Fact of the Week:
Since 1999, the average annual increase in U.S. family health insurance premiums has been 6.1%, significantly outpacing the 2.5% yearly rise in CPI inflation.
Stocks Stage a Rebound as Big Tech Roars Back
A week after its steepest sell-off since January 2022, the tech-heavy Nasdaq rebounded with a 5.95% gain, fueled by excitement around AI. The S&P 500 also staged a strong recovery, advancing 4.02%, after experiencing its largest decline since March 2023. Small caps participated in the rally, with the Russell 2000 climbing 4.36%.
However, not all major indices enjoyed the same enthusiasm. The Dow Jones Industrial Average lagged, “adding just” 2.6%, weighed down by its more traditional, less tech-heavy names.
Big Tech Powering the Rally
The equal-weighted S&P 500 lagged the cap-weighted version by 134 basis points. Highlighting the market dynamic where heavyweights like Nvidia (+15.8%), Amazon (+8.8%), and Microsoft (+7.2%) are continuing to do the heavy lifting.
Sector Winners and Losers
Technology was the clear standout, surging 7.33% as the AI growth narrative gained even more traction, with companies like Nvidia and Oracle (+14.3%) stealing the show. Consumer Discretionary also had a strong week, up 6.14%,
On the flip side, Energy was the only sector to post a decline, down 0.74% despite crude oil advancing 1.2% after last week’s large decline. Financials eked out a modest 0.49% gain.
From the Week:
As the owners of two of the world’s most iconic sports franchises—the New York Knicks and the Rangers—Madison Square Garden Sports Corp. (MSGS) naturally makes headlines in the sports pages. However, many overlook the compelling story it has to tell in the financial section. In a recent article for the prominent Spanish newspaper La Vanguardia, we peeled back the business of MSG Sports to examine how its legendary brand could offer significant long-term value for investors. Whether you're a fan of sports, finance, or both, there’s much to discover as we examine this opportunity through the lens of value investing.
Noche UFC: Vegas Sphere’s $20M First Live Sports Event Shows Venue’s Potential - Bloomberg
The Family Rift Driving Rupert Murdoch to Redo His ‘Irrevocable’ Trust
Uber and Waymo Expand Driverless Ride-Sharing Partnership to Austin, Atlanta - WSJ
What do these three articles have in common, aside from being intriguing reads? They all highlight companies—Sphere, News Corp, and Uber—that were recently featured in our latest Fresh Looks issue. To get your copy, click the link below:
Notable Reads:
Your 529 College-Savings Plan Can Now Fund a Roth IRA
https://www.wsj.com/personal-finance/taxes/529-roth-ira-rollover-3e4850aa
It happens more than you think, given the spiraling costs of college: People who save money for a child’s education expenses in tax-favored 529 plans wind up with leftover dollars in them. Perhaps the student got a scholarship or chose a lower-cost school—or even took a different path in life.
Now there’s a new way to tackle this problem. A law that took effect this year allows unused 529 funds to be transferred to Roth IRAs tax-free, up to certain limits. Often this move will cost less than simply withdrawing extra funds, which could bring taxes and a penalty.
Roth IRA sponsors, including Fidelity Investments, Vanguard Group, and Charles Schwab, are ready for these rollovers and have posted forms for them on their websites. While the Internal Revenue Service still needs to clarify some issues, many 529 owners aren’t affected and can proceed.
Our Take:
This is essential reading for every parent or grandparent: A new law allows unused 529 funds to be rolled over into Roth IRAs—tax-free, subject to certain conditions. What’s especially noteworthy is that the usual Roth IRA income limits don’t apply, offering a valuable opportunity for those who might not otherwise qualify. It’s a smart, tax-efficient way to help secure your children’s or grandchildren’s financial future.
Inside Elon Musk’s Mushrooming Security Apparatus
https://www.nytimes.com/2024/09/13/technology/elon-musk-security.html
The day before Elon Musk spoke at a celebration for Tesla’s futuristic Cybertruck pickup in November, a Florida man, Paul Overeem, was arrested near the company’s Austin, Texas, factory and accused by the authorities of planning a “mass casualty event” there.
The incident later made headlines. What went less noticed is what happened at Tesla’s event, which went ahead at the Austin factory.
Security had been alerted to Mr. Overeem’s threats and was fully activated, according to two people with knowledge of the arrangements and documents viewed by The New York Times. The list of invitees was carefully curated, with each person screened well ahead of time. More than three dozen Tesla security officials were then stationed throughout the room when Mr. Musk, who runs the carmaker, took the stage. He also had bodyguards from his private security firm, Foundation Security, on hand…
Our Take:
This fascinating read brings to light two critical issues that investors should be paying close attention to. First, the key man risk surrounding Elon Musk for his various companies—a potential vulnerability that could impact their future. Second, it raises an important question: should shareholders be responsible for covering the costs associated with Musk’s increasingly high-profile and controversial persona? As Musk’s fame and security needs grow, it’s worth considering whether the line between personal and corporate expenses is being blurred.
Important Disclosures. The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinions expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal.
Important Information: Performance Information. Past performance does not guarantee future results. The reports in this sample are for informational purposes only and the performance of the stocks selected is not indicative of the performance of all the stocks profiled in Boyar Research. The performance of the stocks selected and the performance of the stocks in Boyar Research may in fact diverge materially. Additional information regarding the performance of other companies featured in Boyar Research is available from Boyar Research upon request. This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. Clients of an affiliate of Boyar Research and employees of Boyar Research own shares in Uber, News Corp & Sphere