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Trading Ideas

How Does Diversification Protect Investors?

March 31, 2020 admin Comments Off on How Does Diversification Protect Investors?

Perhaps you’ve heard that portfolio diversification helps protect investors from risk. If so, are you wondering how diversification protects investors?
For starters, we need to understand what we mean by diversifying our portfolio to hedge against risk. Diversifying your portfolio simply means investing in a variety of different types of assets.

Two Different Types of Risk
When you invest in a financial asset, you take on risk. This may sound like a bad thing. But it isn’t. Because without risk, there would be virtually no reward.
The more risk we take on when investing, the higher the potential return we have in the long …read more […]

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Trading Ideas

Carnival Cruise Lines Seeks to Borrow $3 Billion

March 31, 2020 admin Comments Off on Carnival Cruise Lines Seeks to Borrow $3 Billion

(Bloomberg) — Cruise line operator Carnival Corp. is turning to all corners of the capital markets to raise $6 billion of cash after the Covid-19 pandemic halted travel, bringing its business to a near standstill.The company is tapping bond investors on both sides of the Atlantic with a $3 billion sale of secured notes in U.S. dollars and euros, according to people with knowledge of the matter who asked not to be identified because the details are private. The new notes will be secured by a first-priority claim on the company’s assets and mature in three years, the people said.Carnival …read more […]

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Trading Ideas

British American Tobacco to Raise $2.4 Billion From Debt Offering

March 31, 2020 admin Comments Off on British American Tobacco to Raise $2.4 Billion From Debt Offering

British American Tobacco (BTI) said on Tuesday it priced a debt offering of $2.4 billion notes and intends to use the proceeds for general business purposes, including paying off upcoming maturities.The maker of Lucky Strike and Dunhill cigarettes said it expected the issuance to close on April 2.“COVID-19 is developing rapidly. We are fortunate that our business is resilient and is supported by a geographically diversified supply chain from both a manufacturing and distribution standpoint,” British American Tobacco Chief Executive Officer Jack Bowles said on March 18. “As yet, we have seen no material impact.”With a Buy rating from …read more […]

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Trading Ideas

Why Stock Buybacks Will Drop in 2020 with History as a Guide

March 31, 2020 admin Comments Off on Why Stock Buybacks Will Drop in 2020 with History as a Guide

The longest bull market in U.S. history has come to an end. Stock buybacks have helped fuel the stock market but with this recession, companies are tightening their purse strings. Airlines, banks and other companies have already announced cutting back. President Trump has also put downward pressure on repurchases…

I am fine with restricting buybacks. In fact, I would demand that there be no stock buybacks. I don’t want them taking hundreds of millions of dollars and buying back their stock.

Buybacks get a lot of negative press but they aren’t inherently bad. Like all tools, it depends on how you use …read more […]

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Business News

Explainer: What the Federal Reserve has done in the coronavirus crisis

March 31, 2020 admin Comments Off on Explainer: What the Federal Reserve has done in the coronavirus crisis

The Federal Reserve has moved into overdrive to try to keep the U.S. economy from suffering lasting damage from the coronavirus pandemic, announcing an emergency interest rate cut on March 3 and rolling out new efforts almost weekly since, including slashing rates to zero and relaunching large-scale asset purchases.

…read more […]