Author: therawinformant

Bill Gates: Dr. Fauci ‘rolls with the punches’ amid criticism

Microsoft Co-Founder Bill Gates joins ‘Influencers with Andy Serwer’ to discuss the Trump administration’s handling of the COVID-19 pandemic.

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31 July 2020
People Fear They’ve Got Too Much Cash in Their Bank Accounts

(Bloomberg) — The savers are getting restless.Running out of guaranteed ways to get meaningful returns, some people are increasingly being tempted to raid their interest-earning cash savings to load up on assets such as bitcoin, gold and stocks. The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off.For a while, Brian Harrington, 28, had been satisfied with a high-yield savings account at Ally Bank, earning a risk-free 2%. Now, the marketing consultant in Anaheim, California, is planning to convert his remaining $15,000 in savings into bitcoin. He thinks the future is one of long-term economic stagnation and low rates.“I’m not rooting for Doomsday,” he said. “But you have to keep searching for yields.”The last few months have, in some respects, been a boon for account balances. Nationwide lockdowns enacted to slow the spread of Covid-19 have cut consumer spending, and stimulus checks arrived for millions of Americans. The personal savings rate rose to a record 32.2% in April. Mint, a financial planning platform, told Bloomberg that its customers deposited 16% more into their accounts between March and June compared with the same period last year.There’s one problem: Now isn’t a great time to hold onto money.It had become standard advice in personal-finance subreddits and Facebook groups to keep extra cash in high-yield savings accounts, but the rates on those have fallen steadily for the past year. Popular brands such as Ally and Marcus — the consumer arm of Goldman Sachs Group Inc. — offered rates in July of 1% and 1.05%, respectively; both were over 2% a little over a year ago, when the U.S. Federal Reserve cut rates for the first time since the 2008 financial crisis.“Some banks will drag their feet a bit to stand out from the crowd, but they’re all working their way down,” said Greg McBride, chief financial analyst at Bankrate.com, explaining the drop in returns across the board.There’s no guarantee that yields for these accounts will rebound any time soon.“The interest rates the Fed sets is a huge component, but it’s also related to the health of the overall economy,” said Anand Talwar, deposits and consumer strategy executive for Ally.Other traditionally safe vehicles have taken a hit as well. The average rate for five-year certificate of deposits is 0.47%, down from 1.88% the same period last year, according to Federal Deposit Insurance Corp. data.Bitcoin is up about 55% in 2020, while gold has risen 29%, smashing the record price set in 2011, as investors flock to the precious metal as a hedge against inflation. Stocks, meanwhile, have surged since bottoming out at the start of the coronavirus outbreak in the U.S.: From March 23 to July 1, the S&P 500 rallied 40%, its best 100-day performance since 1933, according to Bespoke Investment Group.The once-in-a-century rally has given Americans confidence about the market in the long run. A survey by Bankrate found that 28% of Americans said the stock market was their top choice for long-term investments, up from 20% last year. Only 18% of respondents chose cash investments such as savings accounts or CDs, the lowest level recorded in eight years.The results represent a remarkable shift toward risk, McBride said, noting that in previous surveys stocks came in a “distant third” to real estate and cash savings.For Meyer Denney, a software engineer from Seattle, saving to buy a new house within the next five years means striking a delicate balance between certainty and upside.The 35-year-old has most of his money parked in a high-yield savings account, for now. He’s looking at funds that invest in consumer staples, or corporate bonds that don’t carry the same volatility as typical stocks or index funds.“I’m worried that in three years we see our dream house — but [then] the market tanks 10 or 15%,” Denney said. “So I’m trying to err on the safer side.”Even in normal conditions, financial advisers recommend having a cash reserve of several months of expenses. In the middle of an economic downturn and a pandemic, that need for a cushion only increases.“Given the precarious state of the economy and heightened risk of incurring out-of-pocket medical expenses, it’s still important to have emergency funds in checking or savings accounts,” said Heidi Shierholz, senior economist at the think tank Economic Policy Institute.Edward Usuomon, 18, has no regrets about moving his money out of the bank. The Detroit native began working as a tutor last September; after a few months of saving he realized there were ways to make better returns that rates his Michigan First Credit Union account offered, which he recalls as being less than 0.5%.“I first started trying out stocks for fun,” he said. “Eventually I thought, ‘Why do I have all of this money just sitting in my account?’”So around the beginning of April he began withdrawing money from his savings account, a few hundred dollars at a time, to buy cryptocurrency, and shares of Tesla Inc. and Apple Inc. Usuomon now estimates he dedicates 25% of his salary to buying the higher-risk assets.“I don’t have too much to worry about now besides my apartment and my car,” he said. “I’m trying to get into investments early so I can hopefully get rich.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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31 July 2020
How Bill Gates would treat COVID-19 if he were President of the United States

Microsoft Co-Founder Bill Gates joins ‘Influencers with Andy Serwer’ to discuss the U.S. federal government’s pandemic response and how it can improve.

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31 July 2020
Forget gold and Bitcoin. I’d buy cheap stocks after the market crash to make a million
The stock market crash has provided numerous opportunities for investors to purchase cheap stocks. Despite this, some investors may feel that other assets such as gold and Bitcoin offer superior growth prospects. After all, they have risen sharply in price of late, and may have outperformed some stocks over recent months.

However, the track record of the stock market suggests that it offers long-term recovery potential. As such, and with gold and Bitcoin having their own risks, equities could prove to be a better means of making a million than other assets.

Cheap stocks: a buying opportunity

The stock market’s track record suggests that buying cheap stocks can be an effective means of making a million. It has always experienced periods of boom and bust, with neither of them lasting forever. Therefore, investors who can buy undervalued businesses during downturns can be among the biggest beneficiaries during the likely recovery.

At the present time, the continued risk of a second market crash means that many shares are trading on low valuations. In some cases, they are not wholly merited due to the financial strength and competitive advantage of businesses in sectors that have long-term growth potential. As such, there appear to be opportunities for investors to purchase bargain shares even after the stock market’s recent rebound from its decline in February/March.

Clearly, some cheap stocks are unlikely to survive the challenging outlook faced by the world economy. As such, it is imperative for investors to try and purchase the best quality companies they can find, and to diversify across numerous industries and regions. This may reduce your overall risks, and help to provide sustained growth for your portfolio.

Bitcoin and gold: an attractive risk/reward opportunity?

Of course, some investors may seek to avoid cheap stocks in favour of other assets such as Bitcoin and gold. While their prices may have risen sharply, they appear to offer less attractive risk/reward investing opportunities than a portfolio of equities.

For example, gold’s appeal could deteriorate in the coming years as investor sentiment gradually improves. Furthermore, it currently trades close to a record high, which may indicate that there is limited scope for a price rise over the coming years.

Similarly, Bitcoin may not be an attractive investment opportunity. Its limited size and ongoing regulatory risks could mean that its price level is overly generous. And, with the virtual currency lacking fundamentals, challenges in valuing it may mean that buying cheap stocks is a far more logical step for long-term investors.

Therefore, while further difficulties may be ahead for stock market investors, low price levels and the recovery potential of equities mean that now could be the right time to buy a diverse range of companies to make a million.

5 stocks under $5

We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

See the 5 stocks

*Extreme Opportunities returns as of June 5th 2020

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Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Forget gold and Bitcoin. I’d buy cheap stocks after the market crash to make a million appeared first on Motley Fool Australia.

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31 July 2020
Nokia shares jump after cull of low-margin business sees earnings beat

Finnish telecom network equipment maker Nokia reported an unexpected rise in second-quarter underlying profit on Friday as it took on less low-margin business particularly in China, sending its shares up 13% in early trade. Cutting less-profitable service business and not winning 5G radio deals in the cut-throat Chinese market helped Nokia, where new Chief Executive Pekka Lundmark takes over this weekend, upgrade its earnings outlook for 2020. “We do not mind trading poor revenue which doesn’t have high quality margin for better revenue,” outgoing chief executive Rajeev Suri told Reuters.

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31 July 2020
Is Southwest Airlines Co.’s (NYSE:LUV) Stock Price Struggling As A Result Of Its Mixed Financials?

Southwest Airlines (NYSE:LUV) has had a rough month with its share price down 9.3%. It is possible that the markets…

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31 July 2020
Stock market crash: why I’d grab this rare chance to buy cheap shares
Despite the recent market rebound, there are still a relatively large number of cheap shares that could deliver high returns in the long run.

Certainly, their prices could fall further in the short run due to risks such as a continued rise in global coronavirus cases. However, the recovery potential of the stock market suggests that buying undervalued companies today can lead to high returns compared to other assets.

Moreover, some share prices are rarely as cheap as they are at the moment. Grabbing wide margins of safety that may be temporary in nature could, therefore, be a logical move.

A rare opportunity to buy cheap shares

The last time there were so many cheap shares available to buy was probably during the global financial crisis in 2008/09. Although the recent market rebound means that some sectors now appear to be fully valued, other industries continue to have extremely undervalued shares on offer. In some cases, they trade well below their historic average valuations. This could indicate that they offer good value for money, and that investors have priced in many of the risks they face.

Such opportunities are generally rare. Over a decade has elapsed since the last global bear market and recession, and many investors are likely to be able to count on one hand how many times they have experienced such periods in their own lives. Therefore, taking advantage of the opportunities available today could be a sound move that allows you to buy stocks when they are unusually low, and sell them at a later date when they are relatively likely to trade at higher prices.

Recovery potential

Buying cheap shares today could allow investors to capitalise on a sustained recovery over the long term. As per the global financial crisis, and other past bear markets, a recovery in the stock market’s price level seems likely. Even though there are risks facing the world economy, the impact of stimulus packages such as quantitative easing and tax changes in many major economies could lead to a strong recovery over the coming years.

As such, focusing your capital on undervalued shares could be a more profitable strategy than buying other assets such as cash and bonds. Although less risky assets may offer a higher chance of a return of capital, their profit potential may be very limited in an era when interest rates look set to persist at low levels. In fact, fixed-income securities and cash savings accounts may erode your spending power if monetary policy measures such as quantitative easing prompt a period of higher inflation.

While buying cheap shares today may not necessarily feel like a natural move for any investor to make, history suggests that it is a logical step for those individuals with long-term horizons. Some stocks are rarely this cheap, and could offer high total returns in the coming years.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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*Returns as of June 30th

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Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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31 July 2020
3 ASX dividend shares for dependable income
Some dividend yields are looking sky high right now – hello, Flight Centre Travel Group Ltd (ASX: FLT). But uncertainty is also at highly elevated levels. Dividends are inherently uncertain. They can be cut or not paid at all if funds are not available. Investors tend to prefer some degree of certainty around whether they will receive investment income. Companies that operate in industries with reliable demand are more likely to be able to pay consistent dividends. Here we take a look at three ASX shares for dependable dividends.

3 dependable ASX dividend shares

AGL Energy Limited (ASX: AGL)

Electricity is a non-negotiable necessity, so the revenues of power generator AGL are fairly certain. AGL targets a payout ratio of 75% of underlying profit after tax and is currently offering a dividend yield of 6.68%. In the first half of FY20, AGL declared an interim dividend of 47 cents per share. This was down 8 cents per share, consistent with AGL’s payout ratio as underlying profit was down 20% for the half year. This was due to a power station outage, lower wholesale gas prices, and reduced gas volumes. AGL has predicted full year profits in the upper half of its guidance range of between $780 million and $860 million.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue produces iron ore which is the main ingredient in steel. Iron ore is the world’s most used metal accounting for about 95% of metal tonnage produced worldwide. This ASX dividend share targets a payout ratio of 50% to 80% of net profits and is currently offering a dividend yield of 5.74%. In the June quarter, Fortescue reported record iron ore shipments of 47.3 million tonnes. Full year shipments were 178.2 million tonnes, exceeding the top end of guidance. FY21 guidance is for iron ore shipments of 175 – 180 million tonnes. Fortescue paid a fully franked FY20 interim dividend of 76 cents per share, up from 30 cents per share in 1H19.

Orora Ltd (ASX: ORA)

Packaging provider Orora supplies customers with glass bottles, aluminium cans, caps and closures, boxes, cartons, and more. Packaging is ubiquitous – a necessity in making products available for consumption. This ASX dividend share is currently offering a yield of 7.07% but some have questioned how sustainable this is given Orora’s high payout ratio. Orora returned $600 million to shareholders earlier this year via a special dividend of $450 million and a capital return of $150 million. While COVID-19 will have a negative financial impact, however, Orora’s estimate limits this to $25 million in the second half.

5 stocks under $5

We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

See the 5 stocks

*Extreme Opportunities returns as of June 5th 2020

More reading
Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 ASX dividend shares for dependable income appeared first on Motley Fool Australia.

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31 July 2020
ASX 200 drops 2%, ASX banks fall, Super Retail jumps
The S&P/ASX 200 Index (ASX: XJO) fell by just over 2% today to 5,928 points.

The number of COVID-19 case numbers continue to mount in Victoria and the NSW cases continue to edge higher.

Super Retail Group Ltd (ASX: SUL) was a bright spot

The Super Retail share price rose by 9.5% today, it was a shining light on a pretty negative day for the ASX 200.

The retailer announced updated expectations for the FY20 year with the full year result expected on 24 August 2020.

In the 52 weeks to 27 June 2020, three of the company’s four core businesses achieved solid sales growth. Supercheap Auto sales increased 7.6%. Rebel sales grew 3.3% and BCF sales increased by 4%. However, Macpac sales declined by 5%. Overall, total sales grew by 4.2% with like for like sales growth of 3.6%.

Super Retail revealed that sales rebounded strongly during the fourth quarter as the easing of COVID-19 restrictions led to a significant uplift in domestic tourism and travel, personal fitness and outdoor leisure activities. In April there was a 26.2% decline in like for like monthly sales during the peak of the COVID-19 lockdown. But then sales increased by 26.5% in May. In June the momentum continued with like for like sales growth of 27.7%.

The company also announced some preliminary unaudited financial results for FY20.

Total revenue was approximately $2.82 billion, up from $2.71 billion.

Pro forma segment earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to come between $327 million to $328 million – up from $315 million in FY19. Pro forma segment earnings before interest and tax (EBIT) is expected to be between $235 million to $236 million – up from $228 million.

Pro forma normalised net profit expected to come between $153 million and $154 million. The FY19 profit was $153 million. These pro forma numbers exclude $54 million of ‘abnormal items’.

ASX banks take a tumble

The big four ASX banks were among the largest hits on the ASX 200 today.

Australia and New Zealand Banking Group (ASX: ANZ) suffered a share price fall of around 2.2%.

The Commonwealth Bank of Australia (ASX: CBA) share price dropped by around 2.75%.

The National Australia Bank Ltd (ASX: NAB) share price fell by approximately 2.5%.

Finally, the Westpac Banking Corp (ASX: WBC) share price dropped 3.3%.

Most of the ASX 200 was actually in the red today. Whilst Super Retail was one of the best performers, it was another painful day for a business which has suffered a lot recently:

AMP Limited (ASX: AMP)

The AMP share price dropped close to 13% today after giving an update that showed its underlying profit is expected to halve in the upcoming FY20 half year result.

AMP said that the Australian wealth management division is expecting operating earnings of approximately $60 million.

AMP Capital is expecting operating earnings of approximately $70 million.

The AMP Bank division is expecting operating earnings of around $50 million. AMP Bank is expecting a credit loss provision of $25 million due to COVID-19 related economic conditions.

The CEO of the ASX 200 share, Francesco De Ferrari, said: “AMP has taken decisive action to support clients and employees and maintain a strong and resilient business, as COVID-19 continues to impact investment markets and the broader economy.

“Our strong capital position and liquidity have positioned us well to respond, though our first half results have been impacted by the market volatility.

“The pandemic has presented many challenges but has not distracted us from our mission to transform AMP into a simpler, client-led, growth orientated business.

“In the first half, we have made significance progress in delivering our strategy including completing the highly complex sale of AMP Life which simplifies our portfolio and sets us up well for the future.”

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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31 July 2020
Is the REA Group share price a buy?
Is the REA Group Limited (ASX: REA) share price a buy?

It’s an interesting one. The REA Group share price is still a little below where it was in February 2020. Indeed, since 23 March 2020 the REA Group share price has risen by 67%.

Lower interest rates certainly should increase the valuation of businesses. Australia’s interest rate is now just 0.25%. I think that justifies some of the rise. But COVID-19’s resurgence could knock over some of the recovery in my opinion.

FY20 third quarter

I think the third quarter update gave us an insight into why a second wave could be so damaging to the property market and REA Group.

In the three months ended 31 March 2020 the property business reported that free cash flow was down 20%.

It was the number of residential listings in April that makes the REA Group share price a hard one to judge. REA Group said that the number of residential listings in April 2020 was down 33%, with Sydney down 18% and Melbourne down 27%. It’s hard to grow earnings with that type of decline.

REA Group needs a certain amount of volume to maintain, let alone grow, its earnings. REA Group’s stats will probably show that listing numbers rebounded in May and June nationally as COVID-19 was eradicated from states and territories one by one.

The Victorian property market’s size is not enough to knock REA Group’s entire growth off track, but it’s obviously a sizeable part of the overall picture with Melbourne being the second largest city. It could be argued that REA Group is trading too highly with a potential slowdown of listing numbers looking more likely.

So does this mean that REA Group should be avoided?

Investing is meant to be for the long-term. What happens over the next six months or twelve months shouldn’t necessarily make or break the overall thesis for a business.

I think it’s highly unlikely that COVID-19 will be around forever. The Spanish Flu eventually went away by itself. There are a number of healthcare teams around the world that are trying to find a solution for COVID-19 – either a vaccine or a treatment (hopefully both). The Oxford University vaccine is particularly promising at this stage.

When you look further into the future, the REA Group share price doesn’t seem to be that bad if it can get back to good growth over the rest of the decade – it’s trading at 35x FY22’s estimated earnings.

What excites me about the longer-term with REA Group is the international investments in property sites in the US and Asia – two regions with much larger populations and economies than Australia. If you’re quite optimistic about those stakes then perhaps today’s valuation easily be justifiable.

For me, I think REA Group is priced too highly with the potential for damage to property sentiment (and listings) over the next six months. Particularly in Victoria and NSW. However, I think REA Group will easily ride through this difficult period. At 30 April 2020 it had “low debt levels” and a cash balance of $135 million. It also has debt facilities it can tap into.

But I’m still positive about some property ASX shares

I don’t think every property share is too expensive. I’m particularly attracted to Brickworks Limited (ASX: BKW) with its defensive assets of the industrial property trust and the shares of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). I like Soul Patts as a separate investment as well.

In terms of real estate investment trusts (REITs), I also like the farmland landlords Rural Funds Group (ASX: RFF) and Vitalharvest Freehold Trust (ASX: VTH). They both have distribution yields of more than 5%. They bpth offer defensive rental income which should operate fairly differently from most other REITs and indeed most of the ASX. We all need food, after all.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading
Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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31 July 2020