WM 9 October 2021
Quotes
Lessons & Thoughts
Investing success is about eliminating a lot of idea and focusing on those where the odds are your favour and you have an edge. An edge, does not mean necessarily knowing what you want but knowing what you don’t want. It is also about keeping an open mind to new ideas.
The magic happens in eliminating the noise from the signal
Defi = "decentralised" finance. What is decentralisation? Why does it matter? Basically, it's about the power of network/market vs the power of central control tower.
Learning
Words of wisdom by a former client to students
You learn by overcoming your fears
Suck it up: be a winner or a whiner?
I need to go to the gym
Technical analysis = experience confirming theory
Short term moves are random, Long term moves less so
Culture
Doing > thinking
Being > doing
Top traders
Chose your partner well
Look for the truth
In investing you do not have to act, wait for the fat pitch. Science of hitting Ted Williams
WTF?! This is what you see when you arrive in HK.
Change is the only constant. Only question = is it permanent or transitory?
Adapt or die
Pay attention to catalysts for change
Nature and Art
Macro news
Money
FX
Strong USD
AUDAUDUSD is sensitive to Chinese stocks
Strong dollar is bad for EM
Gold does not like a strong USD either
Silver lining?
Crypto
Fixed income
High yield
JPMorgan CEO is concerned
Lagarde wondering if we are witnessing cyclical or secular inflation
Housing vs Construction
Equities
Dip
SPX target price = expected EPS x target PE
Expected earnings revisions now down
Tax rising
M&A booming
Sentiment
Seasonality: buy end of October
Wait for Volatility to fall
Meanwhile in China
Golden week show of strength
It s raining drones
Bottelnecks
Growth slowing
Some say demand is still strong, slow down is mostly due to supply bottlenecks
Commodities
Nat gas
US calmer on nat gas for now
Electricity
How much would it cost to sort out climate change? 4% of GDP per year, when population growth is 1%!
Putin to the rescue and asking Europe a few weeks before Cop26: are you sure you want to get rid of my gas?
Lumber correction is a reminder that commodity prices are more about supply shortages than about demand.
Wheat
USD cold storage
Coffee
Car demand = cobalt and lithium demand
Transport
Container ship costs = 5x 2020 levels
Inflation
As income stagnates
Despite higher wages and full employment
Food
Wondering why food and bev stocks are down?
CPI outpace economic growth
So what long cycle predictions say
Themes, Sectors & Corporate news
Market internals: the pulse of the market
Concentration of market indices in one sector
Inflation = rising rates = outperforming financials
Inflation = Value > Growth
Energy sector to catch up with energy price
Is your data secure?
Facebook servers went down this week. Why does it matter?
Valuing cybersecurity stocks on P/Sales
Palo Alto, Crowdstrike and Fortinet on 10x sales
PBV is for cyclical mature stocks
PE cyclical growth stocks
EV/EBITDA for growth stocks
P/sales for supercharged growth stocks
P/Total addressable market (TAM) to start up and concept stocks
This is what you pay for cloud plays
Meanwhile "disruption tech fund" ARK looks like a bubble bursting
Not all growth is good growth: remember China?
Brands
Influencers make a fortune on Instagram
Going back to the office?
Prêt A manger index 50% below pre covid levels in NYC
Plastic no longer fantastic
Has the world gone totally mad?
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