First $6 Trillion Company: Asset Allocation Daily

By SA For FAs :

Fees And Expenses

"Fidelity became the first broker/index fund provider to offer core index funds without any management fee. In addition, all account fees and minimums were removed, they eliminated all domestic money transfer fees, and lastly they lowered the expense ratios on all Fidelity stock and bond index mutual funds." ( Alpha Gen Capital )

Investing And Gambling

"The stock market is a bit like a parimutuel system. In parimutuel betting, all bets are placed in a pool, taxes and the house take are skimmed off the top, and the pool is shared by the winning bettors… If you take a rigorous probabilistic approach and put in lots of practice and hard work, it's not that difficult to beat the house." ( Yuval Taylor )

U.S.-China Trade

"In China, there is not a great deal of concern about tariffs... Most accept that both sides would lose in an all-out trade war, as the textbooks suggest. Many here also recognize that China and the U.S. will hurt their own companies and consumers, rather than the other party's, with their tariffs - and that U.S. consumers and U.S. companies will feel most of the pain." ( Neuberger Berman )

U.S. Labor Market

"The share of labor contribution in total economic output has, basically, collapsed. The slide started with the technological revolutions of the 1960s and 1970s, followed by computerization and supply chain management revolutions of the 1980s and 1990s. But the real collapse took place starting with the 2002 post-dot.com bust." ( Constantin Gurdgiev )

Thought For The Day

Apple ( AAPL ) having become the first trillion-dollar company last week has inspired a lot of commentary. Many have pointed out that Steve Jobs' dismissal by Apple's board at an early phase of the company's history proved to be a critical turning point. As he himself put it in his 2005 Stanford commencement address: "I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life."

And indeed, two years after that talk, he introduced the iPhone - the pivotal event leading up to trillion-hood.

I won't rehash any more of Steve Jobs' fascinating story other than to point out that the critical lesson he imparted is the degree to which failure was an essential part of his ultimate triumph. To underscore the relevance of this less, it bears noting that Apple's trillion-dollar milestone is not really unique in a meaningful way.

Out of curiosity, I checked Ford's ( F ) market cap after its 1956 IPO, when the company was valued at $660 million. Adjusted for inflation, that would be $6 trillion today. Why did I choose Ford? Because its founder was also known to have experienced multiple failures - including 5 bankruptcies - before he finally achieved success. In 1956, the dollar was really worth something, and Ford was dominant in the automotive industry on a global scale. In the public mind, the Ford Motor Company was wealth. To America's enemies, the subtle message was make one wrong move and we'll unleash Detroit on you.

There are several points here. The less sanguine one is that things ebb and flow. Today, America's implicit message to its enemies is, make one wrong move and we'll unleash Silicon Valley on you. As Detroit's time has passed, so too will some other place will supersede Silicon Valley. The second message is that there's nothing new - a trillion dollars is just a new way of expressing an old idea, one which Ford surpassed in its time. The third idea, and most important from a personal finance point of view, is that like Steve Jobs and Henry Ford, there's never any reason to despair. You can repair a damaged balance sheet and go on to achieve never-dreamed-of financial heights. Like "the lightness of being a beginner again" that Jobs embraced, we always have the chance to refresh our efforts.

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See also Expeditors International Of Washington Could Jump Even Higher After Earnings on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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