The Public Investment of Saudi Arabia’s Ambitious Global Investment Strategy

With everything going on in 2020, it can be easy to ignore one of the biggest storylines that has been somewhat quietly developing–namely, the Public Investment of Saudi Arabia has been aggressively buying up large ownership stakes in many American and British corporations. 

Specifically, in 2020, Saudi Arabia’s investment arm has made the following acquisitions: $828 million in BP stock, $714 million in Boeing stock, $523 million in Facebook stock, $522 million in Citigroup, $514 million in Marriott stock, $496 million in Walt Disney, $491 million in Cisco, $484 million in Royal Dutch Shell stock, $481 million in Suncor Energy stock, $416 million in Live Entertainment, $408 in Canadian Natural Resources stock, and a hodgepodge collection of sub-$100 million investments in Berkshire Hathaway, Qualcomm, Pfizer, IBM, Starbucks, ADP, and Union Pacific. In addition, the Saudi Investment Fund purchased Newcastle United (you know you’re in strong financial shape when a professional … Read the rest of this article!

Stock Market Irrationality in a Bull Market

A reason why index funds that track things like the S&P 500 have become popular in recent years is that each investor is shielded from seeing the volatility of individual components that can promote irrational selling. If someone owned Visa and Chevron outright over the past year, he might discount the excellent performance of Visa and fret over the fluctuation in Chevron that took the price of the stock from over $130 to under $70 at some point in the past few months. And yet, if someone owned an S&P 500 that contained Chevron, they would never actually see the Chevron stock individually swing in stock price because its performance would get blended in with hundreds of other companies. It’s all irrational, yet Dalbar studies show that the typical investor churns over individual stocks at almost triple the rate of S&P 500 index funds.

There are circumstances, however, when it … Read the rest of this article!