When Bigger Is Better

Originally posted October 22, 2021.  Supply chain disruptions and rising raw materials costs are eating into profitability and resulting in shortages of products for many firms. Procter and Gamble is not immune to rising prices and supply chain disruptions, but strong brand value and impressive scale have enabled the company to navigate the environment better than some. Price hikes are being passed onto consumers and P&G is finding a way to keep its products in stock by leveraging its scale. Sharon Terlep writes in The Wall Street Journal: Procter & Gamble Co. said that it expects solid sales and profit growth over the next nine months, even as costs for everything from warehouse … [Read More...]

TOP HEAVY: Focus on Big Indexing Could Cause Market Chaos

"The following post is by E.J. Smith, at YourSurvivalGuy.com. There was a time when I would point investors to low-cost index funds, but as you can see, that ship has sailed." — Dick Young In an excellent review of a festering problem in the market today, Randall Smith of The Wall Street Journal, outlines the $1.3 trillion Vanguard Total Stock Market Index Fund (VTI), and the growing importance of the CRSP U.S. Total Market Index to the future of markets. What’s concerning to Your Survival Guy is that the top 10 companies of the CRSP U.S. Total Market Index comprise a quarter of its value. Does anyone remember the plight of the Nifty 50 in the 70s? When people fell out of love with the … [Read More...]

SOLD OUT: Inflation, Supply Issues Limit Customer Options

Companies faced with limited supplies of raw materials and rising costs of goods are narrowing down the models of products they make to only the most profitable. That usually means that they are building the higher-end, pricier models in their product portfolios, leaving families with lower earnings unable to find cheaper alternatives. The Wall Street Journal reports: Anthony Coughlin’s appliance shop has little trouble filling orders for high-tech washing machines or designer ovens. More difficult: satisfying customers on the hunt for bare-bones, low-budget machines. “There was a day when a customer could walk in the door and buy a secondary piece or a landlord special and have 100 … [Read More...]

A Case Study in Dividend Success

At Young Research, when we look for dividend stocks for the Retirement Compounders, we favor companies with strong balance sheets, stable businesses, a healthy dividend yield, and a history of increasing dividends. What does that look like in practical terms? While the ideal company financial position for the RCs can vary by industry and sector, Procter & Gamble serves as a nice case study in dividend success. A Strong Balance Sheet We look for companies with strong balance sheets because financial strength provides flexibility during tumultuous times in the business cycle. Procter & Gamble (P&G) has one of the strongest balance sheets among large U.S. businesses. Its debt is … [Read More...]

Gold’s True Story

Back in 1971, I had just started in the institutional research and trading business on Federal St. in Boston. Our firm traded and researched gold shares. I would in fact shortly be on the way to London to begin research on a lengthy gold study. This presentation by Claudio Grass published on LewRockwell.com is pretty much as I remember events, and is a great summary of the facts and events of that time. He writes (abridged): This year marked the 50th anniversary of President Nixon’s decision to unilaterally close the “gold window”. The impact of this move can hardly be overstated. It triggered a tectonic shift of momentous consequences and it changed not just the global economy and the … [Read More...]

Why Mutual Funds No Longer Work for Your Retirement

My recent study covers four of the most widely owned equity-based mutual funds. Vanguard Equity Income Vanguard Dividend Growth T. Rowe Price Dividend Growth Fidelity Dividend Growth Here’s the 10-year compounded growth rate for each: T. Rowe Price Dividend Growth 12.0% Vanguard Dividend Growth 12.0%, Vanguard Equity Income 11.7% Fidelity Dividend Growth 10.0%. Today, each of these four multi-billion dollar funds has become far too big to allow crafting a portfolio with a suitable number of stocks that would meet my criteria. There are simply not enough publicly owned candidates. Note how the long-term returns for all four of these funds are basically the same. In … [Read More...]

How to Take Charge of Your Own Health

Throughout my career, I’ve considered most of the advice given to individual investors as B.S.  I’ve been in the professional investment advice advisory industry since 1971, when I first started speaking at major money conferences around the world, trying to help investors separate the investment chaff from the wheat. In the mid 90s, Money Magazine did a feature on the five largest circulation individual investment newsletters, and rated each A–F.  Money handed out only one A grade. Yes, to my investment newsletter, Richard C. Young’s Intelligence Report. Not long thereafter, with Matt and Becky in college, it seemed like a good time for Debbie and me to buy V-Twin Harleys to help us to … [Read More...]

Tech Ever More Important in the Auto Industry

The world has learned over the last year just how important computers are to the modern auto industry, as shortages of vehicles, or of vehicles with certain options, have been created by a lack of chips to put in vehicles at the factory. An average 2021 automobile has around 1,400 chips in it. With so many chips necessary for each automobile, the shortage is going to take a toll on the industry, cutting the production of an estimated 3.9 million vehicles this year. Part of the problem with chips is that factories are expensive, costing around $15 billion to build. And, they take a long time to complete, at around 5 years. With computer chips becoming ever more integral to automobiles, and … [Read More...]

Work to Make Money/Invest to Save Money

The U.S. government must finally wise up and put an immediate end to the insane double taxation of dividends.  The government, facilitated by the Fed, is in an ongoing war to destroy the value of the dollar by printing money beyond any reasonable rate of expansion. Simply take a look at real estate prices to witness the explosion in liquidity.  Do not let the government destroy the value of your retirement. Demand that the government ends the double taxation of dividends!   Originally posted October 17, 2017. With the exception of the large sums of money that I invested in zero-coupon treasuries (Benham Target Funds) in the 1980s and 1990s, I have never invested based on how much money I … [Read More...]