Tesla Model 3: $750 Million in Deposits. New Cybertruck: Not so much.

January 6, 2020

Via Fortune.com  Full Article

“The November unveiling of Tesla’s Cybertruck was met with raised eyebrows, and not all were about its bizarro postapocalyptic design. Tesla revealed impressively low pricing—the Cybertruck will start at $39,900—but a stunt intended to demonstrate the truck’s toughness ended with two “bulletproof” windows shattered.

All in all, hopes were dashed that Tesla could move aggressively into the wildly lucrative (and currently gas-guzzling) American truck market with such a radical design. Credit Suisse analysts said legacy truckmakers could “breathe a sigh of relief.” Tesla’s stock fell more than 6% after the unveiling.

But in the following days, CEO Elon Musk announced “orders” for the Cybertruck had reached 250,000. Impressive, non?

Well, that depends on how you define an “order.” Musk was actually citing fully refundable $100 deposits, or 0.25% of the cost of even the cheapest Cybertruck. According to Edmunds, the average down payment for an auto loan is now 11.7%—so $4,670 for an entry-level Cybertruck. The low commitment raises questions about how many of those will turn into actual sales when production starts in late 2021. But the short-term PR boost was real. Tesla’s stock had recovered most of its post-Cybertruck nosedive within a few weeks.”

Retiring Responsibly

January 6, 2020

“Bit by Bit, Socially Conscious Investors Are Influencing 401(k)’s

So-called E.S.G. funds still make up a small fraction of these workplace retirement plans, but they are gaining ground.

By Sept. 27, 2019

Peter Rothstein has a job with a social purpose: expanding the clean energy industry in the northeastern United States as a way to mitigate climate change. Soon, he will be able to support that mission when he saves for retirement.

In November, the Boston-based Northeast Clean Energy Council, where Mr. Rothstein is president, will revise its 401(k) plan investment offerings to include mutual funds promoting those sustainability goals. The revamped plan will include a target date fund series that screens for environmental, social and governance factors — so-called E.S.G. investing. The council, a nonprofit business alliance of 250 companies, will continue to offer traditional choices such as total-market index funds, but the E.S.G. option, Natixis Sustainable Future funds, will be the default investment choice for Mr. Rothstein’s staff of about a dozen employees.

Mr. Rothstein views the shift as a natural evolution. “We have the expertise to understand that these new business models have the potential to be climate solutions and to grow the economy at the same time,” he said. “With that perspective, it makes sense for us to incorporate E.S.G. investing for our retirement plan.”

The idea of investing with a social purpose is gaining ground. The broad category of sustainable and responsible investing grew 38 percent in the United States from 2016 to the start of 2018, to $12 trillion in assets under management, according to the US SIF Foundation. That represented one out of every four dollars of the $46.6 trillion under management, the group noted. A wide range of investments were held, including mutual funds, annuities, E.T.F.s and closed-end funds.  Morningstar reported that 2018 marked the third consecutive year of record flows into sustainable funds; the number of sustainable funds also jumped nearly 50 percent.”

What is an (not so secret) Agent?

January 6, 2020

VIA Investopedia  Full Article

What Is an Agent?

An agent, in legal terminology, is a person who has been legally empowered to act on behalf of another person or an entity. An agent may be employed to represent a client in negotiations and other dealings with third parties. The agent may be given decision-making authority.

An agent may be authorized to represent a client in negotiations and other dealings with third parties or may have decision-making authority.Two common types of agents are attorneys, who represent their clients in legal matters, and stockbrokers, who are hired by investors to make investment decisions for them.

  • An agent is authorized to act on behalf of another person.
  • People hire agents to perform tasks which they lack the time or expertise to do for themselves.
  • A universal agent has wide authority to act on another’s behalf, but a general agent or special agent has more limited and specific powers.

The person represented by the agent in these scenarios is called the principal. In finance, it refers to a fiduciary relationship, in which an agent is authorized to perform transactions on behalf of the client.

Types of Agents

Legally, there are three classes of agents:

  • Universal agents have a broad mandate to act on behalf of their clients. Often these agents have been given power of attorney for a client, which gives them considerable authority to represent a client in legal proceedings. They may also be authorized to make financial transactions on behalf of their clients.
  • General agents are contracted to represent their clients in specific types of transactions or proceedings over a set period. They have broad authority to act but in a limited sphere. A talent agent for an actor would fall under this category.
  • Special agents are authorized to make a single transaction or a series of transactions within a limited period. This is the type of agent most people use from time to time. A real estate agent, securities agent, insurance agent, and a travel agent are all special agents.

People hire agents to perform tasks that they lack the time or expertise to do for themselves. Investors hire stockbrokers to act as middlemen between them and the stock market. Athletes and actors hire agents to negotiate contracts on their behalf because the agents are typically more familiar with industry norms and have a better idea of how to position their clients. More commonly, prospective homeowners use agents as middlemen, relying on the professional’s greater skills at negotiation.

Businesses often hire agents to represent them in a particular venture or negotiation, relying on the agents’ superior skills, contacts, or background information to complete deals.

Special Considerations

There also is the agency by necessity, in which an agent is appointed to act on behalf of a client who is physically or mentally incapable of making a decision. This is not always a case of incapacitation. Business owners, for example, might designate agents to handle unexpected issues that occur in their absence.”

Brexit uncertainty is dead; long live Brexit uncertainty.

January 6, 2020

Via Fortune  Article

“Good morning. David Meyer here in Berlin, filling in for Alan.

Brexit uncertainty is dead; long live Brexit uncertainty.

Last week’s U.K. election result thoroughly killed off any hope Remainers might have had about Brexit being cancelled. Conservative Prime Minister and arch-Brexiteer Boris Johnson won a huge parliamentary majority and can therefore do pretty much whatever he likes. There will be no second referendum. Brexit is happening at the end of January.

However, this does not mean businesses now know what will happen next.

After the U.K. formally leaves the EU, the two sides will use an 11-month transition period to negotiate their subsequent trading relationship, which is due to take effect at the start of 2021. As the European Parliament and the parliaments of all 27 remaining EU countries would need to ratify any trade deal, the timescale becomes even more compressed.

Comprehensive trade deals generally take at least several years to write and ratify. But, according to multiple reports this morning, Johnson will outlaw any potential extension of the transition period beyond the end of 2020. He promised during the campaign that there would be no extension, but putting that into law removes any option for future flexibility.

Given the extremely short timetable for negotiations, the U.K. and EU will at best achieve only a bare-bones trading agreement, meaning disruption for businesses whose activities aren’t fully covered by the terms. In the worst-case scenario, there won’t be any trade deal at all, creating the same catastrophic result as we would have seen if the U.K. crashed out of the EU without a Brexit withdrawal deal.

These are the two options—without an extension to the transition period, there is no time in which to agree a robust, comprehensive trading relationship. No surprise then that the pound greeted the no-extension news by losing most of the gains it made on the Conservatives’ crushing victory.

Johnson is probably using the continued threat of “no deal” as a tool of brinksmanship—a tactic that helped him secure a fresh Brexit withdrawal agreement when most observers, me included, thought that was impossible. However, the EU’s negotiators will not enter these negotiations in a compromising mood. There is no longer any possibility of the U.K. staying in the club, so the gloves will come off.

Whatever happens, industry faces a lot of disruption. And it doesn’t even have the luxury of knowing how much, or what kind. The only certainty is that the cliff edge is a year away.”

This office taboo

December 30, 2019

Via marketwatch.com  Article

45% of workers break this office taboo to boost their salary

“An increasing number of workers are devoting time to salary research, a new survey shows, but just half feel they’re paid enough.

And 54% of workers (61% of men and 49% of women) say they swap salary information with coworkers, with workers aged 18 to 34 far more likely than their older counterparts to do so, according to the survey released Wednesday by the global staffing firm Robert Half.

What’s more, 45% of those surveyed said they have used this information to their advantage. Twenty-eight percent of employees have leveraged that intel to ask for a pay raise, according to the survey, while 17% have used it during job-offer negotiations.

Some 46% of workers feel they’re underpaid, the survey added, including 50% of women and 41% of men. (Women make an average of 80 cents on a man’s dollar; women of color often make even less.) Another 47% think they receive fair pay, while 7% feel overpaid. A potential factor in some workers’ dissatisfaction: More employees are doing the legwork to see if they’re being paid their worth.

While about eight in 10 workers feel they know what they’re worth, 73% (80% of men and 65% of women) report having compared their salaries to market rates over the past year, a nearly 20-point increase from respondents surveyed two years earlier.

Using an outside research firm, Robert Half surveyed more than 1,000 office workers across the U.S. and 2,800 office workers in 28 major American cities.

The U.S. median household income in 2017 was $61,372, the Census Bureau announced last September, a 1.8% increase from the previous year. Meanwhile, millennials’ (aged 22 to 37) median household income in 2017 was $69,000, according to a Pew Research Center analysis. The unemployment rate currently sits at 3.7%, a nearly 50-year low.

‘Workers have more access to information about their salaries, roles and career options than ever before, arming them for conversations with current and potential employers,’ Robert Half senior executive director Paul McDonald said in a statement. ‘In a stronger economy, top performers have options, but they’re more likely to stay put if they feel they’re getting paid fairly.'”

Who is your master?

December 30, 2019

By Todd Ordal via cobizmag.com  Article

As CEO, Who Is Your Master?

“Milton Friedman says a company’s sole obligation was to serve shareholders. A group of CEOs of the largest organizations in America recently took issue with that and said companies must consider all stakeholders. Purpose and profit must both be served.

I’m a fan of Friedman’s and still believe that the company’s primary (not sole) obligation is to serve shareholders. I also believe that how a firm goes about its business is critical. Treating employees with respect, vendors as partners and customers with love is the best way to run an organization for the long-term success of the enterprise and its shareholders. (To hell with the day traders. They’re just gamblers.)

Boxed in by what’s legal and what’s ethical, companies should serve shareholders, but a company is not the proper vehicle to solve all society’s ills. Expecting them to do so is foolish. Capitalism has solved many more problems than it has created but trying to stretch the concept of a corporation too far will deny it success and lead to lost jobs and disgusted shareholders. I don’t know what’s in your retirement account, but if the firms I’m invested in suddenly decided to take all their assets and try to solve the water problem in India, I’d have an issue with that. …

Here’s my counsel: Take great care of your people, customers and environment as you try to maximize shareholder value over the long term. The rub is that you’ll have some conflicts to moderate. … Employees’ desires sometimes conflict with those of customers as well as your right to make a return on your capital. Customers would rather have your products for free. Your manufacturing is likely not zero impact on the environment. So use common sense, be ethical and think long term. You won’t always get it right, but you should damn well try.”

Smart investing on a small budget

December 30, 2019

By   via investopedia.com  Article

  • Set aside a certain amount to save regularly
  • Look into savings apps that round up your purchases and save the small change.
  • First, pay off high-interest debts.
  • Take advantage of retirement plans.
  • Focus on low-fee options, at every investment level.
  • Think about the level of risk you are comfortable with, and how that changes over time.
  • Trade up to better choices as your investment pot grows.”