For Your TGIF Pondering – February 27, 2015

These are some of the interesting reads that I found on Thursday and Friday morning. Hope you too will find them interesting. Some are market related, some are on geopolitics and some are just for fun.

  1. Investors Are Optimistic About 2015 – Morgan Stanley Wealth Management’s semiannual Investor Pulse Poll surveys a national sample of investors with investable assets of $100,000 or more, a third of whom have assets exceeding $1 million.1 Highlights this year include high optimism about the US economy and investment portfolios; concern over international conflicts and climate change; and support for developing alternative energy, as well as the Keystone Pipeline.
  2. Top Investor Trends to Watch in 2015 – Almost nine in 10 wealthy investors in the Morgan Stanley study said they are more apt to invest in technology than any other sector in 2015. Biotech (81%), pharmaceuticals (71%) and energy (69%) were the next most favored sectors for the year ahead. A further breakdown of the energy sector is on the following slide.
  3. The government voted to save the internet – However, the proposal has certain restrictions to tamp down fears from internet service providers (ISPs). For example, the proposal does not give the FCC authority to regulate pricing of internet service like it could with phone service. The FCC had authority to regulate phone pricing because phone companies had a monopoly. The FCC’s net neutrality proposal clearly doesn’t view ISPs as monopolies.
  4. Only the US and Estonia are meeting NATO’s defense budget goals – This stagnation in military expenditure from the larger military powers in NATO — the UK, France, Germany, and Canada — has led to several smaller NATO states to increase their funding. Not coincidentally, some of them would be frontline states in a future military conflict between Russia and the NATO alliance.
  5. 21 charts that the UK’s top economists want you to see before you vote in the General Election – The general election in May is likely to be one of the most economy-focused ever. Seven years after the global financial crisis, the UK is now recovering: But the return to growth was slow and some parts of the country are still severely depressed.
  6. How to Screen for Dividend Growth – Ability to pay is measurable, and can be found in a company’s balance sheet strength, growing income stream and strong free cash flow. The last metric, defined as cash from operations minus capital expenditures, is one of the first things Kirby looks at. “Free cash flow is a measure of cash earnings as opposed to accounting earnings,” he says.
  7. Ukraine Left Behind as Russian Stock Gains Are Unmatched – “For Ukraine, the big question right now is one of survival,” Kirill Yankovskiy, the director of equity sales at Otkritie Capital Ltd. in London, said by phone Wednesday. “The question is how Ukraine will be able to pull through a turbulent period of economic crisis, conflict in the east, and structural reforms and reshuffling of the entire economy. The risks Russia is facing are not that profound, and as oil is turning around, confidence in the Russian market increases.”
  8. What Greece Won – So did the current Greek government back down and agree to aim for those economy-busting surpluses? No, it didn’t. In fact, Greece won new flexibility for this year, and the language about future surpluses was obscure. It could mean anything or nothing.
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