(New York)

Gold had a great start to the year, but has since fallen back and is now down 1% in 2019. That’s said, there are some encouraging signs. Global demand for gold rose 7% from a year ago in Q1, and inflows to gold ETFs rose 49% versus the same stretch in 2018. Summer is a seasonally weak period for gold, but the metals outlook is going to be highly dependent on central bank action.

FINSUM: To be honest, we do not see a bullish scenario for gold right now. There are neither worries about an economic meltdown or high inflation, so the two big drivers for gold to move sharply aren’t there.

(Los Angeles)

In what comes as a really eye-opening turn of events even for someone as outlandish as Masayoshi Son, SoftBank has announced a plan to IPO its $100 bn Vision Fund. The fund is already legendary, having invested $100bn in just two years in some of the world’s biggest startups. It currently holds positions in WeWork and Uber, for instance. Masayoshi Son is now raising for capital for another fund, so wants to access some liquidity from this first one, thus the plan to IPO.

FINSUM: This is a bonkers plan, but honestly, and interesting opportunity for investors to own pieces of some very exclusive private companies. This is like an early stage Berkshire Hathaway.

(Washington)

In what comes as very disappointing news to many advisors, the DOL has just confirmed worst fears—it is officially bringing the fiduciary rule back. The DOL mentioned this idea in passing last year, but not given formal word on it. However, speaking before Congress yesterday, DOL chief Acosta confirmed that the fiduciary rule was coming back and that the agency was coordinating with the SEC. Acosta declined to give a timeline, but late this year is the anticipated unveiling of the new rule. According to one industry commentator, "We see this as a positive for financial advisers and active [investment] management as the Labor standard is unlikely to include class-action liability”.

FINSUM: It is too early to know if this is good news or bad because no one has clarity on what the DOL is doing. That said, our instinct is the new rule will be less onerous than previously.

(New York)

There has been a lot of anger (and even legal action) about the big declines Lyft has seen since its IPO. The questions around publicly traded companies worth tens of billions of Dollars with annual losses of billions of Dollars are only growing more intense as Uber readies for its IPO. The big question is what investors should do about the stocks—stay away or buy in? TrimTabs Asset Management has some very salient thoughts on the issue. TrimTabs specializes in free cash flow oriented products and lent their expertise to this question. They conducted an in-depth study of how post-IPO companies with negative free cash flow, and negatively trending free cash flow, perform versus those with positive FCF. The results were stark, and in all instances showed major outperformance of FCF positive companies. For instance, over a 12-month horizon following IPO, $1 bn+ companies with positive FCF outperformed those with negative FCF by almost 16%, with the latter averaging losses of 6.41%.

FINSUM: This analysis from TrimTabs could not be more timely or insightful. We think it might be smart to stay away from Uber and Lyft until they at least have a clear path to profitability.

(San Francisco)

Want to forecast at where Apple’s stock price is headed? There is a good trick for doing so. The method is to look at the earnings and share price moves of Apple’s suppliers. About a third of suppliers report earnings before Apple does, and many of them derive a high portion of their sales from the company. Therefore, one can fairly well predict Apple’s earnings and likely moves. For instance, Apple has been on a tear since its earnings on Tuesday, and it would have been easy to see from the previously released supplier earnings.

FINSUM: This will not always work and some of the value is probably eaten up by algorithmic traders, but still, it seems a good predictive indicator.