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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Minimizing Tesla exposure
    Here's excerpts from a current article from the San Francisco Chronicle. It seems to be more bad news for Tesla.
    An 8-vehicle crash on the Bay Bridge last month that left several people injured may have been triggered by a Tesla’s “full self-driving” suddenly coming to a stop, CNN reported.
    The wreck, which occurred at 12:40 p.m. Thanksgiving Day, started when a vehicle slammed into a wall, which caused up to five cars to pile up in the Interstate 80 tunnel through Yerba Buena Island. Ambulances had to rush two injured people to hospitals and two lanes remained closed for over an hour, snarling trafic on the eastern span of the bridge.
    According to a traffic crash report obtained by CNN, the driver of the Tesla told the California Highway Patrol that they were traveling at about 55 miles per hour and shifted into the far left lane when the vehicle’s “full self-driving” abruptly braked.
    California Highway Patrol officers reviewed videos that showed the Tesla switching lanes and then slowly coming to a stop, CNN reported.
    The National Highway Traffic Safety Administration said Thursday it will send a team to investigate the crash, the Associated Press reported.
    Odd that it's taken the NHTSA almost a month to decide to "investigate". I suppose that if the vehicle hasn't been tampered with there would be residual information in the computer memory.
  • Vanguard Short-Term Tax-Exempt Fund to change name
    This is interesting. If more fund companies create (or change to) ultra-ST muni, M* may have to introduce a new category. Right now, M* has only ST muni with < 4.0 duration.
    M* does have taxable ultra-ST (duration < 1.0) and ST (duration 1.0-3.5).
    Vanguard ST muni VWSTX/ VWSUX has duration 1.1. For now, only the name will change to Ultra-ST Muni, not the objectives.
    Vanguard also has limited-term muni VMLTX/ VMLUX with duration 2.6 (I do own it). After some time, Vanguard may just relabel it to ST Muni.
    I think that this is good streamlining.
  • Microsoft-Activision deal: Gamers sue to stop merger
    Strange lawsuit on behalf of individual game-players.
    Of course, there is the lawsuit by the FTC. MSFT is hoping to make deals with other game-makers (Sony, etc) and convince the FTC and/or the court to clear the merger.
    Almost 20% discount in ATVI price from $95 deal price shows substantial uncertainties in the outlook for the merger.
    https://stockcharts.com/h-sc/ui?s=ATVI&p=D&b=5&g=0&id=p34856353424
  • Vanguard Short-Term Tax-Exempt Fund to change name
    https://www.sec.gov/Archives/edgar/data/225997/000168386322007930/f23876d1.htm
    497 1 f23876d1.htm SHORT-TERM TAX-EXEMPT FUND PS 045A
    Vanguard Short-Term Tax-Exempt Fund
    Supplement Dated December 22, 2022, to the Prospectus and Summary Prospectus Dated February 25, 2022
    Important Changes to Vanguard Short-Term Tax-Exempt Fund
    Fund Name Change
    Effective on or about February 28, 2023, Vanguard Short-Term Tax-Exempt Fund (the Fund) will change its name to Vanguard Ultra-Short-Term Tax-Exempt Fund.
    The Fund's investment objective, strategies, and policies will remain unchanged.
    © 2022 The Vanguard Group, Inc. All rights reserved.
    PS 045A 122022
    Vanguard Marketing Corporation, Distributor.
    Vanguard Municipal Bond Funds
    Supplement Dated December 22, 2022, to the Statement of Additional Information Dated February 25, 2022
    Important Changes to Vanguard Short-Term Tax-Exempt Fund
    Fund Name Change
    Effective on or about February 28, 2023, Vanguard Short-Term Tax-Exempt Fund (the Fund) will change its name to Vanguard Ultra-Short-Term Tax-Exempt Fund.
    The Fund's investment objective, strategies, and policies will remain unchanged.
    © 2022 The Vanguard Group, Inc. All rights reserved.
    SAI 045A 122022
    Vanguard Marketing Corporation, Distributor.
  • Guggenheim partners announces the untimely and unexpected death of Scott Minerd
    A most insightful fixed income individual. I recently watched him on Bloomberg, and gave a lot of attention to his observations of the fixed income arena. An original thinker who spoke his mind and helped a novice investor understand the complex fixed income market place.
    Many have lost an excellent teacher, and I include myself.
    He passed yesterday afternoon of a heart attack during a normal workout routine.
    Scott Minerd
  • IHME Covid model for China. China's ability to function properly has global impacts.
    China's ability to function properly, as an economy, has global impacts; be it the production of medical based products, electronic devices or the numerous other consumer products sold around the globe. The ability to produce, also may impact commodity based imports/pricing.
    A massive Covid infection in China will not be good for anyone.
    IHME indicates a serious potential for a high Covid death rate in China. IHME was a major supplier of data from the beginning of Covid in the U.S.
    What is IHME?
    The Institute for Health Metrics and Evaluation (IHME) is an independent global research center at the University of Washington in Seattle, with a mission to measure the world's most pressing health problems and to evaluate the strategies used to address them.
    The Institute for Health Metrics and Evaluation (IHME) is a research institute working in the area of global health statistics and impact evaluation at the University of Washington in Seattle.
    IHME was launched in June 2007 based on a core grant of $105 million primarily funded by the Bill & Melinda Gates Foundation.
    IHME / China Covid related links/articles
  • AAII Sentiment Survey, 12/21/22
    For the week ending on 12/21/22, bearish remained the top sentiment (52.3%; very high) & bullish remained the bottom sentiment (20.3%; very low); neutral remained the middle sentiment (27.4%; below average); Bull-Bear Spread was -32.0% (very high). Investor concerns: Inflation (moderating but high); supply-chain disruptions; recession (2023?); the Fed (slower pace but higher rates longer); dollar (reversing); crypto ice-age; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (43+ weeks; Zelenskyy in DC); geopolitical. For the Survey week (Thursday-Wednesday), stocks were down, bonds down, oil up, gold up, dollar flat. #AAII #Sentiment #Markets
    https://ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=8&scrollTo=872
  • Minimizing Tesla exposure
    Added more tsla, 15% trading acct portfolio in tsla. Hold long terms hope 2.5 X - 3.5X by then or start selling once reach $600s $650s 700$s rsi 75 and maybe running out of steams. Keep monthly cover call 20-25 deltas of strike prices til then, very good monthly premiums. By spring 23 TSLA maybe turnaround (hope stock come to fruition and yield good Er RESULTS and stock prices probably much improved. ) at least Elon learnt mistakes and looking for twitter ceo (I would too if lost 65 70% $ of my assets lol, be quiet and focus on my work instead sending mean tweets) .
    RSI now 14s extremely attractive. Friend been trading Tsla over past 8 yrs sold most everything and bought lots Tsla (80% portfolio in tsla now. Crazy swing trader)... Fwiw
  • Minimizing Tesla exposure
    And now this, from a current report in the San Francisco Chronicle:
    Layoffs keep coming with Tesla reportedly cutting jobs next quarter
    Electric car maker Tesla will reportedly freeze hiring and go through a fresh round of layoffs as job cuts at marquee companies small and large, including Twitter and Meta, have roiled a range of tech companies across the Bay Area.
    Electric car blog Electrek first reported the story.
    The cuts will reportedly come next quarter. Tesla did not respond to an emailed request for comment, and has not had a media department for some time. It wasn’t clear which departments or locations could be affected.
    The company moved its headquarters from Palo Alto to Austin, Texas last year, but still has offices in the Bay Area and a large manufacturing facility in Fremont that employs around 10,000 people.
    Tesla’s stock has trended down recently, dipping since CEO Elon Musk took over the social media site Twitter earlier this year. Despite topping $300 per share in the fall, shares had dropped below the $140 per share mark as of Wednesday.
    Tesla investors have taken to Twitter in recent days to criticize the company and for Musk appearing to spend little time recently running the electric car maker since his turbulent takeover at Twitter.
    Musk told Tesla investors on an earnings call in October that demand for the company’s electric vehicles was strong and that the company expected to sell every car it produced well into the foreseeable future.
    The company reported revenues of $21.5 billion during its most recent quarterly report, slightly below Wall Street expectations.
    The company has continued to tell investors it expects to increase vehicle deliveries by around 50% each year.
  • They never stop trying: Wells Fargo to pay $3.7B over consumer law violations
    Following is the complete text from a current newsletter by Matt Levine, who writes the "Money Stuff" column for Bloomberg. The newsletter is free, so there should be no issue with it's reproduction here.
    If you would kike to subscribe to this free newsletter from Matt Levine, here is the link.
    Oh Wells Fargo
    I think often about the time I wrote:
    If you have U.S. dollars in a bank account at JPMorgan Chase & Co., and I have U.S. dollars in a bank account at JPMorgan Chase & Co., and I want to send you 100 of my dollars, what we do is I tell JPMorgan to subtract 100 from the number of dollars in my bank account and add 100 to the number of dollars in your bank account. This gets dressed up in a lot of procedures, because it would be bad if JPMorgan got the math wrong or if it moved money from one account to another without getting the proper authorizations, but as a matter of, like, computer science, it is dead easy. JPMorgan keeps a list of people and how many dollars they have, and you and I both trust JPMorgan to keep that list (that’s what it means that we bank there!), and so we just tell JPMorgan to update the list to reflect the transaction between us.
    And lots of computer engineers tweeted and emailed to be like “no, actually, it is a hard problem of computer science to have a big database of who has what, and to update it instantly and reliably to reflect transactions from many different sources.” And I was like, sure, fine, I guess. I still feel like I was entitled to be right: A bank is, at its heart, a computer for keeping track of who has money, and for updating its ledger as people send and receive money. And at a high level you and I could describe how we’d expect that computer to work — “if I deposit $100 in an ATM, the bank will increase the number in my account by $100,” that sort of thing — and we will be disappointed if it doesn’t work that way, if the bank loses track of who has the money or how much they have, or if it doesn’t update its ledger promptly or process transactions in the right order. If the bank messes up and says “look I am sorry but keeping track of money is a hard job and you can’t expect us to do it with 100% accuracy,” we will say things like “yes we can” and “that is literally exactly what we expect of you” and “if keeping track of the money is too hard for you then maybe you should not be a bank” and “now you have to pay an enormous fine.” And yet, sure, empirically, banks do sometimes mess it up. It’s not as easy as it sounds.
    Wells Fargo, for instance, messes it up a lot:
    The Consumer Financial Protection Bureau (CFPB) is ordering Wells Fargo Bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines. The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes. Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank. Wells Fargo also charged consumers unlawful surprise overdraft fees and applied other incorrect charges to checking and savings accounts. Under the terms of the order, Wells Fargo will pay redress to the over 16 million affected consumer accounts, and pay a $1.7 billion fine, which will go to the CFPB's Civil Penalty Fund, where it will be used to provide relief to victims of consumer financial law violations.
    Here is the CFPB’s consent order from yesterday, which is basically just a litany of “Wells Fargo’s computers messed up.” For instance:
    Respondent also assessed borrowers erroneous fees and interest because of technology, audit, and compliance failures. As an example, from at least 2011 until at least March 2019, Respondent sometimes incorrectly entered the effective date of a payment deferment in, or omitted it from, its servicing system-of-record, which resulted in $26.5 million in erroneously assessed late fees to more than 688,000 borrower accounts.
    If you owe Wells Fargo money on a car loan, and you don’t pay it, and you have a payment deferment, they won’t charge you a fee, but if you don’t have a payment deferment they will. But if you have a payment deferment, but they don’t write it down in the right place, they will also charge you the fee, and then they will get in trouble. In some sense this is profit-maximizing behavior by Wells Fargo: If they agree to defer payments, and then charge you the fees anyway, they will make more money in fees. But it doesn’t seem intentional, and the CFPB doesn’t think it was. (Why say you agree to the deferment, and then charge the fees?) It seems like a failure of systems, of “technology, audit and compliance”: Wells Fargo did not do a good job of keeping track of deferments, so it sometimes charged fees by mistake.
    Or:
    From at least 2011 through 2022, Respondent experienced other types of servicing errors, which had the potential to contribute to a borrower’s delinquency, and in some cases led to improper repossessions. For example, Respondent repossessed vehicles despite the borrower having made a payment or entering into an agreement to forestall the repossession.
    (Continued)
  • Barron’s Article: Higher Medicare Premiums / How to Contain Them / Investing Tactics
    Medicare beneficiaries with an IRMAA who meet certain criteria can request that we make a new initial determination of their IRMAA.
    NOTE: The original IRMAA decision takes effect and continues until we make a new initial determination. If we make a new initial determination in the beneficiary’s favor, we retroactively refund the excess IRMAA amount paid.
    https://secure.ssa.gov/poms.nsf/lnx/0601101050
  • Miller Opportunity Trust to change name and manager change
    "Where are the customers' yachts"
    I seem to recall Mr Miller was touting that Amazon was 50% of his investible net worth and he as big on Bitcoin as well several months ago....but I don't think he is wondering how he is going to afford groceries next week either.
  • Minimizing Tesla exposure
    @Gary1952 Although Zuckerberg is not as erratic as Musk and not making toxic statements to tarnish Meta’s brand on a daily basis, many ESG funds have actually minimized or eliminated their exposure to Meta because of its ethical problems; https://medium.com/the-esg-advisor/most-sustainable-funds-sidestepped-the-meta-plunge-40c0f7b90560
    I would also say that Meta has a better—from an investor’s perspective— more monopolistic product that Twitter and Tesla. Meta has an entrenched massive user base whose entire social life is wrapped up in its platform, making it much harder to leave than Twitter, which allows much smaller tidbits of communication. It is also far more entrenched than Tesla, which has a luxury product consumers can take or leave easily. A company like Tesla really can’t afford to offend its wealthy prospective customers. Frankly, I think Zuckerberg could if he chose get away with a lot more erratic behavior than Musk because of the product he’s selling. Yet he too is viewed as a problematic CEO to many ESG investors and just as entrenched in his leadership.
  • Barron’s Article: Higher Medicare Premiums / How to Contain Them / Investing Tactics
    You can reduce your IRMAA if you income falls below the threshold the next year by filing a form with social security.
    However, you have to have filed your income tax for the year before to use that for the data, so the earliest you can ask for a reduction is probably April. By the time it is reviewed and granted, you will have probably paid 50% of the higher amount. I don't think they will make it retroactive for the months that have gone past.
  • Minimizing Tesla exposure
    @BenWP @LewisBraham
    Since October first, BRTRX has sorta decoupled from TSLA ( after marching in lock step for years) , down 17% vs TSLA -48%, so it looks like Baron has trimmed the TSLA exposure to less than 50% reported at the end of September. But he probably still owns huge amount
    While TSLA cars are apparently quite innovative, I do not think you can use it's previous growth rates as an indicator of what the future might hold. TSLA share of EV market has been declining, especially if you look at non luxury cars ( under $50,000)
    https://electrek.co/2022/11/29/tesla-owns-us-ev-market-but-losing-market-shares-data/
    The major safety problems with fires etc, the impossibility of autonomous driving anytime soon all are a concern. Would you put a TSLA battery in your house for energy storage? What if it caught fire?
    It is hard to quantitate the impact Musk's behavior has on sales and the stock, but it can't be popular on Wall Street and with major banks. Who in their right mind would lend this guy money?
    Maybe the problems are factored into the stock price, but how can you possibly know what the next shoe to drop from Musk will be ?
  • Barron’s Article: Higher Medicare Premiums / How to Contain Them / Investing Tactics
    Even at the highest IRMAA, the Medicare premiums are subsidized. The basic Medicare premium is really a great deal, but we do pay for it partially via payroll taxes.
    The Medicare premium is applied to Part B coverage (care providers) only. As you wrote, it covers roughly 25% to 85% of the cost of the insurance, depending on IRMAA. Most of the rest comes from general tax revenue, not payroll taxes. Part B is subsidized coverage.
    Part A expenses (hospitals and skilled nursing facilities) are covered almost completely (90%) by payroll taxes. No premiums. (A small number of people pay an additional premium for Part A coverage; those who elect to receive coverage but have not paid into the system for at least 40 quarters.)
    Whether that is a subsidy is a matter of opinion. Just as I would not call Social Security (funded by payroll taxes) subsidized, I do not consider Part A subsidized.
    Part D, like Part B, is largely (3/4) paid for with general tax revenue.
    https://www.kff.org/medicare/issue-brief/faqs-on-medicare-financing-and-trust-fund-solvency/
  • New Harbor ETF: OSEA
    HAINX did well with Castegren, but after he was gone, Harbor stuck with Northern Cross for another seven years (2011 - 2018). Harbor wasn't quick to pull the trigger here, as outflows and poor returns piled up.
    The firm was axed from the fund following what Harbor referred to as ‘a sustained period of underperformance.’
    The fund had lagged its benchmark, the MSCI EAFE NR, in every calendar year from 2013 to 2017, according to Lipper data, although was ahead for the year [2018] at the time of the termination.
    ...
    The fund had also experienced outflows with investors pulling money in every quarter from the last three months of 2014 onward. In total, over that time to the end of Q2 2018, the fund suffered net outflows of $28.9 billion, according to data from Lipper.
    https://citywire.com/pro-buyer/news/boston-pm-shuts-shop-months-after-losing-20bn-subadvisor-spot/a1188410
    Harbor similarly stuck with PIMCO as manager of HABDX for seven years after Gross left in 2014. Here that perseverance made sense. Despite the outflows, the fund turned in solid if not earth-shattering performance over that period.
    The fund suffered heavy outflows in October 2014 following Gross’s abrupt exit from Pimco and has seen money leave in the vast majority of months since then. Over the last five years [through 2021], it has returned an annualized 4.43%, ahead of the Morningstar Intermediate Core-Plus Bond category average 4.12% and the Bloomberg US Universal’s 4.0%.
    https://citywire.com/pro-buyer/news/harbor-drops-pimco-from-1-6bn-bond-fund/a1592923