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25 Nov, 5 tweets, 1 min read
1) The "Roaring 20s" followed World War I and the Spanish Flu.

Interested to see if history repeats and we have another "Roaring 20s" following Covid.
2) Think there is a reasonable chance that the two year period from mid 2021 through mid 2023 will see the strongest demand *ever* for leisure travel and apparel.

Credit to Evercore for the idea.

Time will tell!
3) Want to clarify that my “Roaring 20s” comment referred to consumer behavior, not a decade long bull market.

I rarely have an opinion on the overall stock market and certainly don’t have any demonstrated ability to consistently time the market. See:

medium.com/@gavin_baker/r…
4) I do think that the “Roaring 20s” consumer behavior thesis is more priced in for travel related names than for apparel names.

And it does subjectively *feel* like late 99/early 2000 in pockets of the market. i.e. EV SPACs.

Time will tell!
5) Addedum: it has been pointed out to me that David Kostin at GS was the first to make the “Roaring 20s” analogy, not Evercore.

So credit where credit is due and apologies to David who does great work.

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More from @GavinSBaker

Gavin Baker Profile picture
21 Nov
1) “Google will not use data from Google Pay for targeting ads.”

Likely true. And irrelevant.

“Amateurs talk strategy. Professionals talk logistics.”

Targeting = strategy. Attribution = logistics.

The data will be used for attribution.

theverge.com/2020/11/18/215…
2) The combination of targeting AND attribution drives advertising spend.

They don’t need the data for targeting.

Google - like everyone - is *much* better at targeting than they are at multi-touch attribution.

Last click attribution was the best possible world for Google.
3) The problem is that Facebook has successfully moved the world to multi-touch attribution. The Facebook pixel is everywhere.

I will never forget Sridhar saying at a conference circa 2015/2016 that Google had to accept that the world had moved to multi-touch.
Read 12 tweets
Gavin Baker Profile picture
15 Nov
1) Last week was obviously a huge rotation towards reopening & travel names on the Pfizer news.

Reopening and travel baskets were up +12%ish vs. Megacap Tech, Software and Stay at Home baskets down -2 to -6%. Insane moves in the Momentum factor.

Moderna news likely next week.
2) Curious to see how the market trades on the Moderna readout and likely Regeneron approval given Covid third wave, increasing lockdowns and credit card data rolling over hard.

Setup and positioning are quite different now vs. going into the Pfizer news.
3) Tech and WFH names were strong the day of the election and were especially strong the Wednesday immediately after Biden won.
Read 12 tweets
Gavin Baker Profile picture
22 Aug
1) Ken Grant was the head of risk at Tudor and SAC.

The analogy he made in his book “Trading Risk” between Julius Caesar and Augustus always stuck with me.

Here are his “10 Commandments”

genriskadvisors.com/risk-philosoph…
2) “No matter what your market orientation, you are likely constrained, in gravity-like fashion, by one unshakeable reality: there is a finite amount of money that you are able to lose and still remain in the game.”
3) Permanent loss of capital is the most significant risk, but there are many forms of risk and uncertainty when it comes to investing.

Volatility is a legitimate way to think about risk because LPs don’t always control when they have to withdraw capital.
Read 8 tweets
Gavin Baker Profile picture
2 Jun
1) Instinct is that risk/reward on the market is deteriorating rapidly, but thought I would highlight parts of the bull case that had struck me recently.

Sentiment and positioning are overwhelmingly bearish. Chart via the superb GS macro/hedge fund specialist team.
2) Valuation for the broader market remains attractive, especially when comparing dividend yield to interest rates and suspect we have seen most of the dividend cuts. Chart via ERP. Goldstein is the 🐐 when it comes to strategists.
3) Liquidity is an overwhelming tailwind. Would ordinarily dismiss “price to liquidity” as prima facie absurd but Darda was one of the few who was bearish going into 2008-2009 and then got bullish towards the bottom. And liquidity always paramount - see Druckenmiller comments.
Read 6 tweets
Gavin Baker Profile picture
30 Apr
1) "You want to cheat the laws of physics, you don't want to confront them." - Jensen Huang

Great interview for anyone interested in semiconductors and datacenter architecture.

nextplatform.com/2020/04/27/nvi…
2) Vastly more venture $ have gone into AI accelerators vs. SmartNICs which will help "cheat the laws of physics" by putting more processing and intelligence in the network.

Suspect SmartNICs will end up being a much better investment.
3) History of semiconductors suggests it is really hard to dethrone a dominant incumbent.

CPUs: ARM couldn't displace x86 in PC/Server, x86 couldn't displace ARM in handsets, AMD has never displaced Intel in x86.

Similar story in GPUs & basebands - same #1, same architecture.
Read 9 tweets
Gavin Baker Profile picture
28 Apr
1) So far in the battle of the irresistible force of the largest stimulus ever vs. the immovable object of the sharpest economic slowdown in history, the irresistible force is *overwhelmingly* winning.
2) Market has been rallying on new cases declining, massive stimulus, cleaner positioning and the fact that large parts of the economy will begin reopening - rightly or wrongly - by Memorial Day along with the reality that many of the largest index components benefit from Covid.
3) The market is always anticipatory - and it ripped into the economy reopening vs. around the economy reopening

Even after 20 years, I am surprised by just how anticipatory the market is. I thought I was weeks early writing this vs. only days early.

medium.com/@gavin_baker/v…
Read 18 tweets

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