MM 10 November 2020

 Quotes

« Speculation is an effort, probably unsuccessful to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming little.” Fred Schwed

Markets & Macro news

"V" like vaccine

Post Covid recovery cyclical stocks surge, Covid winners get squashed.

“V” like recovery

Accordingly, cyclicals surge, defensives less so. Note that for a 0% LT growth defensive equity, a 0.2% jump in bond yield is equivalent to a 4% drop in PE from 18.9x to 18.2x and for a 2% LT perpetuity grower, a 6% drop or 1.7x drop from 30.3x to 28.6x. No wonder value stocks and cyclicals (whose main driver is earnings instead of PE) are surging on the news.

So expect momentum strategies to feel the whipsaw

Might be why the growth oriented S&P500 is hitting some key resistances and was not able to break through it

A whole new world: US Vice Presidents through the ages. Spot the difference

Themes, Sectors & Corporate news

ARK’s themes

    

Carbon taxes are coming. Do you know what is the carbon footprint of your companies and what it would mean if you would charge carbon futures price as operating expenses? As an example, Danone calculated a EUR 0.9bn shortfall in profits in its 2019 annual presentation, if its carbon footprint was to be charged at EUR35/tonne.

What should have been good news for plant-based meat would be "giant"Beyond Meat, was overshadowed by a marked sales slowdown last quarter. The stock is down 25% in pre-market.