S&P Market-Cap Concentration
Today, the top five—Apple, Microsoft, Amazon, Tesla and Facebook—make up 21% of the index’s total market capitalization forbes.com/sites/jonathan…
18% of market value commanded by the five biggest in 2000, when Microsoft, Cisco, General Electric, Intel and Exxon Mobil were on top
"Given the lack of spending opportunities brought on by pandemic lockdowns, the savings rate among Americans has surged to 13.7% of annual disposable income, compared to just 4.5% in March 2000. "
"Once Covid subsides and life returns to normal, consumer spending could snap back with a vengeance, which bodes well for the economy and possibly the stock market, though it is already benefiting from increased consumer wealth."
"with an average 500 public-market debuts each year from 1995 to 1999. In 2020, there were 538 IPOs, including 248 SPACs, themselves a frothy indicator. "
"Average first-day returns in 2020, including the likes of DoorDash and Airbnb, were 35%, compared to a 75% average first-day boost in 1999."
Buffett Indicator = ratio of the total U.S. stock market capitalization to annual gross domestic product
Put/Call
Put means short or for hedging
Call means long
"Unfortunately, options buyers are notoriously bad investors, and according to the CBOE, some 90% of options buyers lose money. "
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"The demography of sub-Saharan Africa is one of the megatrends of the 21st century. Africa is the only world region projected to have strong population growth for the rest of the century. " adamtooze.substack.com/p/chartbook-ne…
"According to Pew Research, between 2020 and 2100, Africa’s population is expected to increase from 1.3 billion to 4.3 billion. " by @pewglobal
"These gains will come mostly in sub-Saharan Africa, which, even allowing for demographic transition, is expected to more than triple in population by 2100."
Slow Recovery
The projected recovery of the Euro Area is appallingly slow. Whilst the US is now looking forward to a rapid rebound in 2021, the Euro Area is not expected to recover to 2019 levels of output until the end of 2022.
The ECB’s mandate specifies price stability as its objective. It is supposed to keep inflation below 2 percent. Down to the 1990s that would have been a demanding task.
"We are like ants preoccupied with our jobs of carrying crumbs in our minuscule lifetimes instead of having a broader perspective of the big-picture patterns and cycles"
Henry Kissinger, politician, diplomat, and geopolitical consultant who served as Secretary of State and national security advisor under Presidents Richard Nixon and Gerald Ford.
"Whether the Great Depression of 1929, the Japanese bubble bursting in 1988, the dot-com crash of 2000, or the Great Recession of 2008 – all were showing symptoms of a debt crisis long before asset prices plummeted." moneyunshackled.com/2021/01/why-th…
"Short-term debt cycles typically run around 12 years in length on average, with a boom-and-bust pattern of affluence and overspending, followed by austerity and bruised consumers sitting on their cash."
"Long-term debt cycles run far longer, typically around 75 years, or could run the full length of a country’s rise to greatness through to its inevitable decline."
"Ray Dalio says investors are staring down a period of weak returns as low rates inflate asset bubbles — and warns we’re in the ‘problem’ part of the current cycle" businessinsider.com/stock-market-b…
"He said low interest rates are fueling a bubble that will eventually burst.
Major Wall Street banks are bullish on the direction of equity markets, however."
"When you buy things, that means it bids up the price, but it lowers the future expected returns,"
"Moelis, whose firm advises on mergers, restructurings and capital raising, said corporations’ mounting leverage could become a concern if the economy doesn’t bounce back enough to compensate for the additional cash flows companies will need to cover debt. "
"While he doesn’t see a system-wide concern, he warned there could be issues under the surface that only come to light if the market deteriorates."
"Moelis said his firm’s lack of debt gives it flexibility that larger banking rivals don’t have."