CNBC's first Millionaire survey is out, and 94 percent say they still believe in the American Dream. Here is the top news of the day for the busy investor.
NEWS ANALYSIS FOR THE INVESTOR ON MAY 6, 2014
Millionaires attribute their wealth to hard work and smart investing
CNBC is reporting that in its first Millionaire Survey, 23 percent of Millionaires believe their success is due to hard work. They are not ashamed of their success because they worked hard to earn it. Ninety four percent of Americans still believe in the American Dream which they define as “prosperity and upward mobility through hard work”. Two-thirds of Republican millionaires believe anyone can become wealthy compared to only a quarter of Democrats. Seventy eight percent of Democratic millionaires support higher taxes on the wealthy compared to only 31 percent of Republican millionaires. Sixty three percent of Republican millionaires say “hard work” is the number one reason people become wealthy. In contrast, 45 percent of Democratic millionaires believe it is due to a person’s family or place of birth.
Tyson predicts tight food supplies
Tyson forecast tight US meat supplies in the months ahead as farmers deal with illness and drought that have impacted the size of their herds and flocks. According to the Wall Street Journal, shares in Tyson fell 10 percent on Monday despite the fact that it more than doubled its latest quarterly profit. Tyson’s quarterly earning soared to $213 million or 60 cents per share, up from $95 million or 26 cents per share a year earlier. A virus sweeping US hog farms may cut US pork production this summer while domestic cattle supplies will remain light as well due, in part, to the drought of the past few year. Pork production could be down 4 percent this year. The virus is fatal to young pigs and has spread to 30 states since last spring. It has killed 5 million pigs.
How much do hedge fund managers make?
The New York Times is reporting that the 25 highest-earning hedge fund managers in the United States took home a total of $21.15 billion in compensation in 2013. They earned that amount in a year when most hedge fund managers fell short of the market’s returns. This is the highest payday since 2010 and is 50 percent higher than in 2012. David A. Tepper, founder of Appaloosa Management, received the highest pay at $3.5 billion last year after earning $2.2 billion in 2012. The size of their earnings is based upon the value of the managers’ stakes in their hedge funds and the fees they charge. Generally, investors pay 2 percent of total assets under management and 20 percent of profits. Appaloosa funds returned 42 percent to investors.
France demands changes to GEs bid for Alstom
Last week, France urged Siemens to make a counter-offer to Alstom to overcome GE’s bid. This week, France has indicated that it will reject a deal that allows GE to completely absorb the GE business. The French government has the authority to reject a bid for Alstom, according to the Wall Street Journal, because the French government bailed the company out a decade ago. GE has offered Alstom $17 billion to take over its energy assets. The French government has suggested that GE transfer its own locomotive and rail signaling business to Alstom to augment the French company’s high-speed and commuter trains business. That business currently accounts for 30 percent of Alstom’s revenues while the energy assets GE would buy account for the rest. Alstom’s board has approved GE’s offer, however, the French government can block the deal if they believe the business is important to the country for strategic reasons.
America’s most popular stores
According to USA Today, America’s most popular stores are primarily in the fast-food, discount retail and pharmacy segments. Half of the most visited retailers are fast-food chains because people need to eat three times a day and their low prices attract more consumers. American also regularly shop at the biggest drug store chains and the big-box retailers. Additionally, seven of the ten most popular stores are big spenders on advertising. The most popular stores in America are: 1. Walmart; 2. McDonald’s; 3. Subway; 4.Starbucks; 5. Walgreens. Popularity of the stores differs by gender and wealth segments.