Author: WSTNN

I Created a Stock Motif Yesterday Called Stock Market Crash

Yesterday, June 9, 2017, I created a motif called Stock Market Crash. A motif is a collection of stocks and/or ETFs which you or other people create. It is almost like creating your own exchange traded fund.

I just felt like the market had topped, so I thought this would be a great motif worth creating on Thursday. It turned out to be a good move since it is up today even though the NASDAQ is down 143 points today.

It contains several bearish ETFs in the portfolio which holds such securities as the Direxion Daily Semiconductor Bear 3X Shares New ETF which was up 12.7% today.

Motifs are great because you can invest for as little as $250. For more info on the Stock Market Crash Motif, go here.

 

Warren Buffett’s Berkshire Hathaway Subsidiary’s Bait and Switch Marketing Tactics Halted

Berkshire Hathaway subsidiary’s bait and switch marketing tactics halted by regulator agreement

Insurance Commissioner secures numerous concessions from insurer to protect California businesses from high-risk, deregulated workers’ compensation product

SACRAMENTO, Calif. — After a year of legal wrangling, Insurance Commissioner Dave Jones announced today that the California Department of Insurance has reached a settlement agreement with Berkshire Hathaway subsidiaries to stop the bait and switch marketing tactics used to sell a workers’ compensation insurance product, which led to numerous complaints from employers caught up in the costly and complicated policies.

“This is a significant victory in protecting California businesses from sophisticated bait and switch marketing tactics,” said Insurance Commissioner Dave Jones. “We have gone to the limit of our authority over workers’ compensation insurance products in winning concessions that eliminate oppressive contract terms, such as the insurer requiring arbitration in the British Virgin Islands. The revised product terms include lower rates, improved disclosures, and limiting sale of the product only to companies that can absorb the substantial risks.”

In May 2016, in response to a complaint by a small business owner and after a hearing by an administrative law judge, the commissioner determined California Insurance Company and Applied Underwriters, both subsidiaries of Berkshire Hathaway, were selling a workers’ compensation product with illegal side agreements that modified the obligations of the parties under the policy.

Such agreements, known as Reinsurance Participation Agreements or RPAs, require department review and approval—the Berkshire companies used the agreements without first obtaining the department’s approval.

For example, the RPA did not disclose basic premium information, levied hefty penalties for policy cancellation, failed to disclose required binding arbitration outside the U.S., and obfuscated the methodology for calculating premiums, deposits, or other payments due.

Workers’ compensation insurance was partially deregulated by the legislature in the1990s—as a result, the insurance commissioner has only limited authority overrates and product features.

The department concluded Applied Underwriters was trying to avoid regulatory oversight, as noted in their U.S. patent application where the company described how its patent purports to evade regulatory oversight and ostensibly allows the company to sell a complicated type of policy to smaller businesses, which most states prohibit.

Even the revised products are not appropriate for businesses unable to adequately evaluate the pricing, obligations, and risks of such a complex product.

The department advises any employer considering such a complex product to consult an expert with legal and actuarial expertise in workers’ compensation products.

# # #

Media Notes:

Commissioner’s regulatory authority over workers’ compensation rates is limited to the following:

·         The rates must be sufficient to make sure the companies remain solvent,

·         The rates cannot tend to create a monopoly in the market, and

·         They cannot be unfairly discriminatory.

Workers’ compensation insurers are required to file their policy forms with the department; however, the commissioner has very limited authority over product features.

This case is connected to the Shasta Linen case. Below is information on that case and the related issues:

·         California Insurance Company (“CIC”), Applied Underwriters Captive Reinsurance Assurance Company (“AUCRA”) and Applied Underwriters (“AU”) are subsidiaries of Berkshire Hathaway. Both CIC and AUCRA are indirect subsidiaries of AU. CIC is a workers’ compensation insurer, and AUCRA is a workers’ compensation reinsurer for CIC. AU is not an insurer, but it offers insurance programs through affiliated insurance companies.

·         Shasta Linen is a privately-held, family-owned California corporation in the linen rental business.

·         Applied Underwriters promotes the EquityComp program as a loss-sensitive, profit-sharing plan. It consists of a guaranteed-cost workers’ compensation insurance policy issued by CIC and a “side” agreement, known as the Reinsurance Participation Agreement (“RPA”), that is sold as a profit-sharing plan issued by AUCRA.

·         AU filed a U.S. patent application for the EquityComp Program, known as a “Reinsurance Participation Plan,” in which AU described its patent as a retrospective rating plan, which by law was required to be approved by the commissioner.

·         In the Shasta Linen case, Shasta Linen challenged the validity of the EquityComp insurance program, including the unfiled RPA. CIC asserted that it was not required to file the RPA on the basis that it did not affect the underlying workers’ compensation insurance policy. An administrative law judge heard the case and issued a proposed decision against AUCRA and CIC. The commissioner adopted the decision and held that the RPA modified the underlying workers’ compensation insurance policy sold to Shasta Linen and it should have been filed as required by law. He also found that CIC and AUCRA unlawfully failed to file the rate associated with the RPA.

Shasta Linen – Issues:

·         AU did not provide Shasta Linen with a copy of the RPA until after the inception of the program. Once provided, the RPA obfuscated key details by failing to disclose portions of the formulas it used to calculate rates and other costs.

·         AU used its discretion to assess charges and retain large sums of money for indeterminate periods of time. There was inadequate transparency regarding AUCRA’s methodology for calculating amounts of premiums, deposits, and other payments due.

Benefits of Settlement

·         The RPA was an unfiled product but the insurers conceded that it falls under the commissioner’s oversight and jurisdiction and has to be filed with the Department of Insurance.

·         The settlement includes a dismissal of the writ petition filed by the insures in the Shasta Linen case, and the commissioner’s administrative decision in the Shasta Linen case will continue to stand as a precedent decision. This serves as a warning to other insurers that fail to file with the commissioner, for approval prior to use, any modifications to an employer’s workers’ compensation policy, and those that charge unfiled rates.

·         The settlement includes new disclosures that will provide policyholders with key details regarding the product.

·         The settlement effectively constitutes an acknowledgement that side agreements that modify the obligations of the parties to an insurance policy must be filed consistent with longstanding insurance law. This requirement was clarified in department regulations which went into effect on April 1, 2016, which included a provision that ancillary agreements, such as the RPA in this matter, must be filed and approved before they may be used by insurers.

·         The settlement effectively constitutes an acknowledgement that rates and supplementary rate information must be filed with the department consistent with longstanding insurance law.

Stocks Going Ex Dividend the Third Week of June

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Ameren Corporation (AEE) 6/12/2017 0.44 3.04%
Anadarko Petroleum Corporation (APC) 6/12/2017 0.05 0.40%
Dr Pepper Snapple Group, Inc (DPS) 6/12/2017 0.58 2.34%
HP Inc. (HPQ) 6/12/2017 0.133 2.73%
Public Storage (PSA) 6/12/2017 2 3.60%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Beware of Fake Stock Brokerage Firms

Would you believe that crooks are actually creating fake broker-dealers in order to swindle you out of your money? In the old days, con men would set up real brokerage firms, then either churn your account, push penny stock pump-and-dump stocks on you, or on rare occasions, sell you totally fraudulent tax shelters.

But now, fictitious brokers and investment adviser companies are being created and many have names that sound like legitimate firms.

The Securities and Exchange Commission has a listing of a whole bunch of these scams. One interesting thing to note is that 28 of these firms are from New York, whereas only three are from California.

In the “old days,” most of the scams worked out of Newport Beach and Century City in California. I guess these days, New York adds more legitimacy to an investment company.

In addition to these fake companies, the SEC also provides a list of Unregistered Soliciting Entities Impersonating Genuine and Former US Registered Securities Firms.

Plus, some companies claim to be registered with an “official” United States agencies, that are either fake or pretend to be part of the U. S. Government. This is a list of fictitious governmental agencies.

If you have any doubt about a firm that you are planning on doing business with, check them out.

You can check out brokers and brokerage firms at:

FINRA BrokerCheck

You can check out investment advisors at:

Investment Adviser Public Disclosure website

 

 

Stocks Going Ex Dividend the Second Week of June

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Avery Dennison Corporation (AVY) 6/5/2017 0.45 1.91%
Guess?, Inc. (GES) 6/5/2017 0.225 7.22%
Halliburton Company (HAL) 6/5/2017 0.18 1.58%
Kohl’s Corporation (KSS) 6/5/2017 0.55 5.20%
Southwest Airlines Company (LUV) 6/5/2017 0.125 0.66%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

The Bitcoin ETF that Doubled in 3 Days Last Week

Bitcoin, the first decentralized digital currency, has been on a tear recently, rising from $2,150 on Monday to $2,779 on Thursday, a jump of 29%.

But what has really been spiking is the Bitcoin exchange traded fund, Bitcoin Investment Trust (GBTC). It is an ETF that purportedly represents one tenth of a bitcoin for each share.

The stock skyrocketed last week from a close of $241 per share on Monday to a high of $565 a share during the day on Thursday, May 25. This was an increase of 134%. The stock closed at $477, still a huge increase of 98%.

Both Bitcoin and GBTC dropped on Friday, but GBTC still closed above $400 a share.

For a free list of bitcoin related stocks, go here.

Correction: I believe that GBTC is actually a CEF (closed end fund), not an ETF, although there is not much difference.

Stocks Going Ex Dividend the Fifth Week of May

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Goldman Sachs Group, Inc. (GS) 5/30/2017 0.75 1.39%
Interactive Brokers Group (IBKR) 5/30/2017 0.1 1.15%
Schlumberger N.V. (SLB) 5/30/2017 0.5 2.78%
Tyson Foods, Inc. (TSN) 5/30/2017 0.225 1.54%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Amazon Will Provide Everything Except Wash your Windows: Wait, They Do That Too! Really!

You need your windows washed? Go to Amazon. Is your toilet plugged up? Go to Amazon. Need your house painted? Go to Amazon. What? You haven’t heard of Amazon Home & Business Services? Yes, they do all that and more, including cleaning your house, setting up your home theater, or assembling your furniture.

So if you have been wondering why Amazon (AMZN) stock has been rising so much, grossly outperforming the S&P 500 over the last year by more than double, now you know why. They are taking over the lawn mowing business.

But seriously, many investors believe that Amazon is all about Amazon Web Services, commonly referred to as AWS, which is the company’s cloud computing division. And it’s true. AWS revenues have jumped 55% year over year, but still only provides 9% of overall revenues. However, AWS does provide 74% of operating income currently.

Amazon is much more. It is creeping (in a good way) into everyone’s lives. It’s not just the books, and the vitamins, and the clothes, and the watches. Amazon markets just about any product you can think of. (A few years ago, there was a way you could even order marijuana through Amazon, but that’s for another article.) Plus, the intangible growth is enormous, whether it’s music, eBooks, or movies.

Amazon has its CreateSpace division, which allows anyone to quickly publish their own book for free. But now the company is pushing self-produced movies and TV shows. These aren’t the company produced Amazon Originals like Bosch, these are the individual produced shows that anyone can create and have Amazon market for them, with a choice of how to receive revenues. An example of this is the show Private Sales, a TV show about an escort service in the beach cities area of Los Angeles.

In terms of the company’s financials, net cash flow has grown $4.180 billion in 2012 to $16.443 billion for 2016. This is a 41% increase per year on average. Not too shabby.

But what about the losses? The company has generated negative income in two of the last five years, and the net income it has generated hasn’t been that great, giving the stock a trailing price to earnings ratio of 187. Of course! The lower your net income, the lower you pay in taxes. Once money is paid out in taxes, that money is gone. The company has been smart enough to spend funds on employee wages, research and development, plants, equipment, and other tax-deductible expenditures that will help the company grow, keep net income low, and taxes low.

Back in 2007, I wrote an article about how Amazon is a Screaming Buy at 38.10 per share. I didn’t buy the stock at the time but I should have taken my own advice, as the stock took off and never looked back.

Disclosure: Author now owns AMZN.

The Twitter Annual Meeting

Me & Jack Dorsey, Twitter CEO
Me & Jack Dorsey, Twitter CEO

The Twitter Annual Meeting was held yesterday at the Twitter headquarters in San Francisco on Market Street. Jack Dorsey, the CEO, spoke about the goals for the company.

Areas covered were:
Improving Timeline
Notifications
Safety, with regard ti transparency, better tools, and deep learning & machine learning

Dorsey talked about three major improvements:

  1. Twitter Lite – for Safari or Chrome on mobile devices
    30% faster load times
    Uses less than 1 meg of data
    Looks identical to the app
    Can turn on Data Saver – all images, videos, gifs blurred
    Reduce data usage by 70%
  2. Explore tab -brings everything together
    Trends, Moments, Live Events
  3. Mute – Safety control
    Notifications -muted words -pause and not see

Anthony Noto, Twitter’s CFO, then spoke. He talked about the Live Streaming Video and expansion into:
Sports
News
Entertainment
ESports

He said that in Q1, there was 800 hours of live video content, over 450 events, with more than 200 premium content partners.

All the shareholder resolutions passed except the one that proposed that Twitter become a user owned company. The proposal said:

“A community-owned Twitter could result in new and reliable revenue streams, since we, as users, could buy in as co-owners, with a stake in the platform’s success. Without the short-term pressure of the stock markets, we can realize Twitter’s potential value, which the current business model has struggled to do for many years. We could set more transparent accountable rules for handling abuse. We could re-open the platform’s data to spur innovation. Overall, we’d all be invested in Twitter’s success and sustainability. Such a conversion could also ensure a fairer return for the company’s existing investors than other options.”

The questions and answers were related to looking into a Twitter Prime type service where some users could pay for a premium service, and utilizing artificial intelligence through machine learning and deep learning for timelines and notifications.

Stocks Going Ex Dividend the Fourth Week of May

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Applied Materials, Inc. (AMAT) 5/23/2017 0.1 0.89%
Nokia Corporation (NOK) 5/24/2017 0.127 4.61%
CSX Corporation (CSX) 5/26/2017 0.2 1.41%
QUALCOMM Incorporated (QCOM) 5/26/2017 0.57 3.79%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.