Cheap Chicken, State of Housing Market, Bitcoin Rainbow Chart
Why You May Be Your Own Worst Enemy as an Investor
Howard Marks says...
Stores are more crowded when there’s a sale going on. But in investing, the buying counter at the exchange is less crowded when there’s a sale going on, when prices are falling.
Superior investing is taking advantage of the errors of others. In order to get an above-average return in the long run, you have to buy things for less than they’re worth, which is to say that the other people out there have to be selling that thing for less than its worth.
They’re making a mistake and you need to act in a contrarian way to take advantage of that.
More @ NY Times
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- Value Investor Insight: “Taking the High Road” (Polen Capital)
- Weekend thoughts: bank runs in the social media age (Yet Another Value Blog)
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- Contrarian Investing David Dreman-Style (Nasdaq)
- Nokia was once one of the hottest stocks on the planet (Haymaker)
Corporate Earnings Hint Economy on Brink of Recession
If S&P 500 profits rise to exceed NIPA profits by 20% or more, it is a signal that companies’ reported profits are being generated largely by their accountants. Usually this means that the economy is on the brink of a recession, and that the stock market is about to take a beating.
Details @ Haymaker
- Real Danger’ Of Global Recession Intensifies As Rate Hikes Threaten $4 Trillion In Economic Losses, World Bank Warns (Forbes)
- US Economy: Key Macro Events This Week (Investment Talk)
- CBDCs, SDRs, & The Re-Monetization Of Gold... Here's What Happens Next (ZeroHedge)
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How (and why) Costco keeps its rotisserie chickens so cheap
Costco’s popular chickens have stayed fixed at $4.99 for more than a decade — even in the face of raging inflation. But it’s come at a cost.
In a 2015 earnings call, Costco’s CFO, Richard Galanti, admitted that the retailer was taking a multimillion-dollar hit by not raising chicken prices.
As is the case at most grocery chains, Costco’s rotisserie chickens are a loss leader.
“Very few people simply buy the chicken and leave,” John Longo, a professor at Rutgers Business School, told The Hustle. “They probably shop for other items that provide higher profit margins.”
Costco maximizes the chances of this happening by placing the rotisserie chickens at the back of the store, next to its wines (14% margin) and side dishes.
Details @ The Hustle
- Price Increases Don’t Necessarily Translate to Higher Profits (WSJ)
- PayPal Stock 'Fined' 6% After Flood Of Users Cancel Over $2,500 'Misinformation' Debacle (ZeroHedge)
- Taiwan plans to comply with US's China-related chip rules (Reuters)
- U.S. officials plan to push for price cap on Russian oil at this week's IMF meetings (CNBC)
- Germany to pay December gas bills for households and businesses (The Guardian)
- Long-duration batteries could store power for several days (WSJ)
Current State of the Housing Market; Overview for mid-October
1.) New listings have declined further year-over-year.
2.) Mortgage rates have increased further pushing monthly payments up sharply.
3.) House prices have started to decline month-over-month (MoM) as measured by the repeat sales indexes.
Details @ Calculated Risk
Bitcoin ‘Rainbow Chart’ Sees Possible $600K Price by October 2024
- Why bitcoin's investment case is the "most challenged" it's been in years, according to an ex-Point72 portfolio manager. (Insider)
- OpenSea CFO departs after 10 months (The Information)