MM 8 February 2021

Quotes

The four ennemies of the investor: greed, fear, hope and ignorance

Hope is not a good strategy.

Things change (eg remember 1996)

Markets & Macro news

On the difference between monetary and fiscal stimulus

As bond prices fall, equities continue to serve as recipient of money flows

Indeed, short term yield set to stay low

Just as inflation is surging even as the US and Europe are still locked down. 2y US treasury yields at all-time lows at 0.1013%, despite CPI on course to reach at least 3-5%

Even NatGas is starting to move!

Inflation is targeted as only way to reduce debt as % of GDP. This led to runaway inflationary bear market of the 1970s

The parallels between the 1960's Go Go years and 1990's Internet bubble are there, not least with the media obsession with star growth stock fund managers

Nifty Fifty 1960’s: Gerald Tsai's Manhattan fund

Internet bubble 1990's, Gary Pilgrim's PBHG Growth fund

This bubble 2020s, Cathie Wood' ARK fund

So a 30 year cycle phenomenon? Note that at the end, each one of these bull markets crashed and were followed by commodity booms.

A correction is overdue

And not just because of technicals, valuations look stretched too

FOMO meets NOPE

But stock market technical set up on dangerous grounds

North Asia vs USA turning to the advantage of North Asia

Too much debt

Themes, Sectors & Corporate news

CEO change (here Jeff Bezos departure)

If charismatic leader walking on water leaving, then sell (eg Jack Welsh at GE, Terry Leahy at Tesco, Steve Jobs at Apple, etc). If bad CEO replaced by new team, some kitchen sink and then improvement.