What we’re reading (8/13)
“Silver Vs. Gold: How The Two Metals Compare As Investments” (Wall Street Journal). Liquidity (gold more liquid), volatility (silver more volatile), diversification (gold less correlated with other asset classes because silver actually has industrial uses and therefore follows the business cycle, to an extent), storage costs (gold storage less expensive, because gold priced much higher per troy ounce).
“Reading The Dollar Doldrums” (Project Syndicate). More from ex-IMF/ex-PIMCO/current Allianz economic chief Mohamed El-Erian. “As for the dollar’s role as a reserve currency, I am reminded of a simple principle I learned at university: it is hard to replace something with nothing. At this time, there simply is no other currency that can or will fill the dollar’s shoes. Instead, we will continue to see small pipes being built around the dollar. And, because none of these will be large enough to replace it, the eventual result will be a more fragmented international monetary system.”
“Apple And Tesla Just Announced Stock Splits. Here’s What That Means For Your Investments” (CNN Business). Some banker out in the Valley is having an absolute field day recommending splits—which, in theory, should have little to no impact on the actual fair value of a share—to some of the world’s biggest companies that, for whatever reason, are actually paying for this asinine advice (it’s particularly surprising in a world where platforms offering fractional share purchases are increasingly ubiquitous, so you don’t need a low price/share to get retail investors biting on the stock).
“On McDonald’s And Morality” (Dealbook). More on this McDonald’s saga, which was on our reading list a few days ago. “In its complaint, McDonald’s goes out of its way to justify its original investigation and the decision to fire Mr. Easterbrook without cause. Directors took the former C.E.O. at his word, and their investigation concluded that his conduct did not clear the ‘high bar’ set out in its definition of cause. At the time, it was best for the company to terminate him ‘with as little disruption as possible,’ it said.” SPC’s view: indeed, maybe it’s time to stop paying CEO’s—who are largely replaceable—gargantuan sums of shareholder money and then just taking their word when they run off with said sums of money that the actual facts underlying their departure are all on the up and up.
“How To Fix The USPS Financial Crisis” (The Onion). A few fun suggestions for shoring up USPS’s finances. Our favorites: “Ask God for permission to start delivering on Sundays”; “Stop being such candy-asses about mailing hazardous reptiles”; “Consider appointing a postmaster general without millions in FedEx stock”; “Rename post offices after Confederate generals to interest Republicans in protecting them.”
