Here are three of the week's top pieces of financial insight, gathered from around the web:
Carvana CEO's very, very rich dad
"Aside from Jeff Bezos, Mark Zuckerberg, and the founders of Walmart, no individual has earned more from selling stock in their company" since the start of 2020 than the father of Carvana's CEO, said Ben Foldy at The Wall Street Journal. The ownership structure of the online vehicle megastore gives Ernie Garcia III and his father, Ernie Garcia Jr., "almost complete control." As with many digital retailers, Carvana's stock price "soared during the pandemic." Since October, Garcia Jr. has sold $3.6 billion of stock in the company, unloading 30,000 shares a day under an automated program known as a 10b5-1 plan. The plan sells shares at a predetermined rate "to avoid the appearance of trading on nonpublic information." But Garcia Jr. also modified his plan several times as the stock price rose.
Extreme insurance premiums
Extreme weather is contributing to rising home-insurance costs, said Paul Sullivan at The New York Times. Across the country, insurers are raising premiums, in some cases "two to five times a year." Traditional insurers are also denying coverage in riskier ZIP codes, including some of the country's priciest, such as Beverly Hills, which is increasingly vulnerable to fire. In some cases, insurance costs have quintupled. "We just charged someone $1.9 million for insurance in California with a $1 million deductible," said Charles Williamson, the CEO of insurance company Vault. Wealth management firms are advising clients that investing in "loss-mitigation strategies," such as foam-spraying fire-protection systems, may be a better deal than paying for insurance.
Job candidates and social media
"Stop screening job candidates' social media," said the Harvard Business Review. Three recent studies found that hiring managers often are digging up information "they are ethically discouraged or legally prohibited from taking into account when evaluating candidates — and little of it is predictive of performance." The University of Iowa's Chad Van Iddekinge, one of the researchers, says "one of the hallmarks of legal hiring practices is that they focus on behaviors within the work context." But recruiters are frequently "swayed by factors that are supposedly off-limits," such as gambling or alcohol use, that are revealed only on personal Facebook pages. If the company wants to screen social media for "red flags," such as overt racism or misogyny, it's best to have someone other than the hiring manager do it.
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