Juggling Dynamite

Danielle was a guest today with Jim Goddard on Talk Digital Network talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

With President Donald Trump threatening to pull out of the Paris Climate Agreement and choosing climate denier, Scott Pruitt to head the Environmental Protection Agency, environmentalists are pressing action on a State and local level. This week the Maryland State House of Representatives overrode Republican Governor Larry Hogan’s veto of The Clean Energy Jobs Act. The Maryland Senate is expected to follow suit and take up the override tomorrow, which would put the law into effect. The 2016 bill would ensure that Maryland will get 25% of its electricity from renewables by 2020.  Here is a direct video link.

Mike Tidwell is the founder and the director of the Chesapeake Climate Action Network, a grassroots non-profit, dedicated to raising awareness about the impacts and solutions associated with global warming in Maryland, Virginia and DC. Tidwell is also an author and a filmmaker whose books include: “The Ravaging Tide: Strange Weather, Future Katrinas and The Death of America’s Costal Cities.”

Technological advancement is coming fast and furious today, especially in the areas of energy and transportation.  This is exciting but it will also require a lot of capital investment to make these transitions.  That means less corporate profits and excess cash for non-productive rents like share buybacks and dividends.  More reasons not to pay today’s extreme multiples for share ownership.  See:  Daimler spends big to compete with Tesla:

Management expects revenue and profit to increase again this year, thanks to ongoing growth in China and Europe, a recovery in other emerging markets and a fresh model lineup. Crucially, though, the German industrial giant isn’t counting on growth in the free cash flows that fund its big dividends.

The key reason: heavy investment in future technologies, namely electric powertrains, self-driving features, web-connected cars and the smartphone-enabled car-hailing or carpooling services pioneered by Uber. Last year Daimler’s investments, including spending on plants and equipment and research and development, totaled €13.5 billion ($14.56 billion)—8.8% of sales and 16% ahead of the 2015 level. This year spending is expected to rise a further 13% to €15.2 billion, and stay at that level in 2018.