BAM Blog - Extended Thoughts on Market Events and Commentary: 2017

Who's been buying this market? Turns out it's companies themselves. They have bought more than $3 trillion of their own stock since 2009 - dwarfing any other buyer as the biggest ally of the bull market. That may be starting to change as corporate interest has now been in decline over the last year. With new bull market highs it appears that (as is often the case) individuals that have missed much of the rally are now piling in. Often those that are late to the party are left holding the bag.

It should be noted that as corporations have been buying back their stock over the last several years, it serves to prop up their earnings (fewer shares outstanding divided by earnings equals higher earnings per share). We'll see over the coming quarters if these same companies can continue to produce earnings without reducing their shares outstanding.

Friday, September 15, 2017

BAM MARKET NOTE

THE TREND IS YOUR FRIEND

EQUIFAX BREACH -WHAT TO DO

With the recent announcement of the hacking of Equifax, several friends and clients have asked us what they need to do. Equifax's response to date has been a history lesson in how not to handle a crisis. Their failure to properly handle sensitive data and their appalling lack of response has left many to wonder what they should be doing. While we do not claim to be experts in identification theft and internet security, we do have a few thoughts.

First, you should assume that your information has been compromised. This is not meant to be alarmist but rather the facts as have been reported. Equifax states that data on 143 million consumers was potentially exposed. With the US population at 375 million, that means 38% (taking out children and those without credit and the percentage is much greater) of the US population could be impacted by the breach in security. Second, you should sign up for credit monitoring. Equifax is offering this for free for the next year. Details can be found here. Third, you should review your credit card and bank account statements monthly for unauthorized activity. You really should be doing this anyway (I have found unauthorized charges, overcharges, and duplicate charges several times over the last few years). Remember you have 60 days to dispute a credit card charge so waiting to review your statements could prevent you from disputing them. Lastly, you should consider putting a freeze on your credit. Putting a freeze on your credit will prohibit the credit bureaus from releasing any of your information to anyone. Before putting a freeze on your credit, it should be noted that any requests made by legitimate sources will be denied. So, for example, if you are opening up a new credit card account, applying for a mortgage, or refinancing, or any legitimate activity you undertake that involves accessing your credit report, that request will go unfilled. You are able to unfreeze and refreeze your credit report but it can become laborious if you do it often. The freeze would not affect any of your existing sources of credit. If you are in a position in life where you are not accessing new credit or have no other legitimate sources accessing your credit history, then you would be a prime candidate for placing a freeze on your account. Costs and procedures vary by state. You can find the Tennessee rules here. Additional credit freeze information can be found here. Note that you will have to go through the freeze procedures for each of the three credit bureaus (Experian, Equifax, and Transunion). Here is a good summary of the procedures needed to freeze your credit.

While the breadth of the breach and its impact on everyday Americans is yet to be determined, the security (or lack thereof) of your identity is becoming a fact of life in this digital age. Please note that Bills Asset Management takes every precaution necessary to protect your important data. We'll pass on more information as we become aware of it. In the meantime, feel free to reach out to us with any questions.