147 Alternative Words To Use Instead of “Very”: Infographic

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Some of the words in English are overused, For instance, “Free” is often used in marketing in order to get consumers’ attention. Another word that is over-used is “very”. People often say “very good” when it is better to say “Excellent”. Similarly when they really liked a meal or a dish some people might say it was “very tasty”. Instead they could have said it was “Delicious”. The following infographic shows 147 words that can used instead of using “very”.

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Source: via Daily Infographics

A Review of the Biggest Four Publicly Traded European Luxury Companies

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The multi-billion dollar luxury goods business is dominated by European companies. Luxury makers survived the pandemic last year better than other retailers and are emerging stronger this year. While in the past developed countries mostly were the market for luxury products that is no longer the case. China and other emerging markets are a huge source of revenue for the purveyors of these goods. Unlike consumer staples or other regular items, pricing power of luxury goods is strong since the only people that can afford to buy these goods have the capacity to bear the price increases. Moreover because these are “Veblen goods”, ever-higher prices for a product may also bring more prestige and satisfaction to buyers. For example, such consumers may feel that a $100K handbag is better than say a $50K handbag since a $100K is a rarity even among these consumers. Another point to remember is that buyers of luxury products are more likely to be insensitive to economic conditions as ordinary folks.

So how to profit from the growth of luxury companies?

One way to profit is to invest in the stocks of publicly-traded luxury firms. The four biggest European luxury companies that are public are LVMH, Kering, Hermes and Richemont.

1.LVMH:

France-based LVMH Moët Hennessy Louis Vuitton (LVMUY) reported strong sales in first quarter of this year. Its markets rose in the first quarter to become one of the most valuable companies in Europe. It owns over 75 brands including Bulgari and owns one of the top spots in benchmark CAC-40 index.

2.Kering:

Kering (PPRUY) is the owner of Gucci brand and is also based in France. It also owns the Yves Saint Laurent and Bottega Veneta brands and is a member of the CAC-40.

3.Hermes:

Hermes International S.C.A (HESAY) is another CAC-40 constituent and sells everything from fragrances to clothes to handbags and other items.

4.Richemont:

Switzerland-based Compagnie Financière Richemont SA (CFRUY)  owns brands such as Cartier, Chole, etc. The company sells apparels, watches, jewelry and other luxury goods.

Disclosure: No Positions

Related:

S&P 500 Total Return vs. Price Return: Chart

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Dividends are important factor to consider to boost return with equity investments. I have written many times before in this blog that dividends provide a cushion to a well-diversified portfolio during adverse market conditions and help increase the total return of an investment. To put it another way, buying dividend-paying stocks and then reinvesting the dividends will lead to higher total return especially in the long run in most cases. In rare situations one can lose both the principal and the reinvested dividends if a company goes bankrupt. During the Global Financial Crisis of 2008-09 many investors lost big following this strategy when banks failed and equity became worthless. However things like the GFC are not frequent enough to avoid this concept entirely.

From January, 2000 to June, 2020 S&P 500 has soared by 700% based on total returns (dividend reinvested).  This is 43% higher than price returns only. The power of compounding over many years led to a solid 43% excess return.

Sources: FactSet, Mellon Investments Corporation June 30, 2020. Past performance is no guarantee of future results. Charts provided are for illustrative purposes only and not indicative of the past of future performance of any BNY Mellon product.

Source: Equity income investing: A strategy for unpredictable markets, BNY Mellon

Related ETF:

  • SPDR S&P 500 ETF (SPY)

Disclosure: No Positions

US Direct Auto Supplier Manufacturing Employment by State: Chart

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The US auto parts industry is the second most important industry after the auto manufacturing industry. Direct employment by auto parts suppliers was over 907,000 in 2019. When indirect jobs are included the total reached out 4.8 million jobs in that year according to a report by Motor & Equipment Manufacturers Association.

Mid-western states have the largest auto parts employment with Michigan as the top state for auto parts supplier employment followed by Ohio and Indiana. The top 10 states accounted for 67% of total direct employment and the top account for 88% of the total. Obviously Alaska and Hawaii rank the last in auto parts employment.

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Source: US Labor & Economic Impact of Vehicle Supplier Industry 2019CY Final Report for Motor & Equipment Manufacturers Association, December 2020 2.0, MEMA

In a future post we will look at the auto parts employment figures in Mexico.

Related lists:

On The Impact of Inflation on Equity Returns – An Australian Example

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Inflation has become one of the main topics in the US media in recent weeks. Prices of autos to food and restaurant meals are going up to the surprise of the general population which generally was protected from the ravages of inflation for many years now. Curious investors are wondering about the impact of inflation on equity returns. While it is well known that stocks traditionally yield a return that beats inflation, it is still important how stock returns are affected during different phases of inflation.

I recently came across an excellent piece at Firstlinks that discussed the very topic from an Australian perspective. The gist of the article is during rising inflation periods, equity returns decline. But during periods of falling inflation, equity return increases as shown in the chart below:

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Source: How inflation impacts different types of investments, Ashley Owen, Firstlinks, Australia

It should be noted that the returns shown above are not adjusted for inflation. So the total return of 7.8% during the rising inflation period of 1998 to 2008 is lesser when accounted for inflation. The “real” return during that period was just 4.3%.

The key takeaway is investors can expect to earn lower returns from equities during periods of rising inflation and vice versa. As the US is in the rising phase of inflation cycle currently equity returns would be lower not higher in the future.

Related ETFs:

  • iShares MSCI Australia Index Fund (EWA)
  • SPDR S&P 500 ETF (SPY)

Disclosure: No positions