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Posted February 06, 2019

Byron King

By Byron King

Worse Than We Thought?

A reader comments on the truth about inflation:

If purchasing power of $2.50 in 1964 is inflated to $22.54 today and wages have been pretty much stagnate for last 40 years we have lost far more than most government economists will admit.

More of your opinions on saving money:

The number one way to save money? Marry a spouse who is like-minded about living frugally. I've married twice and each time thought we were on the same page financially. However, [they]...later developed expensive tastes.

And this...

As a family we buy what we need instead of everything we want and we save the rest. Maybe more people should try it because it works.

Last, financial pundits have been sounding off on their prognostications for the markets in 2019. Some say bull; others bear.

What do you forecast for the year ahead? And are you investing differently because of it?

Your Rundown for Wednesday, February 6, 2019:

Flux Capacitor

On Monday, Tesla announced its buying energy tech company Maxwell Technologies (MXWL) for $218 million. On the news, the companys stock surged more than 48%.

As for the new acquisition, Maxwell Technologies website says:

Our recently developed lithium-ion capacitors are energy storage devices with the power characteristics of an ultracapacitor combined with enhanced energy storage capacity approaching that of a battery. They are uniquely designed to address a variety of applications in the rail, grid, and industrial markets where energy density and weight are differentiating factors.

All that to say, the company makes high-performance, lightweight batteries. Or ultracapacitors. (Shades of Back to the Future.)

Maxwell fits the characteristics of Tesla's typical acquisitions, says Yahoo Finance. The electric-car company usually buys companies with technologies that can help it accelerate its mission to further sustainable energy and ones that are relatively small relative to Tesla's total market capitalization.

Speaking of, Maxwells technically considered a penny stock under $5 per share hovering in the $3 region. Until the announcement Monday; it shot up to $4.65 per share.

As for the companys market cap, that sits at $210.5 million as compared to Teslas at $54.8 billion.

Heres something interesting: Tesla will be paying for Maxwell Technologies in stock rather than cash. Hmm. Tesla must not want to dilute reserves...but might that dilute the companys stock?

Tesla shares dropped 1% Monday but theyve more than recovered since.

We think the purchase of the battery makers a good deal; it should help keep costs down on the Model 3 and even speed up production.

If approved, Teslas purchase of Maxwell Technologies should close Q2 2019.

Market Rundown for Wed. February 6, 2019

S&P 500 futures are down 2.50 to 2,735.13.

Oil is down just 36 cents to $53.30 per barrel.

Golds down, too, $1.90 to $1,317.30.

Bitcoin is down $65.08 to $3,382.84.

Have a good day. Well talk tomorrow.

For the Rundown,

Aaron Gentzler

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