By: Economic & Finance Report

Uber the rideshare tech company, its stock tanked on its first official trading day on the NYSE, Friday, May 10, 2019 will be a day of turmoil on the Uber corporate calendar. It was a horrible trading day for the mammoth ride sharing tech company.

Uber declined close to 8% during the stock market trading day. The stock plummeting so much (in which it did), is the first time any stock has come out the gates on Wall St and lost so much market share. The valuation of Uber was at $76 billion dollars, when analysts had predicted that it would be valued around $90-$100 billion dollars, well that didn’t happen. Not only that, Uber has been bleeding money and the perception is that, Uber won’t actually make any real money until the year 2024, hopefully.

Uber being one of the biggest IPO companies probably since Alibaba, Facebook and a few others. So it to falter as it did was a shocker to some and to others, not so much. Technology companies tend not to fare well in the beginning of their IPO presence. Facebook had a rocky start coming out the gates and other big tech companies before it, have gone through similar revelations.

It’s the test of time that will dictate the longevity of Uber’s existence and if they can navigate their ship in theses rough and turbulent stock market waters. -SB


By: Economic & Finance Report

Every year there is a study of the top best stock exchanges in Africa. Last year’s (2016) study was conducted by Jamelle Cole, CFA, CPA for Relentless Investment Research.

Mr. Cole’s analysis included indicators such as trade data, historical dividends, company evaluation/information, and trading hours by their respective exchanges.  Each category for each trading exchange; the highest number they could possibly accumulate was a 5.

The top 10 stock trading exchanges in Africa that made the list for 2016 (last year) in numerical order, were countries such as:

  1. CSE (Casablanca Stock Exchange) (Morocco)
  2. ZSE (Zimbabwe Stock Exchange) (Zimbabwe)
  3. NSE (Nigerian Stock Exchange) (Nigeria)
  4. LuSE (Lusaka Stock Exchange) (Zambia)
  5. EGX (Egyptian Exchange) (Egypt)
  6. GSE (Ghana Stock Exchange) (Ghana)
  7. JSE (Johannesburg Stock Exchange) (South Africa)
  8. USE (Uganda Securities Exchange) (Uganda)
  9. BSE (Botswana Stock Exchange) (Botswana)
  10. NSE (Namibian Stock Exchange) (Namibia)

There you have it; these are top stock and securities exchanges in Africa, for the year 2016. We shall see what the list has forthcoming in 2017…..-SB

*Study conducted by Mr. Jamelle Cole, CFA, CPA *Source: Relentless Investment Research*


By: Economic & Finance Report

Snap Inc (Snapchat) opened and closed today on the tech boards. It was one of the few Tech IPO’s that successfully launched in 2017, thus far.  Analysts had placed the valuation of Snapchat @ $24 share, and it skyrocketed closing 44% higher then when it started. It beat expectations closing above the $24/share prediction by observers.

Snapchat is trading under the ticker symbol SNAP on the NYSE.  The market capitalization of Snapchat is around $33 billion dollars, noted by analysts and researchers alike.

Snapchat mobile app, was created by 26 year old tech  billionaire Evan Spiegel and co founders Bobby Murphy, Reggie Murphy, when they were college students at Stanford. -SB

TRUMP’S BOX TRAP: Has President Donald Trump Boxed Himself; In Regards To Returning Manufacturing Jobs To AMERICA????

By: James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

One prominent theme of Donald Trump’s campaign has been the fleeing of American manufacturing jobs to foreign shores and his determination to first stop, then reverse the flow of American manufacturing jobs to lands of cheaper labor. This is based on a popular American perception of cheap foreign labor being why manufacturing has moved to foreign lands. As so often the case, reality is far more complex than perception. The two major forces, which are never spoken of in our political discourse, and which Mr. Trump as a business man is very familiar with, are ‘High Capitalization’ and ‘Low Return on Investment’.

These are two basic terms than any undergraduate business major knows and understands, which makes it surprising that you never hear these terms in news stories about the flight of American manufacturing. For those with limited business knowledge, High Capitalization means it takes a lot of money to start and run a business, while Low Return on Investment means you’re not getting much for your money. For manufacturing you must buy expensive machinery and equipment, the raw materials to make things out of, land, buildings, tools, transportation … the mirid of things you see in any factory. Then you need money to run the business, money to buy more materials, money to pay bills and payroll while waiting for things you make to sell and the time your customers take to pay for them. Starting and running a manufacturing operation takes a lot of money, while software and retail based businesses require much less. Return on investment means how much money you make for all that money you’ve invested. Think of having all that money you poured into your manufacture startup in a bank savings account. In

one year, you get some amount of money from the interest paid by the bank. The interest is your return on investment. Now if you have $10,000,000 in this savings account, and you only get $25,000 in interest payment per year (0.25%)— you’re going to start looking for some other bank that pays more.

And that’s exactly what happened! By the early 1960’s, the American manufacturing segment began to realize it wasn’t making much money on all that money they had invested in manufacturing. So they begin looking for those other 0banks0, where investments would pay significantly better than manufacturing. Put simply … they didn’t want cheaper labor, they just wanted out of manufacturing! If labor cost was the principle issue, they would have simply moved their factories to the southern states, especially those having right to work … and would have been welcomed with open arms of joy. As the sixties drew to a close, manufacturing enterprises were closing down their operations, pulling monies out to invest in those other banks … the emerging hyper consumerism economy of franchise restaurants and speciality stores, strip centers, shopping malls, consumer financing, big box stores and entertainment. All those things we now take for granted. The oil crisis of 1973 accelerated this movement resulting in the ‘Rust Belt’.

An important side bar to this is that at this same time the machine tool robots, which replaced the highly skilled machinist, were becoming available. American manufacturing had always been and remained concentrated in the north-east corridor because manufacturing required a large pool of highly skilled labor to draw upon. With the advent of robots, manufactures no longer needed that pool of skilled labor, so foreign investors could now either start up their own manufactures to compete with American companies or subsidize American factories moving in by providing the financing to build and establish manufacturing operations in their country. Either way, American companies were able to 0get shuck0 of their factories and used that money to make some real money, which they did.

Now as an engineer, I’m not in favor of the demise of manufacturing in America simply because it means less opportunities for my brethren. But more importantly, since the first modern war, the American Civil War, modern wars are fought and won … or loss in the factories. We no longer have the true military might we assume we have when looking at our array of modern weapons. For instants, it takes about 30,000 vendors and suppliers to manufacture a modern aircraft, with more and more of these now foreign based. We are now so deplete of industry to support our military operations, that during Iraq and Afghanistan operations, we had to buy such military basics as small arms ammunition from foreign manufactures.

Most of the flight of American manufacturing has already happened. If Mr. Trump intends to restore manufacturing to American, which we very much need, then he must successfully address those two business topics of ‘High Capitalization’ and ‘Low Return on Investment’. There’s not really much he can do for High Capitalization, after all, things cost and you can’t really avoid that. But the real stumbling point is that Low Return on Investment, because business will not sink their monies into enterprises that will make them little money. You wouldn’t with your money, so why would you expect anyone else to. That’s the real problem that Trump and the Congress must successfully address if manufacturing is to ever return to America.

However, even if successful in bringing some amount of manufacturing back to America, there won’t be the hay day of good paying manufacturing jobs as seen prior to the 1960’s for the simple reason that automation and robots have eliminated so many jobs in manufacturing. Another reason that cheap labor isn’t the driving force that American popular culture considers it to be. Nevertheless, the lack of a manufacturing base presents serious problems for our economic future, in particular with the continual deterioration of relations with China, who now provides so much of our manufactured goods.

Will taxes and tariffs provide the means to force a resurrection of American manufacturing? I don’t know, I haven’t seen any modeling of the problem. But either way, the economy could be in for some rough times, particularly militarily. Most people don’t realize that we spent the first two years of World War II just preparing for war. For America, 1944 onwards was the real war for Americans.

And in today’s world, we may not get that luxury of time again.