It appears that socially responsible investing (SRI) is affecting at least some oil companies. Five of the largest six banks have decided that they will no longer finance drilling projects in the Artic. As renewable energy becomes more widely used, oil and gas reserves may become less valuable. At the same time, since bank financing appears to be drying up, financing for the industry becomes more difficult to obtain.
So how hard is it to beat the market? From 1993 to 2008, the portfolio managers of Harvard’s endowment fund beat the S&P 500 by almost five percent per year. A major contributor to that performance was a hugely successful investment in timber. Since then, things have not been so rosy (or even Crimson). Using the analysis in the article, the Harvard endowment fund has underperformed a blended portfolio of stocks and bonds by one percent per year over the past 20 years. Based on the current endowment value of $42 billion, this means the endowment potentially lost out on $420 million in growth per year, or roughly $8.4 billion dollars of growth over this period. It is tough for the best and brightest to beat the market.
In 2017, Austria issued 100-year bonds with a paltry yield of 2.112 percent. But recently, the country issued more 100-year bonds with the unbelievably low yield of .88 percent! And the issue was four times oversubscribed, meaning investors were willing to buy four times the amount of bonds than were being offered. Given the ultra-low interest rate environment, investors appear to be taking risks too attain any positive yield. For example, half of the German government debt has a negative yield, and the yields on Austrian government debt with less than 20 years to maturity are negative as well.
Palantir Industries, the data-mining company owned by billionaire Peter
Thiel, went public this week. But take note, if you buy stock in the
company you will have virtually no say
in the company's operations. Thanks to super-voting shares, Thiel and
two other co-founders will retain voting control in perpetuity. Other
Silicon Valley companies like Alphabet, Facebook, and Snap have similar
voting structures. As Ohio State professor Michael Weisbach notes,
"They set it up so Peter Thiel can still sort of run it like a private
company and still have the advantage of being public." The three
co-founders will retain 49.99 percent of the voting power in the company
regardless of the number of shares owned.