Economist Ted Bauman of Atlanta, Georgia, is the editor of The Bauman Report. He shares his perspectives in this monthly publication when it comes to economic trends, protecting wealth and privacy, safely growing a financial portfolio, and international immigration. He spent most of his working career in South Africa but returned to the United States in 2008.Over the summer of 2018, Ted Bauman wrote an article about Amazon and why shareholders should have some concerns. In this article, he related the story of Steve Jobs and Apple. Steve Jobs released the iPhone in 2008 and it changed Apple’s focus and the entire business investment world. The iPhone is by far the most popular smartphone around the globe and generates 75 percent of Apple’s annual revenues.
The iPhone gave Apple the power of a monopoly when it comes to mobile devices, Ted Bauman explained in his article. They now have an entire ecosystem of products and services that have made millions of people feel locked into. It was the first company to ever exceed $1 trillion in value.Jeff Bezos of Amazon is now serving in a similar business leadership capacity as Steve Jobs had. This company is worth over $560 billion and just about every product imaginable is sold on Amazon. About 90 million people are Prime members and many only shop at Amazon when buying something online.
Ted Bauman wrote that, despite this success, Amazon doesn’t have monopoly powers like Apple continues to enjoy. He wanted to warn shareholders of Amazon in his business article about some vulnerabilities in this company he saw. Retail experts say that around half of everything sold on the internet will be bought through Amazon within three years. He says this just isn’t so.As he points out, Walmart generates three times as much annual revenue as Amazon does. Even the Kroger chain of supermarkets outpaces Amazon when it comes to income. Right now Target, Walmart, Apple, Macy’s, and eBay control 56% of all e-commerce. Amazon is a big company, Ted Bauman says, but it certainly is no monopoly.
The stock market has taken investors on a wild ride throughout 2018. A market that had featured historically low volatility for the previous two years has seen volatility and all of its nasty effects come roaring back. At the same time, the market was in negative territoryfor the year as late as the 10th month of the fiscal year, representing a level of underperformance that hasn’t been seen in a decade and possibly signaling the end of the bull market.
But Shervin Pishevar, one of the most prominent venture capitalists in the world today, says that this development is not the slightest bit surprising. In fact, Shervin Pishevar had predicted way back in February that the stock market would ultimately end up lower in 2018 that it had begun. Shervin Pishevar has consistently been sounding the alarms against the Fed’s open market operations and the consequences that such actions have had both on the equity and bond markets. He says that the can-kicking policies of the Federal Reserve have made the current economic situation worse than it would have otherwise been. Investors now face a situation where their current bond portfolios could soon lose massively at the same time that equities plummet.
Stocks are historic overvaluations
Shervin Pishevar says that the stock market hasreached a point of historic overvaluation. This has been heavily and directly influenced by the policies of the nation’s central bank. Through driving interest rates and bond yields through the floor, the Fed has encouraged massive levels of corporate stock buybacks.
At the same time, it has forced investors to chase yields wherever they can be found. In this case, investors have piled into equities, driving the prices of the U.S. equity markets through the roof. Pishevar says that this will eventually cause an inevitable correction as bonds begin to rise. But this will spell double trouble for those who currently own both bonds and stocks.
Current bonds, with their extremely low yields, could lose a great deal of value just as equities are also crashing. Pishevar says that this could cause a great deal of pain among investors in the months to come.
Bitcoin may be experiencing some issues, but according to financial experts like early Uber investor Shervin Pishevar, it may be headed for an upswing soon. While he predicts that the United States economy will fall a drastic amount, he still holds hope for the global economy. According to Shervin Pishevar, the United States’ tradition of isolationism will be largely responsible for the economic collapse.
Inflation is running rampantaccording to Pishevar. While the US may have been able to conceal just how bad it is becoming by essentially exporting the inflation elsewhere, the truth will soon be revealed. These predictions were released to the public by Shervin Pishevar during 50 consecutive Tweets. The 21-hour marathon that took place in February was the first that he had been seen on social media since December 2017. Truly a man of many words, these Tweets surprised even his closest followers.
While Bitcoin has been in the news lately for its substantial drop in price, Shervin Pishevar sees this turning around once the economy crashes. He believes that they will stay stable between the $2k and $5k mark before starting to rise steadily over 2 years. He also sees good things for the price of gold and expects it to rise as well. So while the Uber investor does have predictions indicating that the market will drop by thousands of points, he does see opportunities to see returns even before the economy rebounds.
In the case of Facebook, Mark Zuckerberg admitted to using the data collected from users in an inappropriate way that was not agreed to. These types of abuses of power are quickly causing users to start losing their trust and potentially discontinuing the use of their services. Apple has also been in hot water over allegedly slowing down iPhones to encourage the purchase of newer models.
Since Shervin Pishevar released his Tweetstorm, his predictions have begun getting second looks by experts in the financial industry. Only weeks after his posting, the stock market did see a significant drop. With all of the similarities between reality and his predictions, his Tweetstoem may not be that far off from the truth.