To the Editor:
Regarding Facebook and targeted advertising in general (“Meta’s Harsh Reality,” Cover Story, April 22), there are two problems with targeted advertising: 1) Many of the targeted ads are for dubious companies, many of the products are of dubious quality, and often the goods in question are counterfeit or were stolen and are now being sold on Facebook’s marketplace or some other internet marketing site; and 2) the targeted ads for a product (HOKA shoes in your example) keep coming and coming and coming, even if you do not click on the ad or product. After a while, one would think that Facebook would stop showing you targeted ads that one clearly has no interest in (by virtue of not clicking on the ad).
Meta and other platforms need to clean up their act by assuring that the companies advertising on their platforms are legitimate and that the products were not stolen or counterfeit. Then, perhaps, I might actually look at a targeted ad.
Jay Hershberg, Brick, N.J.
To the Editor:
With about $60 billion in cash, some very smart people, and the ability to hire even smarter people, I wouldn’t bet against them. Their ability to replicate their competitors’ products and successes, much like Microsoft has done for years, should not be underestimated. With so much skin in the game and so much at stake, Mark Zuckerberg, Sheryl Sandberg, et al will probably find a way back to prosperity. Meta might be the buy of a lifetime for patient investors if the stock craters further when earnings are announced next week.
Peter Brooks, On Barrons.com
The Fed’s Dilemma
To the Editor:
If bond yields nearing 3% is a bad omen for stocks, what will happen when interest rates provide a real return to creditors, as they have pre–modern monetary theory? (“The Fed’s Interest Rate Hikes Could Be Even Worse Than Feared,” Up & Down Wall Street,” April 22). With nominal yields at 3% and inflation well beyond 6%, buyers of the 10-year Treasury will lose purchasing power. Historically, lenders demanded the rate of inflation plus 2% to 3%. Interest rates below the level of inflation invite speculators to borrow and buy assets like real estate, art, commodities, and collectibles, exacerbating the price spiral.
The severe decline in equities may finally reflect the fact that the so-called Fed put has expired. With the federal-funds rate at 0.25% to 0.50% there is no room to lower rates, nor is the central bank in a position to add to its balance sheet. In both cases, quite the opposite is true. The old maxim, “Don’t fight the Fed,” was frequently quoted as the explanation for the massive rise in equity prices, but doesn’t that saying cut both ways? At this point, there may be two logical outcomes, neither of which is optimal for the stock market. First, the Federal Reserve continues to raise rates and run off its balance sheet, and second, the Fed takes its foot off the brakes because we are in a serious recession.
Robert M. Sussman, Paradise Valley, Ariz.
Silver vs. Gold
To the Editor:
As it did in the “Great Inflation” of the late 1970s to early 1980s, and the 2009-11 rally, as well, silver seems likely to outperform gold on a percentage basis (“Gold Is Heading Higher as Inflation Rages. Why the Next Stop Could Be $3,000 an Ounce,” The Economy, April 22). Currently in the low $20s per ounce, silver is historically cheap in relation to gold on a price ratio basis, and it seems likely that the vast global middle class will see it as more affordable than gold as an inflation hedge. Silver is also a strategic metal used in such things as solar panels and other electronics. If demand continues to surge, the silver price should move into the $30s at least, but a new high above $50 an ounce seems possible. This move could occur sooner than most people expect, since investment frenzies in the internet age seem to move at the speed of light.
Albert Nyberg, Vista, Calif.
Altria, Dividend Champ
To the Editor:
Despite two articles on dividend stocks in last week’s issue (“6 Dividend Stocks to Help You Whip Inflation Now,” April 22, and “Yes, YouCan Get Dividend Yields Around 5%. Here’s How,” Income Investing, April 22), there’s nary a mention of Altria Group, the dividend champion of the world. The stock touched multiyear highs last week and is up over 17% this year, compared with the S&P 500 index, which is down more than 10% year to date. Even still, Altria offers a 6.5% yield and is trading at only 11.5 times forward earnings.
Many consumers purchase their cigarettes at gas stations. With higher gas prices, smokers could trade down from premium brands like Marlboro to discount brands to save money. Hopefully, management will shed some light on this during the coming week’s earnings call. Atria has been a dividend darling for decades—there’s little reason to suspect that it won’t continue raising its dividend more than inflation for years to come.
Karl Kaufman, Boca Raton, Fla.
Exponential Growth
To the Editor:
Regarding “This Veteran Investor Is More Optimistic Than Ever. What He Thinks About Tesla and Other Growth Stocks” (Interview, April 22), Baillie Gifford’s James Anderson is right that technology grows exponentially. There are new technologies available that companies could capitalize on, but they aren’t aware that the opportunity exists. For example, eVTOL [electric vertical takeoff and landing] taxis and drone delivery are happening, but governments are still building bridges and freeways. Social science, politics, governance, management, and even education never really progress, but technology advances exponentially because it grows itself.
Dan Laramie, On Barrons.com
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