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The record gold rush may intensify into year-end.
According to NewEdge Wealth’s Ben Emons, the final month of the year typically creates a bigger appetite for the yellow metal.

“It’s been very consistent every December. It’s been a pretty strong performance for gold — especially when there is a rally in the stock market in November,” the firm’s head of fixed income told CNBC’s “Fast Money” on Tuesday.
Gold settled at a new record high Friday. It closed the day up almost 2%, at $2,089.70 an ounce.
Emons listed the economic backdrop and geopolitical backdrop as additional positive catalysts for gold.
“There’s uncertainty next year. We have an election. We don’t know what’s going to happen. We get a recession maybe, maybe not,” said Emons. “At the same time, gold rallies when there’s this risk-on feel in the markets, and that’s really when real rates and interest rates are declining. This gives the gold a really good push for the breakout.”
In a note to clients this week, Emons wrote that months for both gold and stocks are a “rare combo.” Gold gained 3% while the Dow and S&P 500 were both up almost 9% in November.

“[It] tends to occur when markets price in major easing cycles,” he wrote. “Currently, that is going on in a mild manner, which puts the spotlight on the seasonals of gold.”
Emons suggests the strength will continue into next year.
“Central banks are again outbidding gold against dwindling supply, likely setting up the metal for a major breakthrough towards 2100 … lifting boats for laggards like utilities have a shot to claim market leadership by early 2024,” Emons also wrote.
“Fast Money” trader Guy Adami also sees gold shining due to the dollar’s recent performance.
“If rates continue to go lower, the dollar will go lower. That will be a tailwind for gold,” he said. “Gold is within a whisper of having a huge breakout to the upside.”
As of Friday’s close, gold is up more than 14% so far this year.

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Charlie Munger at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.
Gerard Miller

As Charlie Munger’s admirers around the globe mourn the loss of one of the most influential investors ever, a deep sense of gratitude and appreciation has spread — for his unparalleled business acumen as well as his uniquely sharp tongue.
Munger, Berkshire Hathaway’s vice chairman who died Tuesday one month shy of his 100th birthday, left a mark on generations of investors in a host of ways thanks to a long and fruitful life.

First and foremost, Munger’s investment philosophy rubbed off on none other than Warren Buffett, giving rise to the sprawling conglomerate worth almost $800 billion that Berkshire is today.
Early in their careers, Munger broadened Buffett’s investing approach, eventually turning away the younger Buffett from buying dirt cheap, “cigar-butt” companies that might still have a little smoke left in them, to instead focus on quality companies selling at fair prices.
“Certainly as Berkshire shareholders, we owe them a debt of gratitude because the earlier you get to a good decision, the better,” Bill Stone, chief investment officer at Glenview Trust, said in an interview. Such timing gives rise to “a compound” effect, he said.
Recognizing a good business
Matt McLennan, co-head of the global value team and portfolio manager at First Eagle Investments, a longtime investor in Berkshire, recalled a meeting with Munger more than 15 years ago, where he asked how he and Buffett spent their time, given their claim that they made investment decisions in only minutes.
“Charlie responded ‘reading,’ which struck me as quite apt given his uncanny ability to build mental models of how the world works and use these models as the advance groundwork for efficient decision-making,” McLennan told CNBC.

Munger long emphasized the importance of recognizing a good business before it’s widely seen as such, and he did so many times in his storied career.
He made a shrewd bet on Chinese electric automaker BYD that proved a big winner. Berkshire first bought BYD in 2008, and the stake has since grown into a multibillion-dollar position in the world’s largest electric vehicle manufacturer.
Munger was also a loyal supporter of Costco Wholesale Corp., calling it one of the best investments of his life. He invested in the retailer before it merged with Price Club in 1993.

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Never following the crowd
Unlike Buffett, who often wraps a piece of criticism in a folksy story, Munger tended to speak bluntly, sprinkling his remarks with unforgettable quips.
As a longtime cryptocurrency skeptic, he never minced words when it came to his critique, saying digital currencies are a malicious combination of fraud and delusion. He also called bitcoin a “turd,” “worthless, artificial gold” and that trading digital tokens is “just dementia.”
When SPACs — special purpose acquisition companies — enjoyed a short-lived boom in 2021, Munger said “it’s just the investment banking profession will sell s— as long as s— can be sold.”
“The thing I really appreciated was that he was so blunt,” Stone of Glenview Trust said. “It’s pretty refreshing because most people in the world are forced to be a little bit cautious in what they say or just want to be liked. He had a special something and I never took it as malicious.”
John Rogers, co-chief executive at Ariel Investments, respected Munger’s no nonsense “irreverence” to the end.
“He was a true contrarian. He didn’t care what others thought,” Rogers said this week at the CNBC CFO Council Summit. “I think to be a successful investor, that’s critical, that you don’t follow the crowd. You think independently, and he was someone who truly did that.” More

Investors can now trade commodities and a Treasury with a popular short-term options strategy.
The Nasdaq recently launched five zero-day options-based exchange-traded funds: United States Oil Fund (USO), United States Natural Gas Fund (UNG), SPDR Gold Shares (GLD), iShares Silver Trust (SLV) and iShares 20+ year Treasury Bond ETF (TLT).

“Zero-day to expiration” or “0DTE” refers to a trade which expires in less than a day. It has taken the options market by storm. The volume of S&P 500 zero-day contracts has increased at least 40%, versus 5% in 2016, according to data from the CBOE.
Not everyone is excited about the new ETF offerings, due to the complexity of the trade.
“I’m cautious about these products because I agree they’re problematic for undereducated retail investors that don’t know how to trade the options market,” Dave Nadig, VettaFi’s financial futurist, told CNBC’s “ETF Edge” on Monday.
The surge in activity surrounding zero-day options has some analysts worried about a negative impact on the market.
“I don’t think the tools themselves are inherently breaking the market,” Nadig said. “Like most market structure things, it’s not a problem until it is.”

Nadig also said he believes that most of the contracts are coming from hedge funds, not retail investors.
“This is largely institutions, hedge funds and day traders, using these as short-term leverage speculative vehicles with the extra added bonus that they never have to settle,” Nadig said. “I think most individual investors probably don’t have any business in here at all. They’re naturally very speculative because of the inherent leverage.” More

Federal Reserve Chairman Jerome Powell on Friday pushed back on market expectations for aggressive interest rate cuts ahead.
“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said in a speech.
However, the remarks gave some credence to the idea that the Fed at least is done hiking as the string of rate hikes since March 2022 have cut into economic activity. Powell noted that inflation “is moving in the right direction.”
Markets largely took Powell’s comments as dovish, with stock up and Treasury yields down sharply.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting on September 20, 2023 at the Federal Reserve in Washington, DC.
Chip Somodevilla | Getty Images

Federal Reserve Chairman Jerome Powell on Friday pushed back on market expectations for aggressive interest rate cuts ahead, calling it too early to declare victory over inflation.
Despite a string of positive indicators recently regarding prices, the central bank leader said the Federal Open Market Committee plans on “keeping policy restrictive” until policymakers are convinced that inflation is heading solidly back to 2%.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said in prepared remarks for an audience at Spelman College in Atlanta. “We are prepared to tighten policy further if it becomes appropriate to do so.”
However, he also noted that policy is “well into restrictive territory” and noted that balance of risks between doing too much or too little on inflation are close to balanced now.

Markets moved higher following Powell’s remarks, with major averages positive on Wall Street and Treasury yields sharply lower.
“Markets view today’s comments as inching toward the dovish camp,” said Jeffrey Roach, chief economist at LPL Financial.
Expectations that the Fed is done raising rates and will move to an easing posture in 2024 have helped underpin a strong Wall Street rally that has sent the Dow Jones Industrial Average up more than 8% over the past month to a new 2023 high.

Powell’s remarks gave some credence to the idea that the Fed at least is done hiking as the string of rate hikes since March 2022 have cut into economic activity.
“Having come so far so quickly, the FOMC is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” he said.
“As the demand- and supply-related effects of the pandemic continue to unwind, uncertainty about the outlook for the economy is unusually elevated,” he added. “Like most forecasters, my colleagues and I anticipate that growth in spending and output will slow over the next year, as the effects of the pandemic and the reopening fade and as restrictive monetary policy weighs on aggregate demand.”
A Commerce Department report Thursday showed that personal consumption expenditures prices, the Fed’s preferred inflation gauge, were up 3% from a year ago, but 3.5% at a core basis that excludes volatile food and energy prices. Recent sharp declines in energy have been responsible for much of the easing in inflation.
Powell said the current levels are still “well above” the central bank’s goal. Noting that core inflation has run at a 2.5% annual rate over the past six months, Powell said, “while the lower inflation readings of the past few months are welcome, that progress must continue if we are to reach our 2 percent objective.”
“Inflation is still running well above target, but it’s moving in the right direction,” he said. “So we think the right thing to be doing now is to be moving carefully, thinking carefully about about how things are going on letting letting the data tell us what the story is. The data will tell us whether we’ve done enough or whether we need to do more.”
After inflation hit its highest level since the early 1980s, the Fed enacted a series of 11 interest rate hikes, taking its policy rate to the highest in 22 years at a target range between 5.25%-5.5%. The FOMC at its past two meetings kept rates level, and multiple officials have indicated they think the federal funds rate is probably at or near where it needs to be.
The Fed’s next meeting is Dec. 12-13.
“The strong actions we have taken have moved our policy rate well into restrictive territory, meaning that tight monetary policy is putting downward pressure on economic activity and inflation,” Powell said. “Monetary policy is thought to affect economic conditions with a lag, and the full effects of our tightening have likely not yet been felt.”

Traders expect cuts

Market pricing Friday morning indicated that the Fed indeed is done hiking and could start cutting as soon as March 2024, according to the CME Group. Moreover, futures are pointing to cuts totaling 1.25 percentage points by the end of the year, the equivalent of five quarter percentage point reductions.
However, neither Powell nor any of his fellow officials have provided any indication that they’re thinking about cuts, with the chair adhering to data dependence for future decisions rather than any preset course.
“We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks,” Powell said.
Addressing the economic data, Powell characterized the labor market as “very strong,” through he said a reduced pace of job creation is helping bring supply and demand back in line.
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More companies are doing 401(k) plan reenrollments every year.
While automatic enrollment generally pertains to new hires, a reenrollment is like automatic enrollment for everyone else who doesn’t currently save in the company’s 401(k).
Some employers may even reenroll workers who don’t contribute a baseline share of their paychecks.

A modern office space with a variety of plants on display and some employees working together at computer desks.
Tom Werner | Digitalvision | Getty Images

If you elected not to participate in your company’s 401(k) plan, your employer may have other ideas.
The concept of 401(k) plan “reenrollment” has been gaining traction. That means companies are more regularly choosing to automatically sweep workers into their workplace plan if they don’t currently participate.

While automatic enrollment, which has also gained popularity, generally applies to new hires, reenrollments typically apply to all workers who don’t currently save in the 401(k).
As of 2022, about 10% of companies that offer a retirement plan reenroll workers into the 401(k) every year, according to a recent survey by the Plan Sponsor Council of America, a trade group. That share is up from 4% a decade earlier.

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The calculus is often one of retirement security and trying to help boost workers’ savings, said Sean Deviney, a certified financial planner based in Fort Lauderdale, Florida.
“A lot of times employees make their [401(k)] election when they’re hired and never look at it again,” said Deviney, director at Provenance Wealth Advisors.
Most companies, about 85%, direct workers’ savings into target-date funds if they’re automatically enrolled, according to PSCA data.

Workers receive a notification from their employer ahead of reenrollments and have the chance to opt out or reduce their contribution. Employers’ hope is that inertia will cause workers to stay in the plan rather than opt out.

Some companies may elect to do this as a one-time exercise instead of annually, Deviney said. Others may also choose to reenroll workers who are currently participating in the company 401(k) but bump them up to a higher savings rate, he said.
Companies may also derive a long-term financial benefit from such policies. For example, better worker finances can boost employee productivity and happiness on the job and allow them to retire at a younger age, perhaps saving companies money on future payroll and health costs.
Companies may also decide against adopting reenrollment policies out of fear of being too paternalistic, Deviney said. It may also raise employer costs too much, especially if the company offers a 401(k) match, he said. More

Source: Finance – cnbc.com More

Charlie Munger at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.
Gerard Miller

The late investment icon Charlie Munger said Berkshire Hathaway, the conglomerate he and Warren Buffett built over the last five decades, could have doubled its value if they applied leverage, or borrowed money, when buying businesses and common stocks.
Munger, Berkshire Hathaway’s vice chairman who died Tuesday just a month shy of his 100th birthday, stressed that he and Buffett almost never used this common Wall Street practice, because they always put their shareholders first.

“Berkshire could easily be worth twice what it is now. And the extra risk you would’ve taken would’ve been practically nothing. All we had to do is just use a little more leverage that was easily available,” Munger said in CNBC’s special “Charlie Munger: A Life of Wit and Wisdom,” which aired Thursday.
“The reason we didn’t is the idea of disappointing a lot of people who had trusted us when we were young … If we lost three quarters of our money, we were still very rich. That wasn’t true of every shareholder,” he told CNBC’s Becky Quick in the previously unaired interview. “Losing three quarters of the money would’ve been a big letdown.”
The use of leverage is prevalent on Wall Street as it provides a way to boost buying power and enhance the potential return in any given investment. But it also significantly increases the risk as losses can multiply quickly if the investment doesn’t pan out as expected.
Beware an ‘unsettled mind’
Buffett, often called the “Oracle of Omaha,” previously explained the perils of using debt and leverage to buy stocks, saying it can make an investor short-sighted and panicky when times turn volatile.
“There is simply no telling how far stocks can fall in a short period,” he wrote in his 2017 annual letter to shareholders. “Even if your borrowings are small and your positions aren’t immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions.”

Munger said he and Buffett had been “very cautious” in handling their shareholders’ money over the years. Berkshire shareholders tend to be long-term investors like all the conglomerate’s top executives, often treating their stock like a savings account.
“If Warren and I had owned Berkshire without any shareholders that we knew, we would’ve made more. We would’ve used more leverage,” Munger said in the CNBC special.
Still, Munger acknowledged that Berkshire did use leverage in the form of its insurance float. Insurers receive premiums upfront and pay claims later, so they can invest the large sums collected — cost free — for their own benefit.
“Insurance float gave us some leverage. That’s why we went into it,” he said. More

Robinhood CEO Vlad Tenev defended payment for order flow (PFOF), saying it’s “inherently here to stay.”
PFOF describes the practice of routing trades through market-makers like Citadel Securities in return for a slice of the profits.
It is viewed as controversial because of the perceived conflict of interest it creates between the broker and clients.

Vlad Tenev, co-founder and CEO of Robinhood, rings the opening bell at the Nasdaq on July 29, 2021.
Source: The Nasdaq

Robinhood CEO Vlad Tenev says he doesn’t believe that the payment for order flow (PFOF) model of market-maker routing that the company incorporates in the U.S. is under threat.
That’s despite calls from notable consumer trading advocates and regulators for a ban on the practice.

Speaking with CNBC, Tenev defended the practice of PFOF, saying that it’s “inherently here to stay.” PFOF is the practice of routing trades through market-makers like Citadel Securities in return for a slice of the profits.
“If I’m a business that’s selling things, and I’m generating transaction revenue, the more you use it, the more money you get. Inherently, there’s a conflict there because I make more money by getting you to transact more,” Tenev told CNBC in an interview.
“I think it’s important not to take the baby out with the bathwater. What does that mean, you shouldn’t make revenue on a transaction-based business? That’s unreasonable. And I think the point has been politicised to some degree.”
PFOF is viewed as controversial because of the perceived conflict of interest it creates between the broker and clients.
Critics say that brokers have an incentive to direct order flow to market makers offering PFOF arrangements over the interests of their clients.

PFOF is banned in the U.K., where Robinhood announced plans to launch Thursday.
The U.S. Securities and Exchange Commission had looked at banning PFOF in light of concerns surrounding the practice, but opted not to, while the European Union has imposed a blanket ban on PFOF.
PFOF accounts for a small chunk of Robinhood’s revenues today, Tenev said, while much of its income today comes from net interest income which is generated from cash in user balances.
Transaction-based revenues, which includes PFOF, decreased 7% in Robinhood’s second fiscal quarter to $193 million.
“If you look at equities, PFOF in particular, it’s about 5%. of our revenue, so a much smaller component of the overall pie. And we’ve diversified the business quite a bit,” including other areas like securities lending, margin, and subscriptions.

Robinhood’s race to the bottom on commission fees has forced many major players in the wealth management world to slash their own fees to zero, in turn causing some companies to wind up or sell up to competitors.
TD Ameritrade was sold to Charles Schwab for $26 billion, while Morgan Stanley bought E-Trade for $13 billion.
“In the U.S., Robinhood came along and really changed the industry,” Tenev said. “The discount brokers that are charging commissions essentially ceased to exist.”
“They had to drop commissions to zero. A lot of them couldn’t survive that transition as standalone companies and ended up consolidating. And we’re still living through the the end result of that.” More