Was Buying Jet.com a Waste of Money?

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walmart jet.com waste

Walmart bought Jet.com earlier this year for over $3 BILLION. If you questioned the wisdom of that purchase then, you’re going to love today’s news. It seems that there was a 63 percent increase in online sales during the most recent quarter. That’s good. Even better, most of that increase came from shopping at the flagship site Walmart.com. That’s also good. It seems that the primary driver to this increase was free two-day shipping. That’s great. Check out the Digit review. Free Shipping Equals Higher Online Sales at Walmart You see, all it took to turn Walmart into a bonafide Amazon competitor was to match the latter’s beloved shipping terms. There was no need to panic. All Walmart had to do was take the same website it already had, and offer better shipping terms than it was. There was no need to do anything rash like run out and buy some online shopping company just so that you could say to investors that you were doing SOMETHING. Walmart chief executive, Goug McMillion, even said, “The acquisitions have received a lot of attention, but our plan in ecommerce is not to buy our way to success.” WHAT!?!? Then what in the world did …

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Snap Inc. the Snapchat Company Sued

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It seems that some people are having some buyers remorse after getting in on the Snap Inc., the Snapchat company after the stock failed to maintain its manufactured IPO bump. There is now a class-action lawsuit filed against Snap. If only someone could have seen that a money burning company like Snap going IPO on the promise that more users would someone end the money burning with greater revenues but no extra expenses might not have been the best investment for anyone looking past the, “Hey my kid uses that!” buzz. Oh wait… I might have said something like that. Will Snap Lawsuit Work Against Snapchat Company? Anyway, don’t get your hopes up. This whole thing rests on a former employee stating that Snap overestimated user numbers. The defenses against the suit are both easy and numerous. The company SAID in its pre-IPO docs that the user numbers were not precise and that estimating any number at all was “difficult.” – In other words, even if that employee saw one number, and we went with another number, we already disclosed that. Even if the number was different, the company can argue it isn’t material, so long as all the rest …

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Will The Fed Trigger a Recession?

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Will the Federal Reserve trigger the next recession? The Fed is meeting and most analysts expect that they will signal that they are making no changes in their plan to move forward with at least two more rate hikes this year despite the weakest first quarter economic growth in three years. More Rate Hikes or Bust The Fed is still trying to work its way out of the “historically low” interest rate environment it has been forced to use to keep the economy upright since the Great Recession a few years ago. The trouble is that despite years of economic expansion, none of those years have come across as particularly strong. In fact, with just two exceptions in the last few years, every time the Fed thought the time was right to raise rates, new, bad economic news came out to derail their plans. This time, however, the Fed looks like it will not be deterred by any run-of-the-mill negative data. Even as inflation falls. Fed officials are blowing off the poor first quarter of economic performance. They say that they fill it is temporary and the economy will recover and continue to grow at a better rate, as soon …

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Best Argument For a Coming Recession

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no inflation

Recently, I wrote about how lots of various financial analysts and pundits predicting a coming stock market crash or imminent recession are more interested in trying to take credit for making a guess than in accurately predicting what the facts actually support. However, there is one very good case for predicting a recession coming in the next few years. Predicting Recessions It is as likely as not that the next recession will trigger the next stock market correction. Of course, the opposite has been known to happen as well. Most recently, the internet bubble popping took the economy with it, when it caused the bankruptcy and fire sale of dozens of formerly high-spending technology companies and sent their employees flooding onto the market, just when the demand for them vanished. On the other hand, the slow motion implosion of the housing market, and its affects on poorly leveraged, and managed, banking companies, followed by their panicked actions to stay alive, is what caused the so-called Great Recession of the Bush the Younger era. Is Acorns safe? Read this review. These days, most analysts like to predict a stock market crash based on “knowing” that the market is over-valued, or propped up …

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Lowest Cost Mutual Funds No Minimums

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low cost investing mutual funds

When it comes to getting started investing, it is often that first step that becomes the biggest hold up. For many would-be investors the most formidable barrier is actually free, that of setting up an actual account. However, for those with the momentum to cross that line, the next barrier is the cost of investing, most often in the form of a minimum investment. Skipping over these two barriers is one of the things that makes automatic investing apps like Acorns so attractive to new investors. They both eliminate the need to choose and set up a brokerage account and offer a way to get started investing with as little as five dollars. No Minimum Investment Mutual Funds with Low Costs Theoretically, a single investment in a mutual fund with a $1,000 doesn’t sound insurmountable. However, when every reputable financial advisor recommends diversifying your investments among several different funds, that $1,000 minimum quickly adds up to a $5,000 or even $8,000 minimum, to obtain the right kind of diversification. Throw in a 5.25% up-front load for many mutual funds sold by advisors, and that’s a lot of initial overhead. Fortunately, there are many low-cost, do-it-yourself mutual funds that you can …

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The Uber IPO

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The topic of Uber’s IPO came up at lunch today. This is a shock, because, as of today, there is no Uber IPO. In fact, it will probably be a long time before there is an Uber IPO, if ever. Why No Uber IPO Yet? Wondering why there is no Uber IPO, and why there is still no Uber IPO planned? The answer may surprise you. Uber actually loses money. A lot of money. In fact, Uber isn’t so much a business, as a cash incinerator desperately trying to make the transition to viable proof of concept. Uber does a pretty decent job keeping this fact out of the headlines, but the truth is that Uber loses money hand over fist. If it were to file for an IPO, it would have to break out and detail its finances, and it really doesn’t want people focusing on that right now. However, Uber did recently release some financial data, even though it isn’t required to do so. (Keep in mind that such numbers are unaudited, and not subject to any sort of SEC scrutiny). In that data, it reported gross revenue from bookings of $20 billion. That’s pretty impressive. However, after …

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Oil Drops Below $50 Again – Now What?

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oil prices fall below 50

Not long ago, I posted about how oil prices would never see anything near $100 a barrel again, because as soon as prices started climbing above $50 or $60, U.S. producers would crank up previously idled oil fields, and that is just what happened. With OPEC’s oil production cut earlier this year, prices indeed did start rising, and U.S. producers turned the pumps back on. Prices have made it back up in to the fifties. Today, however, prices slipped back below $50 per barrel ahead of a report on U.S. oil rig count that most analysts predict will show even more U.S. production coming online. Couple that with uncertainty about whether OPEC — and Russia — will extend their supply cuts, and you have investors nervous that prices have nowhere to go but down. Oil Prices and U.S. Stock Prices The reality is that, for America, $50 per barrel is a pretty happy medium spot. At $50 per barrel, oil value is high enough for most U.S. producers to make a profit, and for banks to continue feeling good about credit backed by oil reserves. Together, this keeps the stocks of S&P 500 companies like Exxon and Shell and so …

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Is The Stock Market Really Overvalued?

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stock market pop coming

  Hang around the world of finance very long, and you’ll see history repeating itself, especially when it comes to financial news articles. When it comes to a stock market in the middle of an extended rally, all manner of financial and investment analysts turn into Professor Trelawney, seeing the Grim in every cup of tea. The longer the rally goes on, the more pundits who join in predicting a stunning market collapse. The reason is that doing so, is a low-risk way to get your name in the papers, and, if you get lucky, to be labeled a guru based on “predicting” the inevitable stock market crash. Remember the analyst who predicted the muni bond crash that never happened? No? Neither does anyone else, but she built up quite a lot of business based on that publicity before everyone forgot all about her. (And, before she changed her story.) Of course, you can make a name for yourself the other way. Back during the internet bubble, one analyst earned a reputation for “always being right” about the market going higher. She predicted it would go higher quarter after quarter, right on through the top… and after the top… and …

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Credit Scores Make No Sense

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credit score real number

I spend a lot of time talking about whether or not the free credit scores from CreditKarma, or the WalletHub free credit scores, or the credit scores from Credit Sesame are “real credit scores” or not. The reality is that most of the time, it doesn’t actually matter. If it’s a Tuesday afternoon and you are sitting on your porch with a cold one, it is irrelevant whether your credit score is 714 or 723 or 815. The only time it matters, is when you are actually getting a loan. An interesting situation this weekend has shown me that even those real credit scores aren’t really real. Real Credit Scores When most people talk about a “real” credit score, they mean a FICO score. Most lenders rely upon FICO scores to make a decision about lending or what interest rate you get. The catch is that there are numerous kinds of FICO scores ranging from those used to judge creditworthiness for credit cards, a different one for car loans, and another still for mortgages. Beyond that, there are three major credit bureaus and all three of them can yield a different score depending upon what has been reported to each company. In …

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Fed Raises Rates – More Coming

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fed raises interest rates march

The Federal Reserve raised interest rates one-quarter of a point, or 0.25%, in a widely expected move. The benchmark rate is now technically the range between 0.75 percent and 1.0 percent, although most people refer to this simply as 0.75%. As pretty much everyone predicted, the Fed raised interest rates at its March meeting. This is the second interest rate hike in just three months, and the third one overall since the Great Recession. Fed Chairwoman Janet Yellen said, “The simple message is, the economy is doing well.” What Happens Next? While some indicators are showing signs of inflation, there is also an increasing concern that the economy isn’t as robust as some might think. Things certainly look good right now, but few analysts look as this economy as a powerful train moving forward, so much as a boat drifting in the right direction and easily pushed off course. As a result, the guidance from the Fed continues to be for three total interest hikes in 2017, meaning that currently they expect two more hikes between now and December. Just when those hikes will come depends a great deal on how the economy fares. Another few months of good job …

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