What we’re reading (2/20)
“The Stock Market Is Lower Priced, But It Isn't Cheap” (Briefing.com). “The stock market is sporting its lowest forward 12-month P/E multiple in nearly two years, yet that doesn't necessarily mean that it's ‘cheap.’ On the Contrary[,] [w]hen 2022 began, the S&P 500 was trading at 21.3x forward 12-month earnings. Today it trades at 19.2x forward 12-month earnings. Sounds like a nice discount, yet it is still a premium to the 5-year average of 18.6x and the 10-yr average of 16.7x.”
“Mohamed El-Erian Details ‘Fundamental Change To The Marketplace’ As The Fed Moves” (Yahoo!Finance). “‘When... the most reliable buyer with its own printing press and an incredible willingness to buy – when they step out of the market, that is a fundamental change to the marketplace,’ Mohamed El-Erian, president of Queen’s College at Cambridge University and Chief Economic Advisor at Allianz, told Yahoo Finance Live this week…‘So it shouldn't come as a surprise that [stock prices] are lower, because $120 billion a month of asset purchases are disappearing.’”
“Members Of Congress Should Not Be Trading Stocks, Ever” (New York Times). “It has been a decade since Congress last made a significant effort at policing itself in this area. The Stock Act of 2012, among other measures, made it illegal for lawmakers to trade based on access to nonpublic information. The reforms were well intentioned but inadequate. In practice, there are too many legal shades of gray. A clearer, brighter line needs to be drawn.”
“Carl Icahn Nominates Two To McDonald’s Board” (Wall Street Journal). “At issue is McDonald’s suppliers’ use of so-called gestation crates, which are small cages used to constrain pregnant pigs. In 2012, McDonald’s pledged to stop buying pork by 2022 from producers who use the crates. Few knew at the time that Mr. Icahn quietly had pushed for the changes behind the scenes. Now, 10 years later, Mr. Icahn and the Humane Society are arguing that McDonald’s failed to follow through and changed its interpretation of the pledge. McDonald’s now often has its producers move pigs out of the containers only after confirming they are pregnant, which many wait to do so until the sows are four to six weeks into their 16-week pregnancies.”
“Family Behind Fatburger Under Investigation For Alleged Fraud, Money Laundering, Records Show” (Los Angeles Times). “Federal authorities have been investigating Andrew Wiederhorn, chief executive of the company that owns the Fatburger and Johnny Rockets restaurant chains, and examining one of his family member’s actions as part of an inquiry into allegations of securities and wire fraud, money laundering and attempted tax evasion, court records show.”
