The U.S. dollar has strengthened its grip on the global financial system since Russia invaded Ukraine two years ago, defying expectations of “de-dollarization.”
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Tim Draper, a venture capitalist famous for his bitcoin price predictions, has praised El Salvador’s vision of embracing this new technology and talked about the benefits of this decision for its people. According to Draper, bitcoin will make El Salvador one of the richest countries in the world in the next 30 or 40 years. […]
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Traders work on the floor of the New York Stock Exchange during morning trading on January 31, 2024 in New York City.
Michael M. Santiago | Getty Images
The so-called “Magnificent 7” now wields greater financial might than almost every other major country in the world, according to new Deutsche Bank research.
The meteoric rise in the profits and market capitalizations of the Magnificent 7 U.S. tech behemoths — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla — outstrip those of all listed companies in almost every G20 country, the bank said in a research note Tuesday. Of the non-U.S. G20 countries, only China and Japan (and the latter, only just) have greater profits when their listed companies are combined.
Deutsche Bank analysts highlighted that the Magnificent 7’s combined market cap alone would make it the second-largest country stock exchange in the world, double that of Japan in fourth. Microsoft and Apple, individually, have similar market caps to all combined listed companies in each of France, Saudi Arabia and the U.K, they added.
However, this level of concentration has led some analysts to voice concerns over related risks in the U.S. and global stock market.
Jim Reid, Deutsche Bank’s head of global economics and thematic research, cautioned in a follow-up note last week that the U.S. stock market is “rivalling 2000 and 1929 in terms of being its most concentrated in history.”
Deutsche analyzed the trajectories of all 36 companies that have been in the top five most valuable in the S&P 500 since the mid-1960s.
Reid noted that while big companies eventually tended to drop out of the top five as investment trends and profit outlooks evolved, 20 of the 36 that have populated that upper bracket are still in the top 50 today.
“Of the Mag 7 in the current top 5, Microsoft has been there for all but 4 months since 1997. Apple ever present since December 2009, Alphabet for all but two months since August 2012 and Amazon since January 2017. The newest entrant has been Nvidia which has been there since H1 last year,” he said.
Tesla had a run of 13 months in the top five most valuable companies in 2021/22 but is now down to 10th, with the share price having fallen by around 20% since the start of 2024. By contrast, Nvidia’s stock has continued to surge, adding almost 47% since the turn of the year.
“So, at the edges the Mag 7 have some volatility around the position of its members, and you can question their overall valuations, but the core of the group have been the largest and most successful companies in the US and with it the world for many years now,” Reid added.
Could the gains broaden out?
Despite a muted global economic outlook at the start of 2023, stock market returns on Wall Street were impressive, but heavily concentrated among the Magnificent Seven, which benefitted strongly from the AI hype and rate cut expectations.
In a research note last week, wealth manager Evelyn Partners highlighted that the Magnificent 7 returned an incredible 107% over 2023, far outpacing the broader MSCI USA index, which delivered a still healthy but relatively paltry 27% to investors.
Daniel Casali, chief investment strategist at Evelyn Partners, suggested that signs are emerging that opportunities in U.S. stocks could broaden out beyond the 7 megacaps this year for two reasons, the first of which is the resilience of the U.S. economy.
“Despite rising interest rates, company sales and earnings have been resilient. This can be attributed to businesses being more disciplined on managing their costs and households having higher levels of savings built up during the pandemic. In addition, the U.S. labour market is healthy with nearly three million jobs added during 2023,” Casali said.
The second factor is improving margins, which Casali said indicates that companies have adeptly raised prices and passed the impact of higher inflation onto customers.
“Although wages have risen, they haven’t kept pace with those price rises, leading to a decline in employment costs as a proportion of the price of goods and services,” Casali said.
“Factors, including China joining the World Trade Organisation and technological advances, have enabled an increased supply of labour and accessibility to overseas job markets. This has contributed to improving profit margins, supporting earnings growth. We see this trend continuing.”
When the market is so heavily weighted toward a small number of stocks and one particular theme — notably AI — there is a risk of missed investment opportunities, Casali said.
Many of the 493 other S&P 500 stocks have struggled over the past year, but he suggested that some could start to participate in the rally if the two aforementioned factors continue to fuel the economy.
“Given AI-led stocks’ stellar performance in 2023 and the beginning of this year, investors may feel inclined to continue to back them,” he said.
“But, if the rally starts to widen, investors could miss out on other opportunities beyond the Magnificent Seven stocks.”
Russian opposition leader Alexei Navalny attends a rally in support of political prisoners in Prospekt Sakharova Street in Moscow, Russia on September 29, 2019.
Sefa Karacan | Anadolu | Getty Images
World leaders and the wife of prominent Russian opposition leader Alexei Navalny reacted with dismay and suspicion to reports of the Kremlin critic’s death in a Siberian penal colony.
Yulia Navalnaya, Navalny’s wife, was greeted on Friday with a standing ovation as she addressed the Munich Security Conference.
Composed but with tears in her eyes, Navalnaya told the room that Russian claims that her husband had collapsed and died were yet to be independently confirmed.
She said that Russian President Vladimir Putin and his cronies in the Kremlin should be held accountable for the crimes committed against her family and the country at large.
“If it is the true, I would like Putin and all his staff … I want them to know that they will be punished for what they have done with our country, with my family, and with my husband,” she said.
“This regime and Vladimir Putin should be held personally responsible for all the atrocities they have committed in our country these past years,” she said.
President Joe Biden said “Putin is responsible” for Navalny’s reported death. “Make no mistake: Putin is responsible for Navalny’s death… What has happened to Navalny is yet more proof of Putin’s brutality,” Biden said.
Yulia Navalnaya, wife of late Russian opposition leader Alexei Navalny, attends the Munich Security Conference (MSC), on the day it was announced that Alexei Navalny is dead, by the prison service of the Yamalo-Nenets region where he had been serving his sentence, in Munich, Germany February 16, 2024.
Kai Pfaffenbach | Reuters
Reports of Navalny’s death — less than six months after the demise of former Putin ally and Wagner mercenary chief Yevgeny Prigozhin — sent reverberations around the high-level defense conference, and prompted reactions from political leaders around the world.
Russia’s Foreign Ministry said the response to Navalny’s reported death from Western leaders is “self-exposing” at a time when no forensic medical examination is yet available.
World leaders react
Russian media said, citing the prison service of the Yamalo-Nenets region where Navalny had been serving a lengthy sentence on what were widely considered to be politically motivated charges, that he had fallen ill and collapsed after a walk.
Navalny’s team said they had yet to receive confirmation of the death and questioned the veracity of the announcement.
U.S. Vice President Kamala Harris told the Munich Security Conference on Friday that Washington was working to confirm the “terrible” news.
U.S. Vice President Kamala Harris speaks, during the Munich Security Conference (MSC) in Munich, Germany February 18, 2023.
Wolfgang Rattay | Reuters
“Whatever story they tell, let us be clear, Russia is responsible, and we will have more to say on this later,” she added.
NATO Secretary General Jens Stoltenberg said he was “deeply saddened and concerned” about the reports of Navalny’s demise.
“All the facts have to be established and Russia has serious questions to answer,” he told reporters.
“Alexei Navalny has been a strong voice for freedom, for democracy, for many years, and NATO and NATO allies have called for his immediate release for a long time.”
The Kremlin critic appeared in court via video link earlier in the week, seemingly in good health and spirits despite the notoriously brutal conditions of the penal colony in which the 47-year-old was being held on a 19-year sentence.
Russian opposition politician Alexei Navalny appears on a screen via video link from the IK-6 penal colony in the Vladimir region, during a court hearing to consider an appeal against his sentence in the criminal case on numerous charges, including the creation of an extremist organization, in Moscow, Russia September 26, 2023.
Yulia Morozova | Reuters
Yet Russian news agency Interfax reported on Friday that he “felt unwell after a walk, almost immediately losing consciousness.”
European Commission President Ursula von der Leyen said she was “deeply disturbed and saddened” by news of his death.
“Putin fears nothing more than dissent from his own people. A grim reminder of what Putin and his regime are all about. Let’s unite in our fight to safeguard the freedom and safety of those who dare to stand up against autocracy,” von der Leyen said.
U.S. Secretary of State Antony Blinken said if confirmed, Navalny’s death underscores the “weakness and rot” of the Russian political system built by Putin, and laid the blame squarely at the door of the Kremlin.
“We’ll be talking to the many other countries concerned about Alexei Navalny, especially if these reports bear out to be true.”
British Prime Minister Rishi Sunak said in a post on social media platform X that “as the fiercest advocate for Russian democracy, Alexei Navalny demonstrated incredible courage throughout his life.”
“My thoughts are with his wife and the people of Russia, for whom this is a huge tragedy,” he added.
German Chancellor Olaf Scholz said he was “deeply saddened” by the news and that if confirmed, Navalny’s death was a “terrible” sign of how Russia had changed as a country in recent years.
Navalny “stood up for democracy and freedom in Russia – and apparently paid for his courage with his life. This terrible news shows once again how Russia has changed and what kind of regime is in power in Moscow,” he said in a post on X.
French Foreign Minister Stéphane Séjourné said on social media that Navalny had “paid with his life for his resistance to a system of oppression,” according to a translation.
“His death in a penal colony reminds us of the reality of Vladimir Putin’s regime,” he added. “To his family, his loved ones and the Russian people, France offers its condolences.”
Swedish Foreign Minister Tobias Billstrom said the announcement was “dreadful news,” adding that “the ruthlessness against Navalny shows again why it is necessary to continue to fight against authoritarianism.”
Russia: NATO accusations ‘self-exposing’
Seven members of the Russian government were sanctioned by the U.S. in early 2021 for what has been independently confirmed as the poisoning of Navalny with a Novichok nerve agent in August 2020.
Navalny narrowly survived and was transported to Germany, but was arrested in January 2021 shortly after arriving back in Russia, sparking international outcry.
In response, Russian Foreign Ministry spokesperson Maria Zakharova said via X that “the instant reaction of NATO leaders to the news of Alexey Navalny’s demise in the form of direct accusations vs Russia is self-exposing.”
She added, “No forensic medical examination data IS available, yet the West has already voiced its ‘conclusions’.”
Tokenized real world assets (RWA) redefined as personal property in landmark Iowa digital asset bill
A seemingly progressive digital asset bill has been approved by the Judiciary Committee in Iowa, introducing significant amendments to the Uniform Commercial Code, explicitly aiming to integrate digital assets and electronic records into commercial transactions. The bill, House File 2519, is titled “An act relating to commercial transactions, including control and transmission of electronic records and digital assets.”
As reported by the Committee on Judiciary monitored with TrackBill on Feb. 15, this legislation seeks to address the complexities and opportunities presented by digital assets within the legal framework of commerce. By offering a nuanced approach to the control and transmission of electronic records, the bill promises to enhance legal clarity and security in digital transactions, catering to the needs of the evolving digital economy.
House File 2519 clarifies the legal standing of digital assets by providing comprehensive definitions for terms like “controllable electronic record,” “digital asset,” and “smart contract.” This precision aims to reduce ambiguities and foster a more secure environment for digital commerce. However, the potential for variations in such definitions across state, federal, and international jurisdictions adds potential complexity for digital asset service providers.
Recognizing digital assets as personal property
However, the new definitions are a key aspect of this bill. The bill recognizes the legality of smart contracts from Article 12 of the 2022 “Uniform Commercial Code Amendments,” stipulating that a contract cannot be denied legal effect or enforceability solely because it is executed through distributed ledger technology or a smart contract. This ensures that smart contracts, which automatically execute the terms of a contract when certain conditions are met, have the same legal standing as traditional contracts.
Further, the bill also references provisions that facilitate recording real estate through electronic means from the 2022 Act. Specifically, it highlights a county’s ability to record a real estate conveyance if the evidence of conveyance adheres to the general requirements outlined in state law and is in a format that conforms to standards set by the electronic services system. The bill specifies that this system enables counties and the Iowa County Recorders Association to collaborate in implementing the county land record information system.
Building on these aspects of the 2022 Act, House File 2519 aims to amend and add to the legal framework surrounding digital assets, focusing on adjusting the definition of “digital asset.” The bill amends the definition by eliminating exceptions previously recognized under the Uniform Commercial Code (UCC). This means that certain electronic records previously excluded from being considered digital assets, such as electronic records representing an interest in specific physical or tangible property (chattel) or a lease of such property, are no longer excluded.
For example, suppose a business takes out a loan to purchase a piece of equipment, and the loan agreement also grants the lender a security interest in that equipment as collateral. In that case, the document detailing this arrangement can be considered chattel paper. If this document is created, signed, and stored electronically, it’s an electronic record evidencing chattel paper. This digital form is increasingly common in today’s digital and financial transactions, offering a more secure and efficient way to electronically manage and transfer interests in real-world assets (RWA).
The amendment simplifies the classification of digital assets, treating them simply as personal property rather than specifically as intangible personal property. This is a shift from the possible previous categorization that might have considered digital assets more narrowly as intangible personal property. This broader classification could have implications for how digital assets are treated in various legal and commercial contexts, providing a more straightforward approach to their classification.
Intangible personal property historically referred to rights and licenses, whereas tokenized RWAs related to real estate may be more appropriately treated as personal property akin to physical property.
These provisions reflect House File 2519’s approach to further integrating digital assets into Iowa’s commercial and legal frameworks. By amending the definition of digital assets and clarifying their classification, the bill aims to simplify and modernize the regulatory environment for digital assets, making it more conducive to the evolving digital economy. Additionally, by defining terms such as “electronic services system,” the bill provides legal clarity for the operation of digital asset systems and services within the state.
Protections and recognition of digital assets
Interestingly, the legislation outlines no-action protection for qualifying purchasers of controllable electronic records, asserting that filing a financing statement under Article 9 does not constitute notice of a property right claim in a controllable electronic record.
This provision in the legislation means that individuals who purchase controllable electronic records (such as digital assets or tokens) receive legal protection against claims challenging their ownership based solely on the absence of a financing statement. Essentially, even if no financing statement is filed to declare a security interest in a digital asset publicly, the purchaser’s rights to the asset are protected. This aims to streamline transactions by simplifying the proof of ownership and reducing the administrative burden on parties engaging in digital transactions.
The state creates distance on CBDCs with neutral legislation without endorsement.
The bill also explicitly states that its provisions should not be interpreted to support, endorse, create, or implement a national digital currency. This stance ensures that the legislation remains neutral regarding a centrally issued digital currency (CBDC) by a national government or central bank, focusing instead on the regulatory framework for digital assets without promoting or facilitating the establishment of a national digital currency.
The potential implications of House File 2519 on digital asset service providers and users include heightened regulatory oversight, increased legal and operational complexities, and a need for technological adjustments to meet the legal standards for control over digital assets. These challenges highlight the bill’s comprehensive attempt to adapt Iowa’s legal framework to the digital age, balancing innovation with legal clarity and consumer protection.
Ultimately, House File 2519 represents a step towards integrating digital assets into the state’s legal landscape, aiming to provide a more secure and clarified legal framework for digital transactions. While the bill’s detailed approach introduces specific regulatory and operational challenges, it also offers opportunities for enhancing the legal infrastructure supporting the digital economy.
For more than a decade, action cameras from GoPro (GPRO) have enjoyed a market-leading position among adrenaline seekers. Surfers, bikers, skiers, divers, and more all capture their adventures with these durable devices.
And then there are time-constrained individuals like me who aspire to such a lifestyle and own a GoPro camera that mostly just sits there. But it’s ready for me whenever I finally get around to surfing Diamond Head.
Sales for GoPro devices are still holding strong after all these years. In 2023, the company sold 3 million cameras, which was a 6% jump from camera sales in 2022.
Unfortunately, the camera hardware business has proved to be a challenging venture for GoPro. Despite the brand’s popularity and ongoing strong sales, the company fails to consistently earn a profit and create shareholder value.
Several years ago, GoPro launched a new business that was supposed to be a better opportunity than hardware sales. Adoption of this product has been strong and now brings in nearly $100 million in annual revenue. But unfortunately it hasn’t been a catalyst for the stock, as I’ll explain.
GoPro’s other near-nine-figure business
GoPro offers a subscription service that provides unlimited cloud storage of pictures and videos, certain discounts on merchandise, and access to editing software. The company ended the fourth quarter of 2023 with 2.5 million subscribers, which was a healthy 12% year-over-year increase.
Thanks to this growth, GoPro generated subscription-and-services revenue of $97 million in 2023. It generated $82 million in 2022.
Many investors believed that this other business from GoPro would boost growth and improve profit margins. However, the chart below shows that this hasn’t been the case. Revenue is almost flat over the past five years, and the company’s gross margin has gone down.
GPRO Gross Profit Margin data by YCharts
The explanation for this is fairly simple. While $100 million is a big number, GoPro had revenue of $1 billion for the whole business. Therefore, revenue from subscriptions and services doesn’t meaningfully impact the overall numbers.
Moreover, cloud revenue should be high-margin in theory. But with only 2.5 million subscribers, GoPro lacks scale. Therefore, it’s not getting a boost here.
GoPro promises to grow its opportunity again
In 2024, GoPro is expanding its market opportunity by moving into motorcycle helmets. In January, the company acquired tech-enhanced helmet maker Forcite for an undisclosed amount. Management believes that it can service half of this market it estimates at $6 billion.
I’m skeptical that a move such as this moves the needle for GoPro. While the multibillion-dollar target is big, management left room for doubt. Founder and CEO Nick Woodman said, “There will be some cannibalization because you’re right, there are many motorcyclists who buy a GoPro to attach it to their helmet.”
In other words, GoPro can’t expect motorcyclists to buy both a camera and tech-enabled helmet. They’ll buy one or the other. Therefore, it’s questionable how much this acquisition really grows its long-term opportunity.
What should investors do now?
I believe that GoPro will continue to struggle with growth and profitability in coming years, which is why this is a stock I would avoid today.
Part of GoPro’s struggles making a profit have resulted from difficulties in predicting consumer demand. Sometimes it has too much inventory that doesn’t get sold. The problem is that it frequently updates its product lineup. If old inventory doesn’t sell before new cameras come out, old cameras must be marked down, hurting profits.
In Q4, this problem surfaced yet again for GoPro, demonstrating that it’s not a thing of the past. Management had guided for Q4 revenue of $325 million but only generated revenue of $295 million — that’s a big miss. And the reason is that it sold fewer of its lower-tier priced cameras than expected.
Over the next two years, GoPro intends to launch more products at even more price points. But this introduces a higher level of complexity in predicting consumer demand. And if GoPro gets it wrong, it could actually exacerbate its problems with profitability even more.
My GoPro camera is well loved even if it doesn’t see as much action as I’d like it to. I believe many consumers feel the same about the brand. But when it comes to the stock, revenue growth and profits matter. I don’t see either metric sustainably trending in the right direction right now, which is why GoPro stock doesn’t seem like a stock worth buying today.
A firefighter stands on boulders covered with pink fire retardant while monitoring the Gavilan Fire, which has already burned more than 250 acres in Perris, Riverside County, California, on July 15, 2023.
David Swanson | Afp | Getty Images
Scientists on Thursday said the world surpassed a key warming threshold across an entire year for the first time on record, calling to slash planet-warming greenhouse gas emissions.
The European Union’s Copernicus Climate Change Service (C3S) said the global mean temperature for the 12-month period through to January was 1.52 degrees Celsius above the 1850-1900 pre-industrial average, and 0.64 degrees above the 1991-2020 average.
The findings do not represent a break of the landmark Paris Agreement, which aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels” over the long term.
But the EU’s climate monitor said the data reinforces the need to rapidly reduce greenhouse gas emissions in order to avoid the worst of what the climate crisis has in store.
C3S also confirmed that the first month of 2024 was the warmest January on record, with an average surface temperature of 13.14 degrees Celsius — some 0.7 degrees Celsius above the 1991-2020 average and 0.12 degrees Celsius higher than the previous warmest January, logged in 2020.
Each of the seven months prior to January also broke heat records for their respective time of the year.
Scientists recently confirmed 2023 as the hottest year on record.
“2024 starts with another record-breaking month — not only is it the warmest January on record but we have also just experienced a 12-month period of more than 1.5°C above the pre-industrial reference period,” Samantha Burgess, deputy director of C3S, said in a statement.
“Rapid reductions in greenhouse gas emissions are the only way to stop global temperatures increasing.”
‘A rapidly shrinking window’
The data comes after repeated warnings that the world remains “massively off track” to limit global warming to 1.5 degrees Celsius.
The 1.5 degrees Celsius threshold is recognized as a crucial long-term target because so-called tipping points become more likely beyond this level. If passed, tipping points can lead to dramatic shifts or potentially irreversible changes to some of Earth’s largest systems.
Matt Patterson, a postdoctoral research assistant in atmospheric physics at the University of Oxford, described the findings of C3S as a “significant milestone,” but cautioned that they do not mean the Paris Agreement has failed.
“A single year above the 1.5C threshold is not enough to breach the Paris climate agreement as the agreement concerns temperatures averaged over 20 to 30 years,” Patterson said.
“However, exceeding 1.5C in one year underlines the rapidly shrinking window of time humanity has to make deep emissions cuts and avoid dangerous climate change.”
A farmstead is seen in a valley with little snow near Prags, Italy, on February 6, 2024.
Nurphoto | Nurphoto | Getty Images
The U.N. notes that the world has already warmed by around 1.1 degrees Celsius, fueling a series of extreme weather events around the world.
Brian Hoskins, chair of the Grantham Institute at Imperial College London, said the C3S findings were a “stark warning of the urgency for the action that is required to limit climate change at anything like the Paris targets.”
Silicon Valley has been the unofficial mascot of tech behemoths for years. But perhaps ironically, two of the largest technology leaders for decades don’t directly hail from the Bay Area.
Cupertino, California-based Apple is one of the most-recognized consumer electronics businesses of all time. From the iPod to the iPhone, Apple flourished under visionary leader Steve Jobs. Since 2011, the company has been led by Tim Cook. Under Cook’s reign, Apple’s market capitalization has increased nearly tenfold. At this writing, Apple’s market cap was about $2.9 trillion.
But the company’s longtime rival, Seattle-based Microsoft (MSFT -0.29%), has quietly caught up to Apple’s influence. For now, Microsoft is the most valuable company in the world — worth over $3 trillion.
I suspect Apple and Microsoft will go back and forth between the world’s largest enterprise for a bit. However, one of these “Magnificent Seven” stocks is emerging as the clear winner. Let’s dig into how Microsoft reinvented itself, and more importantly, why the long-term picture looks better than ever.
The rise of Satya Nadella and a new Microsoft
Apple has a long list of groundbreaking innovative products. The company revolutionized how music is consumed with the introduction of the iPod. Furthermore, both the MacBook and iPad disrupted the personal-computing (PC) market, giving creatives an entirely new way to produce content. And perhaps most importantly, the advent of the iPhone reinvented how people communicate on a daily basis.
Therefore, it’s not surprising that the combination of such a deep and prolific portfolio of products helped Apple become the world’s first trillion-dollar company.
On the other side of the equation is Microsoft. While the company is a pioneer for modern-day computing applications, Microsoft spent many years in Apple’s shadow. The company resorted to a host of acquisitions to drive growth and product innovation.
But in 2014, Microsoft named Satya Nadella as its new CEO. Eerily similar to Cook, Nadella has helped propel Microsoft’s value by approximately tenfold over the last decade.
How did Nadella inspire such robust growth in just 10 years? A close look at the executive’s background will shed some light on how he reinvented the Windows developer.
Image source: Getty Images
A first look at artificial intelligence (AI) in the business
Before taking over as CEO, Nadella led Microsoft’s cloud division. The company recently reported earnings for the second quarter of fiscal 2024, ended Dec. 31. While total revenue increased 18% year over year to $62 billion, the cloud division was the big winner.
One reason why the cloud is becoming increasingly important for Microsoft is its infusion of artificial intelligence (AI) features into the platform. Microsoft is a large investor in OpenAI, the developer of ChatGPT. Over the last year, Microsoft swiftly integrated ChatGPT across its ecosystem — a move that is already paying off in spades.
During the earnings call, Nadella proclaimed, “We’ve moved from talking about AI to applying AI at scale.”
Given that Microsoft Cloud increased 24% year over year to $33.7 billion of revenue in the quarter, I’d say Nadella’s commentary is holding true. But although artificial intelligence (AI) carries some exciting prospects for Microsoft, investors should take a thorough look at the company’s valuation before pouring into the stock.
Should you invest in Microsoft stock?
As of the time of this writing, Microsoft trades at a forward price-to-earnings (P/E) multiple of 36 — well above its 10-year average of 30. By comparison, cloud specialists Amazon and Alphabet trade at forward P/E multiples of 47 and 21, respectively.
While Microsoft stock is right in the middle among its top competition, the stock isn’t exactly cheap. The forward P/E of the S&P 500 is about 22, considerably lower than Microsoft and its cohorts.
I don’t think that the impact of artificial intelligence (AI) is fully baked into Microsoft stock. But this analysis illustrates that investors are placing a premium on the biggest names in AI.
Despite its rich valuation, it is hard to pass up on Microsoft. The company is growing at an impressive rate, and its ambitions with AI are in very early stages. I think the company is well positioned for the long term, and the stock could very well be on its way to new highs. Now could be a good time to use dollar-cost averaging to initiate or add to a position in the stock.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Microsoft. The Motley Fool has a disclosure policy.
Greece has been struggling with forest fires that could not be controlled for 10 days on July 27, 2023 in Rhodes, Greece.
Dia Images | Getty Images News | Getty Images
Scientists on Tuesday confirmed 2023 as the hottest year on record and warned that the planet is now within touching distance of smashing through the critical warming threshold of 1.5 degrees Celsius.
The European Union’s Copernicus Climate Change Service (C3S) said 2023, a year in which one researcher described temperature anomalies as “absolutely gobsmackingly bananas,” was the warmest calendar year in global temperature data stretching back to 1850.
The 12-month period ended with a global average temperature of 14.98 degrees Celsius, almost 0.2 degree Celsius higher than the previous record set in 2016.
Extreme heat is fueled by the climate crisis, the chief driver of which is the burning of fossil fuels.
Scientists at C3S said 2023 was the first time on record that every day within a year surpassed 1 degree Celsius above the preindustrial reference period of 1850 to 1900, while nearly 50% of days were over 1.5 degrees Celsius.
What’s more, the EU’s climate change service said two days in November were found to have surpassed 2 degrees Celsius for the first time ever.
Samantha Burgess, deputy director of C3S, said in a statement Tuesday that 2023 was “an exceptional year with climate records tumbling like dominoes.”
The findings come after repeated warnings in recent years about the likelihood of the world climbing above the aspirational goal of the landmark Paris Agreement.
The 2015 accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels” and calls for countries to take concerted climate action to reduce greenhouse gas emissions to limit global warming.
The importance of the 1.5 degrees Celsius threshold is widely recognized as an indicator of the point at which climate impacts become increasingly harmful for people and the planet.
The world has already warmed by around 1.1 degrees Celsius after over a century of burning fossil fuels as well as unequal and unsustainable energy and land use. Indeed, it is this temperature increase that is fueling a series of extreme weather events around the world.
In a recent episode of “The Rich Dad Radio Show,” financial educator and author Robert Kiyosaki expressed grave concerns about the United States’ financial health.
“America is now bankrupt,” he said. “And the question I want to answer today is how [come] America, at one time reportedly the richest country in the world, is now bankrupt?”
While the U.S. hasn’t legally declared bankruptcy, Kiyosaki’s point underscores the nation’s worsening debt crisis.
As of Nov. 24, the U.S. national debt had reached $33.8 trillion. Guest speaker Jim Clark, CEO of Republic Monetary Exchange, highlighted that actual liabilities, including entitlements, could be as high as $200 trillion.
Fiscal 2023 saw interest payments on this debt rise to $659 billion, marking a 39% increase from the previous year and nearly double the amount in fiscal 2020.
So, how is the famed author protecting his wealth? He’s a strong believer in physical assets. Here are two of his favorites.
Don’t Miss:
Gold and Silver
Kiyosaki, who believes America’s financial troubles began with the abandonment of the gold standard in 1971, advocates investing in gold and silver. He views the precious metals as safeguards against inflation and currency devaluation. The rising industrial demand for silver and the current low prices of gold and silver compared to historical highs make them particularly attractive. He also values the fact that physical gold and silver do not carry counterparty risks, unlike many other investments.
Real Estate
Beyond precious metals, Kiyosaki is a proponent of investing in real estate. He recently claimed to own 15,000 houses, which he leverages as an effective hedge against inflation. Historical data from the Federal Reserve Bank of St. Louis shows that while the consumer price index has risen by 896% since 1963, the median sales price of homes has increased by 2,353.93% and rent by 892%. This indicates that real estate not only keeps pace with inflation but can also exceed it.
Kiyosaki’s strategy aligns with the opportunities available to average investors through fractional real estate investing. This approach allows individuals to invest in shares of income-producing properties for as little as $100, enabling them to benefit from rental income and long-term appreciation without the traditional barriers of high costs and credit requirements.
For investors seeking to protect their wealth in uncertain economic times, Kiyosaki’s approach offers valuable insights into diversification and risk management. It’s important to understand that his investment strategies may not be the right approach for everyone. You should always do your own research and consult with a qualified financial adviser.
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This article ‘The Richest Country In The World Is Now Bankrupt’ — Robert Kiyosaki Says The U.S. Can’t Pay The Interest On Its Debt. Here’s How He’s Protecting Himself originally appeared on Benzinga.com
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