AYA Analytica financial health memo May 2019
As of May 2019, this regular podcast is available on our Andy Yeh Alpha fintech network platform.
Berkeley public economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits.
French author and economist Thomas Piketty contends that there is an innate tendency toward wealth concentration in market economies where the nominal interest rate on capital investments exceeds the economic growth rate.
Former IMF chief economist Olivier Blanchard argues that the real interest rate on risk-free government bonds must be less than the economic growth rate for most market economies to carry greater public debt with low inflation.
Blanchard focuses on the real interest rate on low-risk government bonds, whereas, Piketty focuses on the nominal return on risky capital investments.
These interest rates diverge by a 5%-6% equity risk premium, which reflects how risk-averse the typical stock market investor is through the real business cycle.
For Piketty, high wealth concentration can result from a large equity risk premium that calls for higher taxes on the rich.
For Blanchard, the government can accumulate more public debt as core CPI inflation remains moderate over time.
On balance, Eichengreen supports greater fiscal deficit finance for health care, R&D, infrastructure, and social security etc as both prices and asset premiums stabilize in recent times.
Chicago finance professor Raghuram Rajan suggests that free markets need populist support against an unholy alliance of private-sector and state elites.
When a few corporations dominate the U.S. economy, this oligopoly inevitably teams up with the primary instruments of state control for greater rent protection, political clout, and economic power concentration.
Regulatory efforts must strike a delicate balance between legitimate antitrust scrutiny and capitalist productivity.
In the modern era of global supply chains, U.S. corporations benefit from enormous economies of scale and scope, network effects, and real-time data analytics for continual efficiency gains and performance improvements.
For instance, Amazon uses fast algorithms to learn from its internal real-time data to optimize delivery times, retail prices, and customer services; Facebook and Google applies artificial intelligence to optimize the dual-platform experiences of both web users and advertisers; Apple monopolizes iOS app usage on its proprietary App Store online marketplace.
These oligopolies often leverage their market power to charge higher mark-ups to the detriment of active users worldwide.
Despite these anticompetitive practices, the right regulatory response requires rebalancing the current oligopolistic industries to ensure meaningful competition.
American capitalism needs bottom-up populist reforms and democratic communities to preserve trust in the vibrant market economy.
MIT chair professor and author Daron Acemoglu suggests that economic prosperity comes from high-wage job creation.
Progressive tax redistribution cannot achieve the same economic gains that would result from greater high-skill employment.
The government should promote better technological advances and labor market institutions to empower workers through higher education systems.
Also, the government should encourage firms to deploy better technology to enhance wage growth and labor productivity.
The government can increase product market competition such that firms cannot charge monopoly prices without hiring more workers.
Meanwhile, the current institutional architecture depresses U.S. private-sector wage growth (2.5% per annum from 1947 to 2000 and almost nil thereafter).
In this negative light, the government should raise the tax-revenue-to-GDP ratio from 27% to the 35% OECD benchmark.
The incremental fiscal intake can help ensure higher wages for tech-savvy high-skill workers.
Moreover, the government needs to set clear rules with respect to tech market power, privacy, and content curation.
Recent examples include the E.U. fines on Google for Internet search market dominance, Facebook-Cambridge-Analytica data breach, and Amazon user surveillance through Alexa-and-Echo artificial intelligence.
These rules may entail plausible penalties on foreign interference in U.S. elections, privacy invasion, and the viral distribution of inappropriate content.
A Harvard MBA graduate Camilo Maldonado shares several life lessons and wise insights into personal finance.
People can leverage stock market investments and 401(k) and other individual retirement accounts to optimize their net worth and wealth accumulation.
Living within our means is a major strength in the long run.
It would be even better for us to live below our means with frugal habits.
Instead of overspending on high rent and overhead expenses, we should save enough to invest in blue-chip stocks with reasonable cash dividends and long-term capital gains.
Moreover, tax-sensitive investors should maintain a multi-year time horizon for wise stock investment decisions.
In this fashion, long-term stock investors can exponentially compound multiple streams of passive income over many years.
For instance, if the investor saves $100,000 to buy stocks with 11% average equity market return performance over 30 years, the terminal wealth accumulation amounts to almost 23 times the initial outlay (i.e. $2.29 million in total).
It is important for us to learn the fact that we cannot buy happiness sooner rather than later.
On balance, we should invest patiently in our skill sets and money matters by learning to delay immediate gratification over time.
Patience pays well.
The May administration needs to seek a fresh fallback option for Halloween Brexit.
After the House of Commons rejects Brexit proposals from the May administration at least 3 times, the E.U. agrees to the subsequent May request of a long extension of Brexit to late-October 2019.
The Brexit bill or withdrawal agreement may involve a gross amount of €100 billion.
Net of some U.K. assets, the final bill would involve about €55 billion to €75 billion.
The withdrawal transfer funds can contribute to better British health care, social welfare, infrastructure, taxation, and other aspects of public finance.
In the Brexit referendum, supportive sentiments arise from a variety of socioeconomic factors such as the European sovereign debt crisis, immigration, terrorism, and E.U. bureaucracy etc.
Also, Brits primarily use the British pound, so the U.K. has never been part of the E.U. monetary union.
However, Brexit may inevitably be detrimental to cross-border trade for the U.K. because the Eurozone remains and represents the primary trade bloc to the country.
As the European Union affirms a long extension to Halloween Brexit, the British prime minister Theresa May either gives up her public governance role or seeks a fresh fallback option in the meantime.
Brent crude oil prices spike to $70-$75 per barrel after the Trump administration proposes to stop waiving economic sanctions on Iranian oil exports.
State Secretary Mike Pompeo announces that the U.S. no longer grants these waivers to China, India, Japan, South Korea, and Turkey etc as of early-May 2019.
This strategic move threatens to wipe off about $1 million barrels of international crude oil per day.
In response, oil prices surge to their highest levels since November 2018.
Middle East countries such as Saudi Arabia and United Arab Emirates agree to make up for lost oil supply from Iran.
Oil price gyrations are likely to continue in 2019-2020, and crude oil futures now forecast the upper range of $80-$95 per barrel.
High oil prices can translate into higher profit margins for most OPEC countries, especially Saudi Arabia and United Arab Emirates.
Moreover, the upward oil price trend improves the economic prospects of Saudi Aramco in the next biggest IPO lock-up period.
In the grand scheme, the U.S. national security strategists trade off temporary oil price fluctuations with more draconian economic sanctions on the nuclear nation Iran.
This containment strategy helps successfully isolate Iran to the detriment of oil-dependent economies worldwide.
The Trump administration still expects to reach a landmark Sino-U.S. trade agreement with a clear mechanism for better intellectual property protection and enforcement.
President Trump emphasizes that there is no need for America to rush to reach a major trade deal with China.
Also, there is no need for stock market investors to overreact to the recent Sino-U.S. trade war headlines.
The Trump tariff hikes represent punitive penalties on the Chinese attempt to backtrack on prior mutual trade commitments.
In response to the Trump tariffs, the Chinese Xi administration promises retaliation with necessary countermeasures.
As Reuters reports in recent times, China retracts key trade elements across all 7 chapters of the 150-page draft agreement and then rolls back promises to change Chinese rules to allay U.S. concerns with respect to intellectual property theft, arbitrary tech transfer, and currency manipulation etc.
The Chinese Xi administration cannot yield to U.S. maximum pressure on matters of principle.
As the Chinese trade delegates suggest, the bilateral trade procurement figures should be realistic, and both sides should balance the substantive text of a major trade deal.
Moreover, the Chinese trade negotiators emphasize that this delicate balance should uphold the sovereignty and dignity of the country.
President Trump ramps up 25% tariffs on $200 billion Chinese imports soon after China backtracks on the fair trade agreement.
U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin both express frustration that China attempts to renege on prior commitments to the bilateral resolution of perennial issues from Sino-U.S. trade deficit balance and currency manipulation to intellectual property theft and arbitrary technology transfer.
President Trump warns that he may impose 25% tariffs on another $325 billion Chinese imports if both sides cannot agree on a major trade deal in the next few weeks.
As the Sino-American top trade negotiators continue to engage in bilateral discussions, stock market investors face dark clouds of uncertainty around whether both sides can salvage a fair trade deal.
Most major stock market indices from S&P 500, Dow Jones, and Nasdaq to Shanghai, Shenzhen, and Hong Kong experience 3.5% to 6.5% hefty losses and plunges in response to the current trade standoff between China and America.
As President Trump accuses China of breaking the trade deal across 7 chapters of the 150-page draft agreement, Chinese Vice Premier Liu He expresses his sincere hope that both sides can resolve contractual differences in the yearlong trade war.
The Trump administration receives a 3.2% first-quarter GDP boost as Fed Chair Jay Powell halts the next interest rate hike in early-2019.
This robust upward economic trajectory far exceeds most stock market expectations and projections of about 2.5% real GDP growth as of 2019Q1.
Also, this favorable rebound puts to rest prior pervasive investor fears of an economic recession.
In fact, this economic momentum arises without fresh inflationary pressure.
As core CPI inflation continues to hover near the 2% target level and the U.S. economy operates with low unemployment near 3.6%, the Federal Reserve remains patient on the next interest rate adjustment after mid-2019.
In the current economic scenario, there is no clear trade-off between inflation and unemployment as the New Keynesian Phillips Curve (NKPC) may suggest.
The Phillips curve seems to substantially flatten in recent times, so the U.S. economy operates near full employment with low inflation.
This economic outlook bolsters the Federal Reserve dual mandate of maximum sustainable employment and price stability.
Meanwhile, the greenback depreciates a little bit for U.S. export prices to remain competitive in the global economic landscape.
These recent positive events contribute much to the Trump economic scorecard for his presidential re-election in 2020.
Former Vice President Joe Biden enters the next U.S. presidential race with many moderate-to-progressive policy proposals.
At the age of 76, Biden stands out the presidential race as the favorite among Democratic voters in most recent polls.
Biden enters the fray with a half-century of experience in U.S. government with senior roles as the former chairman of Senate Foreign Relations Committee and vice president under President Barack Obama.
On public finance, Biden cites high health care and energy costs as the major threats to the economic prosperity of American businesses.
Addressing these economic issues helps U.S. businesses better compete worldwide.
Biden supports better balancing the fiscal budget with reasonable deficit reductions.
This fiscal policy stance contrasts with massive tax cuts under the Trump administration.
Biden indicates the essential need for U.S. banks to operate under the 5 major pillars of financial regulation: capital adequacy rules, leverage limitations, liquidity requirements, macroprudential stress tests, and deposit insurance constraints.
On agriculture, Biden opposes importing non-native species, which inadvertently alter vegetation, compete with native species, introduce new diseases, and interfere with maritime commerce.
Biden supports a $15 minimum wage proposal, higher taxation on investment income, zero tuition for public college students, and broader infrastructure.
Tech unicorns blitzscale business niches for better scale economies from Uber and Lyft to Pinterest, Slack, and Zoom.
LinkedIn co-founder and serial entrepreneur Reid Hoffman explains in his recent book that tech unicorns rapidly scale up core functions to reap network effects despite substantial uncertainty.
These network effects often manifest in the form of freemium users (Dropbox, Facebook, and LinkedIn), cloud services (Amazon and Zoom), and online subscriptions (Apple and Netflix).
About 2 decades ago, the last IPO boom brought to the stock market a boatload of profitless dotcom companies.
Many dotcom companies never had the opportunity to blitzscale their core operations with gargantuan losses.
In accordance with the Hoffman zeitgeist of Silicon Valley, the current IPO game focuses on how tech unicorns become big before substantial economic uncertainty strikes hard.
Beyond the singularity point, these tech unicorns start to worry about net profits and other socioeconomic bottomline metrics.
This competitive strategy works well for tech titans such as Facebook, Amazon, Microsoft, Google, Apple, Nvidia, and Twitter (FAMGANT).
However, this strategy may turn out to be less effective for Airbnb, Uber, Lyft, Netflix, Slack, and Zoom as they experience competitive bottlenecks in lieu of both scale economies and network effects.
Netflix has an unsustainable business model in the meantime.
Netflix maintains a small premium membership fee of $9-$14 per month for its unique collection of TV shows, programs, and movies, whereas, HBO charges $15 per month.
With its original video content, Netflix earns a net profit of 28 cents per subscriber (in comparison to $3.65 for HBO) due to high programming costs and low subscription prices.
As Netflix expands into global video markets, these margins cannot be feasible in the long run.
Netflix relies on vertical integration to generate more original video content with lower programming costs.
As the average Netflix subscriber streams video for about 2 hours per day, this integration allows Netflix to charge higher premiums.
Also, Netflix can run ads on the massive network of almost 150 million subscribers worldwide (60 million U.S. subscribers) as of early-2019.
Ad executive heads from YouTube and JPMC to media agencies such as UM and MediaLink regard running ads as an inevitable route for Netflix.
With $15 billion annual costs and $10 billion debt mountains, Netflix needs to find feasible ways to monetize its user base.
As NYU business valuation professor Aswath Damodaran suggests, Netflix now has an unsustainable business model.
Apple settles its 2-year intellectual property lawsuit with Qualcomm by agreeing to a multi-year patent license with royalty payments to the microchip maker.
As part of this settlement, Apple and Qualcomm need to forego all legal actions worldwide, and the former continues to buy microchips from the latter.
With a $2 increase in its latest EPS in early-2019, Qualcomm experiences a 23% sharp share price boost well above $65, and its market capitalization surges by $14.5 billion to more than $83 billion.
Qualcomm thus enjoys its best share price performance since 1999.
In contrast, Apple experiences a 1% share price decline, and the Qualcomm microchip archrival Intel experiences a moderate share price dip.
During the fiscal year from 2018 to early-2019, Apple employs Intel microchips for the iPhone XS and XR production.
Apple needs to surpass this strenuous patent settlement with Qualcomm to focus on 5G next-generation networks and fresh revolutionary iPhone and iPad functions.
With vital access to both Intel and Qualcomm microchips, Apple can design 5G iPhones sooner than the late-2020 release date that most stock market analysts anticipate.
The surprise settlement represents a pyrrhic victory for Apple as Qualcomm inflicts a hard toll on the smartphone bellwether.
AYA Analytica financial health memo (FHM) blog post and podcast content curation with wise words of wisdom
Through our AYA fintech network platform, we share numerous insightful posts on personal finance, stock investment, and wealth management. Our AYA fintech network platform helps enrich the financial literacy, freedom, and inclusion of the global general public with American focus. We empower stock market investors through education, technology, and social integration.
Tony Robbins suggests that one has to be able to make money during sleep hours in order to reach financial freedom.
https://ayafintech.network/blog/tony-robbins-suggests-that-one-has-to-be-able-to-make-money-during-sleep-hours-in-order-to-reach-financial-freedom
CNBC news anchor Becky Quick interviews Warren Buffett in early-2019.
https://ayafintech.network/blog/cnbc-news-anchor-becky-quick-interviews-warren-buffett-in-early-2019
Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs.
https://ayafintech.network/blog/warren-buffett-places-his-largest-stock-bets-on-apple-american-express-and-goldman-sachs
We may need to reconsider the new rules of personal finance.
https://ayafintech.network/blog/we-may-need-to-reconsider-the-new-rules-of-personal-finance
Americans continue to keep their financial New Year resolutions.
https://ayafintech.network/blog/americans-continue-to-keep-their-financial-new-year-resolutions
American parents often worry about money and upward mobility for their children.
https://ayafintech.network/blog/american-parents-often-worry-about-money-and-upward-mobility-for-their-children
Congresswoman Alexandria Ocasio-Cortez proposes greater public debt finance with minimal tax increases for the Green New Deal.
https://ayafintech.network/blog/congresswoman-alexandria-ocasio-cortez-proposes-greater-public-debt-finance-with-minimal-tax-increases-for-the-green-new-deal
Neoliberal public choice continues to spin national taxation and several other forms of government intervention.
https://ayafintech.network/blog/neoliberal-public-choice-continues-to-spin-national-taxation-and-several-other-forms-of-government-intervention
A physicist derives a mathematical formula for success.
https://ayafintech.network/blog/a-physicist-derives-a-mathematical-formula-for-success
Warren Buffett, shares his key insights into life, success, money, and interpersonal communication.
https://ayafintech.network/blog/warren-buffett-shares-his-key-insights-into-life-success-money-and-interpersonal-communication
Business titans often step away from their urgent work, slow down, and invest in self-enrichment.
https://ayafintech.network/blog/business-titans-often-step-away-from-their-urgent-work-slow-down-and-invest-in-free-activities-for-self-enrichment
Tony Robbins summarizes several personal finance and investment lessons for the typical layperson.
https://ayafintech.network/blog/tony-robbins-summarizes-several-personal-finance-and-investment-lessons-for-the-typical-layperson
This infographic visualization summarizes the key habits and investment styles of highly successful entrepreneurs.
https://ayafintech.network/blog/this-infographic-visualization-summarizes-the-key-habits-and-investment-styles-of-highly-successful-entrepreneurs
Warren Buffett points out that it is important to invest in oneself with better interpersonal communication.
https://ayafintech.network/blog/warren-buffett-points-out-that-it-is-important-to-invest-in-oneself-with-better-interpersonal-communication
It may be illegal for institutional investors to buy-and-hold large equity stakes in a less competitive industry with high market concentration.
https://ayafintech.network/blog/institutional-investors-buy-and-hold-large-equity-stakes-in-a-less-competitive-industry-with-high-market-concentration
Millennials can save to make a fortune with compound interest over 40 years.
https://ayafintech.network/blog/millennials-can-save-to-make-a-fortune-over-40-years
Warren Buffett invests in American stocks across energy, transport, and finance etc.
https://ayafintech.network/blog/warren-buffett-invests-in-american-stocks-across-numerous-industries-such-as-energy-transport-and-finance
These famous quotes of self-made billionaires are inspirational words of wisdom on investment management.
https://ayafintech.network/blog/famous-quotes-of-self-made-billionaires-on-investment-management
Warren Buffett points out that many people misunderstand his stock investment method in several ways.
https://ayafintech.network/blog/warren-buffett-points-out-that-many-people-misunderstand-his-stock-investment-method-in-several-ways
Would you rather receive $1,000 each day for one month or a magic penny that doubles each day over the same month?
https://ayafintech.network/blog/magic-penny-doubles-compound-interest
A small fraction of the population enjoys most capital and wealth creation.
https://ayafintech.network/blog/accumulative-advantage-suggests-that-a-small-fraction-of-the-population-enjoys-most-capital-and-wealth-creation
The U.S. stock market delivers a hefty long-term average return of 11% per annum.
https://ayafintech.network/blog/american-stock-market-has-delivered-a-hefty-11%25-long-run-average-return-per-annum
Tony Robbins recommends portfolio optimization only once a year.
https://ayafintech.network/blog/tony-robbins-recommends-portfolio-optimization-only-once-a-year
Tony Robbins explains in his latest book on personal finance that *patience* is the top secret.
https://ayafintech.network/blog/tony-robbins-explains-that-patience-is-the-top-secret-to-successful-investment-management
Thomas Piketty frames economic inequality as a global phenomenon.
https://ayafintech.network/blog/thomas-piketty-frames-economic-inequality-as-a-global-phenomenon
Rakesh Jhunjhunwala is India's equivalent to Warren Buffett in America.
https://ayafintech.network/blog/india-equivalent-to-warren-buffettrakesh-jhunjhunwala-is-indias-equivalent-to-warren-buffett-in-america
We can learn much from the frugal habits and lifestyles of several billionaires.
https://ayafintech.network/blog/we-can-learn-much-from-the-frugal-habits-and-lifestyles-of-several-billionaires
AYA Analytica is our online regular podcast and newsletter about key financial news, market insights, economic issues, and stock investment strategies on our Andy Yeh Alpha (AYA) fintech network platform. With both American focus and international reach, our primary and ultimate corporate mission aims to help enhance financial literacy, inclusion, and freedom of the open and diverse global general public. We apply our unique dynamic conditional alpha investment model as the first aid for every investor with profitable asset investment signals and portfolio strategies. In fact, our AYA freemium fintech network platform curates, orchestrates, and provides proprietary software technology and algorithmic cloud service to most members who can interact with one another on our AYA fintech network platform. Multiple blogs, posts, ebooks, analytical reports, stock alpha signals, and asset omega estimates offer proprietary solutions and substantive benefits to empower each financial market investor through technology, education, and social integration. Please feel free to sign up or login to enjoy our new and unique cloud software services on AYA fintech network platform now!!
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Andy Yeh Alpha (AYA) fintech network platform serves as each investor's social toolkit for profitable investment management. AYA fintech network platform helps promote better financial literacy, inclusion, and freedom of the global general public. We empower investors through technology, education, and social integration.
Andy Yeh
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Brass Ring International Density Enterprise (BRIDE)
Berkeley public economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits.
French author and economist Thomas Piketty contends that there is an innate tendency toward wealth concentration in market economies where the nominal interest rate on capital investments exceeds the economic growth rate.
Former IMF chief economist Olivier Blanchard argues that the real interest rate on risk-free government bonds must be less than the economic growth rate for most market economies to carry greater public debt with low inflation.
Blanchard focuses on the real interest rate on low-risk government bonds, whereas, Piketty focuses on the nominal return on risky capital investments.
These interest rates diverge by a 5%-6% equity risk premium, which reflects how risk-averse the typical stock market investor is through the real business cycle.
For Piketty, high wealth concentration can result from a large equity risk premium that calls for higher taxes on the rich.
For Blanchard, the government can accumulate more public debt as core CPI inflation remains moderate over time.
On balance, Eichengreen supports greater fiscal deficit finance for health care, R&D, infrastructure, and social security etc as both prices and asset premiums stabilize in recent times.
Chicago finance professor Raghuram Rajan suggests that free markets need populist support against an unholy alliance of private-sector and state elites.
When a few corporations dominate the U.S. economy, this oligopoly inevitably teams up with the primary instruments of state control for greater rent protection, political clout, and economic power concentration.
Regulatory efforts must strike a delicate balance between legitimate antitrust scrutiny and capitalist productivity.
In the modern era of global supply chains, U.S. corporations benefit from enormous economies of scale and scope, network effects, and real-time data analytics for continual efficiency gains and performance improvements.
For instance, Amazon uses fast algorithms to learn from its internal real-time data to optimize delivery times, retail prices, and customer services; Facebook and Google applies artificial intelligence to optimize the dual-platform experiences of both web users and advertisers; Apple monopolizes iOS app usage on its proprietary App Store online marketplace.
These oligopolies often leverage their market power to charge higher mark-ups to the detriment of active users worldwide.
Despite these anticompetitive practices, the right regulatory response requires rebalancing the current oligopolistic industries to ensure meaningful competition.
American capitalism needs bottom-up populist reforms and democratic communities to preserve trust in the vibrant market economy.
MIT chair professor and author Daron Acemoglu suggests that economic prosperity comes from high-wage job creation.
Progressive tax redistribution cannot achieve the same economic gains that would result from greater high-skill employment.
The government should promote better technological advances and labor market institutions to empower workers through higher education systems.
Also, the government should encourage firms to deploy better technology to enhance wage growth and labor productivity.
The government can increase product market competition such that firms cannot charge monopoly prices without hiring more workers.
Meanwhile, the current institutional architecture depresses U.S. private-sector wage growth (2.5% per annum from 1947 to 2000 and almost nil thereafter).
In this negative light, the government should raise the tax-revenue-to-GDP ratio from 27% to the 35% OECD benchmark.
The incremental fiscal intake can help ensure higher wages for tech-savvy high-skill workers.
Moreover, the government needs to set clear rules with respect to tech market power, privacy, and content curation.
Recent examples include the E.U. fines on Google for Internet search market dominance, Facebook-Cambridge-Analytica data breach, and Amazon user surveillance through Alexa-and-Echo artificial intelligence.
These rules may entail plausible penalties on foreign interference in U.S. elections, privacy invasion, and the viral distribution of inappropriate content.
A Harvard MBA graduate Camilo Maldonado shares several life lessons and wise insights into personal finance.
People can leverage stock market investments and 401(k) and other individual retirement accounts to optimize their net worth and wealth accumulation.
Living within our means is a major strength in the long run.
It would be even better for us to live below our means with frugal habits.
Instead of overspending on high rent and overhead expenses, we should save enough to invest in blue-chip stocks with reasonable cash dividends and long-term capital gains.
Moreover, tax-sensitive investors should maintain a multi-year time horizon for wise stock investment decisions.
In this fashion, long-term stock investors can exponentially compound multiple streams of passive income over many years.
For instance, if the investor saves $100,000 to buy stocks with 11% average equity market return performance over 30 years, the terminal wealth accumulation amounts to almost 23 times the initial outlay (i.e. $2.29 million in total).
It is important for us to learn the fact that we cannot buy happiness sooner rather than later.
On balance, we should invest patiently in our skill sets and money matters by learning to delay immediate gratification over time.
Patience pays well.
The May administration needs to seek a fresh fallback option for Halloween Brexit.
After the House of Commons rejects Brexit proposals from the May administration at least 3 times, the E.U. agrees to the subsequent May request of a long extension of Brexit to late-October 2019.
The Brexit bill or withdrawal agreement may involve a gross amount of €100 billion.
Net of some U.K. assets, the final bill would involve about €55 billion to €75 billion.
The withdrawal transfer funds can contribute to better British health care, social welfare, infrastructure, taxation, and other aspects of public finance.
In the Brexit referendum, supportive sentiments arise from a variety of socioeconomic factors such as the European sovereign debt crisis, immigration, terrorism, and E.U. bureaucracy etc.
Also, Brits primarily use the British pound, so the U.K. has never been part of the E.U. monetary union.
However, Brexit may inevitably be detrimental to cross-border trade for the U.K. because the Eurozone remains and represents the primary trade bloc to the country.
As the European Union affirms a long extension to Halloween Brexit, the British prime minister Theresa May either gives up her public governance role or seeks a fresh fallback option in the meantime.
Brent crude oil prices spike to $70-$75 per barrel after the Trump administration proposes to stop waiving economic sanctions on Iranian oil exports.
State Secretary Mike Pompeo announces that the U.S. no longer grants these waivers to China, India, Japan, South Korea, and Turkey etc as of early-May 2019.
This strategic move threatens to wipe off about $1 million barrels of international crude oil per day.
In response, oil prices surge to their highest levels since November 2018.
Middle East countries such as Saudi Arabia and United Arab Emirates agree to make up for lost oil supply from Iran.
Oil price gyrations are likely to continue in 2019-2020, and crude oil futures now forecast the upper range of $80-$95 per barrel.
High oil prices can translate into higher profit margins for most OPEC countries, especially Saudi Arabia and United Arab Emirates.
Moreover, the upward oil price trend improves the economic prospects of Saudi Aramco in the next biggest IPO lock-up period.
In the grand scheme, the U.S. national security strategists trade off temporary oil price fluctuations with more draconian economic sanctions on the nuclear nation Iran.
This containment strategy helps successfully isolate Iran to the detriment of oil-dependent economies worldwide.
The Trump administration still expects to reach a landmark Sino-U.S. trade agreement with a clear mechanism for better intellectual property protection and enforcement.
President Trump emphasizes that there is no need for America to rush to reach a major trade deal with China.
Also, there is no need for stock market investors to overreact to the recent Sino-U.S. trade war headlines.
The Trump tariff hikes represent punitive penalties on the Chinese attempt to backtrack on prior mutual trade commitments.
In response to the Trump tariffs, the Chinese Xi administration promises retaliation with necessary countermeasures.
As Reuters reports in recent times, China retracts key trade elements across all 7 chapters of the 150-page draft agreement and then rolls back promises to change Chinese rules to allay U.S. concerns with respect to intellectual property theft, arbitrary tech transfer, and currency manipulation etc.
The Chinese Xi administration cannot yield to U.S. maximum pressure on matters of principle.
As the Chinese trade delegates suggest, the bilateral trade procurement figures should be realistic, and both sides should balance the substantive text of a major trade deal.
Moreover, the Chinese trade negotiators emphasize that this delicate balance should uphold the sovereignty and dignity of the country.
President Trump ramps up 25% tariffs on $200 billion Chinese imports soon after China backtracks on the fair trade agreement.
U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin both express frustration that China attempts to renege on prior commitments to the bilateral resolution of perennial issues from Sino-U.S. trade deficit balance and currency manipulation to intellectual property theft and arbitrary technology transfer.
President Trump warns that he may impose 25% tariffs on another $325 billion Chinese imports if both sides cannot agree on a major trade deal in the next few weeks.
As the Sino-American top trade negotiators continue to engage in bilateral discussions, stock market investors face dark clouds of uncertainty around whether both sides can salvage a fair trade deal.
Most major stock market indices from S&P 500, Dow Jones, and Nasdaq to Shanghai, Shenzhen, and Hong Kong experience 3.5% to 6.5% hefty losses and plunges in response to the current trade standoff between China and America.
As President Trump accuses China of breaking the trade deal across 7 chapters of the 150-page draft agreement, Chinese Vice Premier Liu He expresses his sincere hope that both sides can resolve contractual differences in the yearlong trade war.
The Trump administration receives a 3.2% first-quarter GDP boost as Fed Chair Jay Powell halts the next interest rate hike in early-2019.
This robust upward economic trajectory far exceeds most stock market expectations and projections of about 2.5% real GDP growth as of 2019Q1.
Also, this favorable rebound puts to rest prior pervasive investor fears of an economic recession.
In fact, this economic momentum arises without fresh inflationary pressure.
As core CPI inflation continues to hover near the 2% target level and the U.S. economy operates with low unemployment near 3.6%, the Federal Reserve remains patient on the next interest rate adjustment after mid-2019.
In the current economic scenario, there is no clear trade-off between inflation and unemployment as the New Keynesian Phillips Curve (NKPC) may suggest.
The Phillips curve seems to substantially flatten in recent times, so the U.S. economy operates near full employment with low inflation.
This economic outlook bolsters the Federal Reserve dual mandate of maximum sustainable employment and price stability.
Meanwhile, the greenback depreciates a little bit for U.S. export prices to remain competitive in the global economic landscape.
These recent positive events contribute much to the Trump economic scorecard for his presidential re-election in 2020.
Former Vice President Joe Biden enters the next U.S. presidential race with many moderate-to-progressive policy proposals.
At the age of 76, Biden stands out the presidential race as the favorite among Democratic voters in most recent polls.
Biden enters the fray with a half-century of experience in U.S. government with senior roles as the former chairman of Senate Foreign Relations Committee and vice president under President Barack Obama.
On public finance, Biden cites high health care and energy costs as the major threats to the economic prosperity of American businesses.
Addressing these economic issues helps U.S. businesses better compete worldwide.
Biden supports better balancing the fiscal budget with reasonable deficit reductions.
This fiscal policy stance contrasts with massive tax cuts under the Trump administration.
Biden indicates the essential need for U.S. banks to operate under the 5 major pillars of financial regulation: capital adequacy rules, leverage limitations, liquidity requirements, macroprudential stress tests, and deposit insurance constraints.
On agriculture, Biden opposes importing non-native species, which inadvertently alter vegetation, compete with native species, introduce new diseases, and interfere with maritime commerce.
Biden supports a $15 minimum wage proposal, higher taxation on investment income, zero tuition for public college students, and broader infrastructure.
Tech unicorns blitzscale business niches for better scale economies from Uber and Lyft to Pinterest, Slack, and Zoom.
LinkedIn co-founder and serial entrepreneur Reid Hoffman explains in his recent book that tech unicorns rapidly scale up core functions to reap network effects despite substantial uncertainty.
These network effects often manifest in the form of freemium users (Dropbox, Facebook, and LinkedIn), cloud services (Amazon and Zoom), and online subscriptions (Apple and Netflix).
About 2 decades ago, the last IPO boom brought to the stock market a boatload of profitless dotcom companies.
Many dotcom companies never had the opportunity to blitzscale their core operations with gargantuan losses.
In accordance with the Hoffman zeitgeist of Silicon Valley, the current IPO game focuses on how tech unicorns become big before substantial economic uncertainty strikes hard.
Beyond the singularity point, these tech unicorns start to worry about net profits and other socioeconomic bottomline metrics.
This competitive strategy works well for tech titans such as Facebook, Amazon, Microsoft, Google, Apple, Nvidia, and Twitter (FAMGANT).
However, this strategy may turn out to be less effective for Airbnb, Uber, Lyft, Netflix, Slack, and Zoom as they experience competitive bottlenecks in lieu of both scale economies and network effects.
Netflix has an unsustainable business model in the meantime.
Netflix maintains a small premium membership fee of $9-$14 per month for its unique collection of TV shows, programs, and movies, whereas, HBO charges $15 per month.
With its original video content, Netflix earns a net profit of 28 cents per subscriber (in comparison to $3.65 for HBO) due to high programming costs and low subscription prices.
As Netflix expands into global video markets, these margins cannot be feasible in the long run.
Netflix relies on vertical integration to generate more original video content with lower programming costs.
As the average Netflix subscriber streams video for about 2 hours per day, this integration allows Netflix to charge higher premiums.
Also, Netflix can run ads on the massive network of almost 150 million subscribers worldwide (60 million U.S. subscribers) as of early-2019.
Ad executive heads from YouTube and JPMC to media agencies such as UM and MediaLink regard running ads as an inevitable route for Netflix.
With $15 billion annual costs and $10 billion debt mountains, Netflix needs to find feasible ways to monetize its user base.
As NYU business valuation professor Aswath Damodaran suggests, Netflix now has an unsustainable business model.
Apple settles its 2-year intellectual property lawsuit with Qualcomm by agreeing to a multi-year patent license with royalty payments to the microchip maker.
As part of this settlement, Apple and Qualcomm need to forego all legal actions worldwide, and the former continues to buy microchips from the latter.
With a $2 increase in its latest EPS in early-2019, Qualcomm experiences a 23% sharp share price boost well above $65, and its market capitalization surges by $14.5 billion to more than $83 billion.
Qualcomm thus enjoys its best share price performance since 1999.
In contrast, Apple experiences a 1% share price decline, and the Qualcomm microchip archrival Intel experiences a moderate share price dip.
During the fiscal year from 2018 to early-2019, Apple employs Intel microchips for the iPhone XS and XR production.
Apple needs to surpass this strenuous patent settlement with Qualcomm to focus on 5G next-generation networks and fresh revolutionary iPhone and iPad functions.
With vital access to both Intel and Qualcomm microchips, Apple can design 5G iPhones sooner than the late-2020 release date that most stock market analysts anticipate.
The surprise settlement represents a pyrrhic victory for Apple as Qualcomm inflicts a hard toll on the smartphone bellwether.
AYA Analytica financial health memo (FHM) blog post and podcast content curation with wise words of wisdom
Through our AYA fintech network platform, we share numerous insightful posts on personal finance, stock investment, and wealth management. Our AYA fintech network platform helps enrich the financial literacy, freedom, and inclusion of the global general public with American focus. We empower stock market investors through education, technology, and social integration.
Tony Robbins suggests that one has to be able to make money during sleep hours in order to reach financial freedom.
https://ayafintech.network/blog/tony-robbins-suggests-that-one-has-to-be-able-to-make-money-during-sleep-hours-in-order-to-reach-financial-freedom
CNBC news anchor Becky Quick interviews Warren Buffett in early-2019.
https://ayafintech.network/blog/cnbc-news-anchor-becky-quick-interviews-warren-buffett-in-early-2019
Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs.
https://ayafintech.network/blog/warren-buffett-places-his-largest-stock-bets-on-apple-american-express-and-goldman-sachs
We may need to reconsider the new rules of personal finance.
https://ayafintech.network/blog/we-may-need-to-reconsider-the-new-rules-of-personal-finance
Americans continue to keep their financial New Year resolutions.
https://ayafintech.network/blog/americans-continue-to-keep-their-financial-new-year-resolutions
American parents often worry about money and upward mobility for their children.
https://ayafintech.network/blog/american-parents-often-worry-about-money-and-upward-mobility-for-their-children
Congresswoman Alexandria Ocasio-Cortez proposes greater public debt finance with minimal tax increases for the Green New Deal.
https://ayafintech.network/blog/congresswoman-alexandria-ocasio-cortez-proposes-greater-public-debt-finance-with-minimal-tax-increases-for-the-green-new-deal
Neoliberal public choice continues to spin national taxation and several other forms of government intervention.
https://ayafintech.network/blog/neoliberal-public-choice-continues-to-spin-national-taxation-and-several-other-forms-of-government-intervention
A physicist derives a mathematical formula for success.
https://ayafintech.network/blog/a-physicist-derives-a-mathematical-formula-for-success
Warren Buffett, shares his key insights into life, success, money, and interpersonal communication.
https://ayafintech.network/blog/warren-buffett-shares-his-key-insights-into-life-success-money-and-interpersonal-communication
Business titans often step away from their urgent work, slow down, and invest in self-enrichment.
https://ayafintech.network/blog/business-titans-often-step-away-from-their-urgent-work-slow-down-and-invest-in-free-activities-for-self-enrichment
Tony Robbins summarizes several personal finance and investment lessons for the typical layperson.
https://ayafintech.network/blog/tony-robbins-summarizes-several-personal-finance-and-investment-lessons-for-the-typical-layperson
This infographic visualization summarizes the key habits and investment styles of highly successful entrepreneurs.
https://ayafintech.network/blog/this-infographic-visualization-summarizes-the-key-habits-and-investment-styles-of-highly-successful-entrepreneurs
Warren Buffett points out that it is important to invest in oneself with better interpersonal communication.
https://ayafintech.network/blog/warren-buffett-points-out-that-it-is-important-to-invest-in-oneself-with-better-interpersonal-communication
It may be illegal for institutional investors to buy-and-hold large equity stakes in a less competitive industry with high market concentration.
https://ayafintech.network/blog/institutional-investors-buy-and-hold-large-equity-stakes-in-a-less-competitive-industry-with-high-market-concentration
Millennials can save to make a fortune with compound interest over 40 years.
https://ayafintech.network/blog/millennials-can-save-to-make-a-fortune-over-40-years
Warren Buffett invests in American stocks across energy, transport, and finance etc.
https://ayafintech.network/blog/warren-buffett-invests-in-american-stocks-across-numerous-industries-such-as-energy-transport-and-finance
These famous quotes of self-made billionaires are inspirational words of wisdom on investment management.
https://ayafintech.network/blog/famous-quotes-of-self-made-billionaires-on-investment-management
Warren Buffett points out that many people misunderstand his stock investment method in several ways.
https://ayafintech.network/blog/warren-buffett-points-out-that-many-people-misunderstand-his-stock-investment-method-in-several-ways
Would you rather receive $1,000 each day for one month or a magic penny that doubles each day over the same month?
https://ayafintech.network/blog/magic-penny-doubles-compound-interest
A small fraction of the population enjoys most capital and wealth creation.
https://ayafintech.network/blog/accumulative-advantage-suggests-that-a-small-fraction-of-the-population-enjoys-most-capital-and-wealth-creation
The U.S. stock market delivers a hefty long-term average return of 11% per annum.
https://ayafintech.network/blog/american-stock-market-has-delivered-a-hefty-11%25-long-run-average-return-per-annum
Tony Robbins recommends portfolio optimization only once a year.
https://ayafintech.network/blog/tony-robbins-recommends-portfolio-optimization-only-once-a-year
Tony Robbins explains in his latest book on personal finance that *patience* is the top secret.
https://ayafintech.network/blog/tony-robbins-explains-that-patience-is-the-top-secret-to-successful-investment-management
Thomas Piketty frames economic inequality as a global phenomenon.
https://ayafintech.network/blog/thomas-piketty-frames-economic-inequality-as-a-global-phenomenon
Rakesh Jhunjhunwala is India's equivalent to Warren Buffett in America.
https://ayafintech.network/blog/india-equivalent-to-warren-buffettrakesh-jhunjhunwala-is-indias-equivalent-to-warren-buffett-in-america
We can learn much from the frugal habits and lifestyles of several billionaires.
https://ayafintech.network/blog/we-can-learn-much-from-the-frugal-habits-and-lifestyles-of-several-billionaires
AYA Analytica is our online regular podcast and newsletter about key financial news, market insights, economic issues, and stock investment strategies on our Andy Yeh Alpha (AYA) fintech network platform. With both American focus and international reach, our primary and ultimate corporate mission aims to help enhance financial literacy, inclusion, and freedom of the open and diverse global general public. We apply our unique dynamic conditional alpha investment model as the first aid for every investor with profitable asset investment signals and portfolio strategies. In fact, our AYA freemium fintech network platform curates, orchestrates, and provides proprietary software technology and algorithmic cloud service to most members who can interact with one another on our AYA fintech network platform. Multiple blogs, posts, ebooks, analytical reports, stock alpha signals, and asset omega estimates offer proprietary solutions and substantive benefits to empower each financial market investor through technology, education, and social integration. Please feel free to sign up or login to enjoy our new and unique cloud software services on AYA fintech network platform now!!
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Andy Yeh Alpha (AYA) fintech network platform serves as each investor's social toolkit for profitable investment management. AYA fintech network platform helps promote better financial literacy, inclusion, and freedom of the global general public. We empower investors through technology, education, and social integration.
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