Juggling Dynamite

As President Trump unapologetically explains that America has no choice but to stay friendly with a brutal regime like Saudi Arabia to maintain access to its oil, some Americans, like Elon Musk, are working tirelessly to innovate a future away from fossil fuels.  And receiving a good deal of flack and disdain for doing so.  Thankfully, some who understand the magnitude of his efforts are speaking out in Musk’s support.  Unlike social media companies, Musk’s vision is not about getting ‘likes’ it’s bout evolving human life for a sustainable future.  Big change that threatens the status quo has always been unpopular.

Astrophysicist Neil deGrasse Tyson says Elon Musk will have the biggest influence on society in the long run.  Here is a direct video link.

Neil deGrasse Tyson: Why Elon Musk is more important than Jeff Bezos, Mark Zuckerberg and Steve Jobs from CNBC.

Very important and little-discussed issues are covered in this segment about Tepper’s new book. Anti-trust breakups are coming for monopolies in many sectors, along with new regulations banning or greatly restricting share buybacks as the destructive market manipulation and balance sheet degradation that it is.  A brighter future requires more competitive policies that support the building of strong balance sheets and sustainable business models, not short-term financial gimmicks.

Jonathan Tepper is the author of ‘The Myth of Capitalism,’ about how a handful of powerful companies have come to dominate key industries and many of our lives. He joins @JChatterleyCNN on @FirstMove to argue the case for more competition and free markets. pic.twitter.com/WwLm47Nh8C

— CNN Business (@CNNBusiness) November 19, 2018

On a related note, private equity firms KKR, and Bain Capital have agreed to pay $20m to workers who lost their jobs in the Toys R Us bankruptcy. The move follows a months-long campaign in which former employees pressured some of America’s largest state pension funds to cut off investment in firms connected to the doomed buyout of the retailer.

This is a positive development because it connects the parasitical behaviours of financiers that pick a business clean of cash and income and bury it in debt to fund payouts to shareholders at the expense of a company’s long-term viability and pension obligations to employees.  As with Sears and many other companies, extractive financial gimmicks are the death knell for productive investment, economic strength and social stability.

As cryptocurrencies continue to tank, this cycle’s most deliriously valued ‘FAANG” stocks also took another big whack today, as shown here courtesy of CNBC.

Not surprisingly, as shown below, these much-loved and widely owned names have, so far, fallen more than 20% from their recent 52-week highs.  If past mania cycles are prologue, these stocks might be halfway through their eventual decline, as die-hard fans buy dips all the way down, before abandoning them in horror near cycle lows.

Those of us who have learned through decades of real-life investment cycles to adhere to a value discipline have been out of favour longer-than-average this time, and it has been tedious for some to wait.  But as I wrote here last year Value’s long winter will end in spring again–bank on it.   Great opportunity is coming, and it is very exciting to anticipate.