Tuesday, April 29, 2014
Bank of America (BAC) announced that it would halt plans to buy back its stock and would not increase its dividend. The change was because BAC found an accounting mistake that reduced its capital by $4 billion. Because of banking regulations, BAC has to receive approval from the Fed to increase dividends or repurchase stock. In a previous attempt to increase dividends, the Fed miscalculated BAC's capital. As you would expect, the news affected the stock price, with a drop of over 6 percent on the day.
Wednesday, April 9, 2014
A 6th grade class from Fargo, North Dakota, recently trounced the competitors in a stock picking competition that included groups from major universities. The students' portfolio included many companies that were familiar to them, including Netflix, Starbucks, and Under Armour. The 6th graders' portfolio had a return of 22 percent since creation, outpacing the McIntire Investment Institute's 18.5 percent return. Maybe these students will be the future Warren Buffett or Peter Lynch. Then again, as one student said, "I think it was sheer luck."
Wednesday, April 2, 2014
At the end of 2013, nonfinancial U.S. corporations held $1.64 trillion in cash, a 12 percent increase from 2012. Apple's cash hoard reached $158.8 billion, or about 9.7 percent of all corporate cash assets. Additionally, U.S. based multinationals have $1.95 trillion outside of the country. Much of the increase in international cash balances was driven by Microsoft, Apple, and IBM.