Boltwood Capital Management | Weekly Reads: 09/24/2018
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Weekly Reads: 09/24/2018

The Week’s Best Articles: Week of September 24th, 2018

Business: When the Supply of Uber and Lyft Drivers Rises, Their Earnings Fall – click here
If you talk to Lyft and Uber drivers many of them complain about declining rates of pay and the difficulty of operating in the “gig” economy.  This article by the WSJ outlines how as more competition (drivers) enter the market the base rate of pay has declined because the supply is so high.  The findings of this somewhat support the feelings these drivers have had.

Business: Comcast to Enter $100B Debt Club – click here
There is very little love loss between Disney and Comcast.  In the most recent chapter of their feud, Comcast won the right to buy British media company Sky.  However, in the process, Disney drove up the cost forcing Comcast to enter into the $100B debt club.

Business: Why Legacy Companies Must Reinvent – or Die – click here
The battle between incumbents and upstarts is one that is core to the idea of capitalism.  The willingness (and ability) for these smaller companies to challenge the status quo has forced legacy companies to invent as well.  History shows us that without reinventing themselves there is ample opportunity for these legacy companies to drop by the wayside.

Debt: Debt Repayment By Government Not Such a Great Deal? – click here
In 2007 the Federal Government put in place a program to repay the student debt of those that become teachers or work for non-profits.  Now 10 years later the first of these participants are looking to claim their benefits yet 99% of those applying are having their requests denied.  Something to remember when committing to being in debt for 10 years.

Rates: Rates Rising Ahead of the Fed Meeting – click here
Interest rates are set to rise further as the Fed enters its quarterly meeting.  While we firmly anticipate rates to rise again at the end of the meeting we are hopeful that the federal reserve will take the next steps more cautiously as it doesn’t appear the market is overheating yet.

Technology: Facebook’s Bear Hug On Instagram Frustrated Its Founders – click here
Earlier this week it became public that Instagram’s two founders quit the company to go and pursue new projects.  This comes on the heels of the WhatsApp founders (another Facebook property) expressing their frustration over Facebook’s desire to monetize the free product.  While it is not surprising to see founders resist change to their “baby” it is unrealistic to expect their acquirer to not change the product in some way.

Investing: Pot Stocks Have Been Hot, But What About ETFs – click here
Pot stocks have been some of the hottest stocks in the market over the past several months.  The majority of these companies have little to no revenue and are operating on the “hope” that certain legal barriers are removed.  Interestingly, ETFs seeking to track this basket of companies are having a hard time finding banks willing to serve as custodian of the shares because of the same legal uncertainty around marijuana.