• Mike V.

April Synopsis


Five Companies Represent 35% Of All The S&P 500’s Value Creation Over The Last 5 Years


Six companies represent 37% of all the S&P 500’s value creation over the last 5 years:

Amazon (10.1%), Apple (6.5%), Facebook (4.7%), Google (6.4%) and Microsoft.


The value of the companies in the S&P 500 has risen by $13,161 billion.


At the end of March 2014, the S&P 500 had a total value of $17,206,453 million.


At the end of March 2019, it was $24,760,982 million


Here are the numbers:


Amazon: Market cap Q1 2014: $157.4 billion Market cap now: $917.6 billion Difference: $760.2 billion


Apple: Market cap Q1 2014: $472.1 billion Market cap now: $963.9 billion Difference: $491.8 billion


Facebook: Market cap Q1 2014: $157.2 billion Market cap now: $510.5 billion Difference: $353.3 billion


Google: Market cap Q1 2014: $375.6 billion Market cap now: $859.5 billion Difference: $483.9 billion


Microsoft: Market cap Q1 2014: $343.0 billion Market cap now: $934.2 billion Difference: $591.2 billion


Exercise Officially Makes You Happier Than Money, According to Yale and Oxford Research


The team also noticed that certain sports that involve socializing can have more of a positive effect on your mental health than others. In the study, published in The Lancet, scientists collected data about the physical behavior and mental mood of over 1.2 million Americans. Participants could choose from 75 types of physical activity — from lawn-mowing, childcare, and housework to weight lifting, cycling, and running. Participants were asked to answer the following question: "How many times have you felt mentally unwell in the past 30 days, for example, due to stress, depression, or emotional problems?" The participants were also asked about their income and physical activities. They were able to choose from 75 types of physical activity -- from lawn-mowing, childcare, and housework to weight lifting, cycling and running. Those who keep more active tend to be happier overall. The scientists found that, while those who exercised regularly tended to feel bad for around 35 days a year, non-active participants felt bad for 18 days more on average. In addition, the researchers found that physically active people feel just as good as those who don't do sports, but who earn around $25,000 more a year. Essentially, you'd have to earn quite a lot more for your earnings to give you the same happiness-boosting effect sport has. That doesn't mean, however, that the more sport you do, the happier you are.


Reuters: Jaguar Land Rover planning to allow helpful car drivers to earn cryptocurrency


Jaguar Land Rover, Britain's largest auto manufacturer, is testing software that will allow drivers of its cars to earn the IOTA cryptocurrency as a reward for sharing data. The company is developing what it calls "smart wallet" technology to be installed in its automobiles. This would reward Jaguar car drivers with IOTA coins for actions such as enabling their vehicles to automatically report useful data, such as traffic congestion or potholes to navigation providers or local authorities. Drivers could also earn rewards if the car participates in a ride-sharing program, Jaguar said. The tokens earned could be used to pay for tolls, parking and charging for electric cars. The overall goal was to "achieve zero emissions, zero accidents, and zero congestion," the company said. Global car companies are exploring blockchain applications, figuring out different ways in which they can leverage the technology to suit their different needs. Blockchain, the system powering cryptocurrencies like bitcoin, is a shared database that is maintained by a network of computers connected to the internet. The IOTA token is based on a distributed ledger technology that enables people and machines to transfer money and data without any transaction fees. "The smart wallet technology ... can be easily adapted into all new vehicles," Dominik Schiener, IOTA co-founder. "IOTA wants to enable interoperability with all these different players. So there is no Jaguar coin, no BMW coin, but one universal token for this machine economy," he added.


Reuters: Lyft Investors Sue Over Slump, Claiming IPO Was Overhyped


Lyft Inc. was sued by investors who claim Wall Street overstated its market position when it went public last month, leading to a dramatic plunge in its stock price. Since going public March 28, Lyft has declined to $59.51. That compares with the offering price of $72. The investors claim exaggerating in prospectus when it said its U.S. market share was 39%. In both suits, the plaintiffs also dinged the company for failing to tell investors that it was about to recall more than a 1,000 of the bikes in its ride-share program.


Bloomberg: China Is on a Big Gold-Buying Spree


China’s on a bullion-buying spree as Asia’s top economy expanded its gold reserves for a fourth straight month, adding to investors’ optimism that central banks from around the world will press on with a drive to build up holdings. The People’s Bank of China raised reserves to 60.62 million ounces in March, in tonnage terms, last month’s inflow was 11.2 tons, following the addition of 9.95 tons in February, 11.8 tons in January and 9.95 tons in December. China, the world’s top gold producer and consumer, is facing signs of a slowing economy. Should China continue to accumulate bullion at the current rate over 2019, it may end the year as the top buyer after Russia, which added 274 tons in 2018. The longer-term outlook is more bullish as central-bank demand will help support prices, with inflows running as high as last year, according to Goldman Sachs, which expects a rally to $1,450 an ounce over 12 months. Governments worldwide added 651.5 tons of bullion in 2018, the second-highest total on record, according to the World Gold Council. Russia has quadrupled its reserves within the span of a decade amid President Vladimir Putin’s quest to break the country’s reliance on the dollar, and data from the central bank show holdings rose 1 million ounces in February, the most since November.


Reuters: GM, Ford and Toyota join to advance self-driving testing, standards


General Motors Co, Ford Motor Co and Toyota Motor Corp said in a statement they were joining forces with automotive engineering group SAE International to establish autonomous vehicle “safety guiding principles to help inform standards development.” The group will also “work to safely advance testing, pre-competitive development and deployment,” they added. Regulators in the United States have been grappling with how to regulate self-driving cars, with other countries watching closely to see how implementation of the emerging technology pans out. Last year, U.S. lawmakers, unable to agree on a way forward, abandoned a bid to pass sweeping legislation to speed the introduction of vehicles without steering wheels and human controls onto roads, but may resurrect the effort later this year. The new group, dubbed the Automated Vehicle Safety Consortium, will begin by deciding priorities, with a focus on data sharing, vehicle interaction with other road users and safe testing guidelines. Randy Visintainer, chief technology officer at Ford’s Autonomous Vehicles unit, said the goal was to work with companies and government “to expedite development of standards that can lead to rule making.” Last month, the National Highway Traffic Safety Administration asked the public if robotic cars should be allowed on streets without steering wheels or brake pedals as they try to set the first legal boundaries for their design. NHTSA’s existing rules prohibit vehicles without human controls. The regulator will for the first time compare a vehicle in which all driving decisions are made by a computer versus a human driver. A fatal 2018 accident involving a self-driving vehicle operated by Uber Technologies Inc and two deadly plane crashes involving highly automated Boeing 737 MAX airliners have put a spotlight on the ability of regulators to assess the safety of advanced systems that substitute machine intelligence for human judgment. The new consortium cited as a successful model a standards group that helped create a collection of some 4,500 aerospace standards covering airframe, engine and other aircraft parts.


Reuters: Fiat Chrysler picks Google, Samsung for global connected car system


Fiat Chrysler will use technology from Alphabet Google and Samsung to connect all its vehicles by 2022, providing music and video and facilitating future car-sharing and self-driving capabilities. Fiat Chrysler will use Google’s Android operating system globally instead of a mixture of software that varies by region. The automaker will also use a cloud-based digital platform from Samsung Electronics Harman unit. Unlike its rivals General Motors Co and Ford Motor Co, FCA has spent virtually nothing on developing self-driving vehicle technology. This saves the company large amounts of money, but makes it reliant on outside parties to provide technology and systems. FCA said it will launch the new capabilities in the second half of 2019. The company said the system will aid owners “by predicting maintenance needs, locating fuel and charging stations, receiving traffic prompts and restaurant offers and providing live customer-care assistance at the push of the button.”


Reuters: Bosch signs pact with Sweden's Powercell to mass produce fuel cells


German auto supplier Bosch on Monday said it had reached a licensing agreement with Powercell Sweden AB to jointly mass produce hydrogen fuel cells for electrifying heavy-duty commercial vehicles. European Union rules call for trucks to cut carbon dioxide (CO2) emissions by 15% by 2025, and 30% by 2030 which will force the industry to adopt hybrid and electric powertrains. Hydrogen fuel cells take less time to refuel than electric car batteries, making them more suitable for use in vehicles that need to stay on the road for prolonged periods of time. One liter of hydrogen contains as much energy as about three liters of diesel, adding that hydrogen fuel cells will power around 20% of electric vehicles by 2030.


Bloomberg: Historic Stock Rally Favors Bears More Than Bulls


After a harrowing end to 2018, U.S. stocks have staged a fierce comeback. For many investors, whose time in the market numbers in years rather than months, the more useful question is how stocks will fare over the longer term, and the most likely answer is not well. The reason is that U.S. stocks are expensive, thanks to a historic rally in which the market has more than quadrupled in value since March 2009. Investors are constantly told but never quite seem to believe, frothy stock prices tend to be followed by subpar returns.


The market nearly quintupled in value during the Roaring 1920s, and stock prices were famously rich by the end of the decade. Investors who managed to hang on during the subsequent plunge weren’t rewarded for their bravery. It happened again four decades later when the market jumped more than six times in value during the 1950s and 1960s, driving up valuations to heights not seen since the 1920s. Investors who bought or owned the S&P 500 during the late 1960s through mid-1970s endured negative returns for over 10 years afterward. Three decades later, the market quadrupled during the 1980s through the mid90s. Then came the dot-com mania, and the S&P 500 tripled in value from 1995 to 1999. By the time the two-decade-long bull market ended in early 2000, the market had surged more than 12 times in value, reaching the highest valuations on record. And yet again, the S&P 500’s real annual return was flat for 20 years. That repeating pattern is not a coincidence. To see why, it’s helpful to look at three variables that drive returns: earnings growth, dividend yield and change in valuation. All three smiled on investors in recent years, as they did in previous bull markets. The problem is that dividends and earnings are not reliable, companies can cut dividends anytime. They’re highly volatile, growing in fits and starts. Real earnings grew by just 1.9% a year over the last 150 years, according to data compiled by Yale professor Robert Shiller, well below recent growth rates, which strongly suggests that the current pace isn’t sustainable. That reality is obscured by arguments about whether and to what extent stocks are too expensive. But even by the most flattering measures, such as price-to-earnings ratios using analysts’ rosy earnings projections, U.S. stocks are not cheap. And according to more conservative P/E ratios that use current earnings or a trailing average of recent years’ earnings, stocks are as pricey as they were in the late 1920s and roughly 40 percent more expensive than in the late 1960s. That’s why there’s near universal agreement that returns will be lower going forward. Even Wall Street, which rarely lacks enthusiasm for stocks because they sell risk investments to customers, concedes as much. That doesn’t mean investors should dump all their U.S. stocks, but it’s useful to have realistic expectations about what’s likely ahead. It may temper investors’ urge to take more risk than they can afford or skimp on saving in the hope that the market will bail them out, or simply prevent surprises that could lead to bad investment decisions down the road. So while bulls and bears bicker about the market’s path, it’s worth remembering that there’s little disagreement about where it’s likely to end up, which, after all, is the only thing worth talking about.


Bloomberg: Falling Mercedes-Benz Sales


Daimler AG said its financial targets have become harder to achieve after a tough start to the year, forcing the auto manufacturer to step up efforts to drive down costs. The Mercedes-Benz maker’s first-quarter profit slumped 16 percent after a decline in deliveries combined with the rising cost of developing new models. Chief Executive Officer Dieter Zetsche said the results fell well short of the company’s expectations. “Achieving the financial targets for 2019 has not become easier since the first quarter,” Zetsche said. The manufacturer, like other carmakers, is battling slower sales in the U.S. and Europe while shouldering record spending on a range of new electric vehicles. Renault SA reported a 4.8 percent drop in first-quarter revenue, while earlier in the week Nissan Motor Co. said it would miss its annual profit goal. Ford Motor Co. meanwhile surged past expectations.


7 Tax Breaks for Startup Entrepreneurs to Take Advantage of in 2019


Across all industries, the average small business pays a tax rate of approximately 19.8 percent, according to tax professor Jean Murray. Below are several tips on how you can save the most money possible once taxes come due -- if not for this year, then the next.

Here are seven tax breaks to keep in mind for 2019:


1. Write off the cost of inventory.

If you sell physical products (online or offline), you can write off the cost of all that inventory once it’s sold. This can end up being a big chunk of money saved since the cost of inventory is often a top contributor to business overhead. Remember, you only have to pay taxes on the profits of your business, not on all the revenue that your business generates.


2. Your home office can lead to savings.

Rather than buy expensive office space elsewhere, many startup entrepreneurs choose to work from home. And doing that won’t just save you money on the front-end, you can also write off the cost of your home office. You’ll need to determine the square footage of your home office as a percentage of your home’s entire square footage. Then, you can write off that same percentage of mortgage or rent as a home office business expense.


3. Utilities make a difference.

Just as you would claim your home office as a business expense, you can also claim a percentage of the associated utilities (electricity, water, plumbing). Here’s As TurboTax explains, a home office that occupies 20 percent of the house lets you deduct 20 percent of your bills for utilities, homeowners insurance, repairs, maintenance and homeowners association fees.


4 Business insurance leads to tax breaks.

Don’t forget to write off any insurance costs that you have for your business. If you use a home office, then a portion of your house’s insurance could be tax deductible. And if you have a business in an industry which requires additional levels of coverage (malpractice coverage or liability coverage, for instance), you can write those premiums off as well.


5. Freelance costs can play a role.

At the end of the year send qualifying freelancers (those to whom you paid $600 or more during the tax year) a 1099-MISC so that you can write off those paychecks as a business expense.


6. Don’t forget about work trips.

A portion of most of the money that you spend while traveling for work can be written off as a business expense -- but this deduction largely depends on what, exactly, you’re writing off. Fifty percent of food purchased for business purposes can be deducted from your taxable income. And the entire cost of plane tickets, gas or other transportation expenses can usually be deducted, as well. The IRS defines it as being away from your home for “substantially longer than an ordinary day’s work.”


7. There are major S-corp advantages, too.

As a startup entrepreneur, you may find it tempting to take the path of least resistance and simply leave your business as a “sole proprietorship.” If your business pulls significant profit you could save a lot of money by transitioning your company from a sole proprietorship to an S-corp. That way, you don’t have to pay double taxes on corporate income, only on what you actually pay yourself. Entrepreneur contributor Tom Wheelwright explained it this way: “One of the biggest benefits of forming an S-corp versus remaining a self-employed contractor is asset protection. An S-corp also does not have a legal responsibility to pay taxes on its corporate income.”

5 views

About Us

Clients

Other

  • Facebook Social Icon
  • Twitter Social Icon
  • Instagram Social Icon
linkedin-button.png

VIMA Registered Investment Advisors • 46 E. Square Lake Rd. • Troy MI 48085 • 248-526-6700

Copyright © 2019 VIMA Registered Investment Advisor. All rights reserved.