Dear Mr. Berko: Charles Schwab is forcing all customers out of sweep money market funds and into bank accounts. My current sweep account pays 0.88 percent, and the bank account pays a lousy 0.1 percent. Schwab is giving us no choice in this matter. It claims it has something to do with the Dodd-Frank reforms, which were enacted eight years ago. On the phone, the manager claims there’s some regulation in effect now. Please write about this. Do Fidelity and others do this? By the way, you need to get a Gmail account. Yahoo is useless now.
— B.W., Kankakee, Ill.
Dear B.W.: Verizon Communications (VZ-$54) has a new division called Oath. Sadly, management assigned an unproven toady (Tim Armstrong) to head it. Oath consists of brands under the umbrellas of AOL, which was acquired in June 2015, and Yahoo, which was acquired in June 2017. I’m told that this guy Armstrong lacks the capability, the creativity, the employee support and the joie de vivre to run Oath. He certainly was a big-time loser when he was CEO of AOL, a great company with enormous potential that lost its cache and was forced to be absorbed by a larger company to remain in business. Eventually, Yahoo will slowly disappear into the ether just like AOL and become a relic.
Yes, today’s Yahoo functions like a cumbersome, arthritic remnant of the old internet. It’s enough to give you a migraine. You can Google “What are the problems with Yahoo?” and read pages of complaints. One of the complaints is the flood of sickly advertising that one must constantly click away to read the answers concerning the subject matter about which you inquired. And as you said, its email stinks, too. I am very familiar with Google and wish I could change. However, there are so many folks out there who are familiar with my current email address, and a change would certainly put those readers in a high state of dudgeon, giving them agita, the shakes and a vexatious attitude. People don’t like change.
Charles Schwab (SCHW-$54) is an exceedingly well-managed, high-class, low-fee holding company engaged in wealth management just like UBS, Raymond James and J.P. Morgan. However, Schwab’s not involved in investment banking, in which brokerages sell their souls for business. Unlike those of other brokerages, Schwab’s employees are so darned nice and patient on the phone that they seem to be staking happy pills, but I’ve found that they’re just good people. Schwab has impressive numbers — strongly growing revenues, outstanding margins, good income growth and an improving dividend record — and a management team that makes it an attractive long-term investment at today’s $54 price.
