Weekly Reads – How Cable Companies Raise Your Prices Every Year, New Car Shortage Leads To Dramatic Increase In Used Car Prices

Most Americans don’t have much choice when it comes to choosing their internet service provider. If you are lucky, you may have two or three options in your area.  Companies like Comcast (Xfinity) have used this lack of competition to their benefit by raising prices every year. Their bills are opaque and consumers are often surprised with a litany of additional fees. But there are a few ways to spot the common tricks these companies use. (Washington Post)

The highest form of wealth is your ability to control your time. A rich CEO may have a big bank account but he or she doesn’t have time. Trying to acquire more money than you need is just an accounting hobby. It doesn’t make you wealthy. (Collaborative Fund)

Google’s Larry Page, who has only been in public a few times in the past year, has been living in Fiji during the pandemic. Though Fiji’s border is closed to traditional travelers, Fiji has welcomed wealthy visitors like Page. With an estimated net worth of $115 billion, he controls Google with its other founder, Sergey Brin. Page helped Fiji get critical medical supplies. (Daily Mail)

Chinese education stocks took a big hit on the news that China has asked education and tutoring companies to become nonprofits. The Chinese government wants to reduce the cost burden on parents. The government is also set to announce trial bans on tutoring during the summer and winter holidays. Chinese education stocks such as EDU, TAL, and GOTU were down more than 50%.  Many of these stocks are down more than 80%  year-to-date. (Reuters)

Mayors of more than 50 cities are testing a pilot program that would hand out cash to its citizens every month – no strings attached. Mayors want to determine if these programs can reduce poverty, reduce inequality and encourage people to work. (Reuters)

Since last summer, used car prices are up 45%. It’s messing up not just the used car market but also overall inflation. Used car prices accounted for 33% of all price inflation in the US. A semiconductor shortage has led to a shortage of new cars, which has driven up used car prices. (The Hustle)

The digital yuan is ready to challenge the mighty dollar. The digital currency will help China export its digital authoritarianism to the rest of the world. (CNBC)

Investment banks are doing everything they can to get bankers back in the office. They are also asking their law firms to do the same. (Bloomberg Law)

Worm Capital’s Arne Alsin is betting against old-world companies such as GM and Exxon. He believes these companies are not “pivoting” as fast as they should. Exxon shares are up more than 40% this year. (Institutional Investor)

Studying failure makes you a better investor. It helps you look for red flags while researching companies. In the book, Lights Out – Pride, Delusion and the Fall of General Electric, Ted Mann and Thomas Gryta look at how the big conglomerate failed. GE consistently beat earnings estimates and kept its earnings on a “smooth trajectory” by managing its earnings. The SEC would question later GE’s accounting practices and said the company routinely lied to investors in its regulatory filings and public statements. Jeff Immelt, the company’s CEO, felt that the market was not rewarding GE and was obsessed with its stock price. The company also ventured big into the cyclical oil business at the wrong time. The book is an easy read and has a lot of lessons for investors. (Masterinvest)

Endowment effect – we value something more when we own it. That goes for everything, including stocks. Momentum investors tend to extrapolate current positive or negative news and expect it to continue in the future. Unless you are a day trader, you are better off checking the news on your stocks less often. Reading quarterly reports should suffice for most long-term investors. (Klement on Investing)

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