Do fundamentals even matter?
We may be near to, or ,many years away from,/ a reality check .
Wakeup calls are met with " This Time Is Different" insults.
Still lets try...Howard Marks had called a Dot Com Bubble in 1997. It took 3 years more to come true.
Lets see 1/n
Joby Aviation, which plans to begin an electric air taxi service in 2024, is worth more than Lufthansa, EasyJet or JetBlue. Do Fundamentals even matter ?
In January Tesla was worth more than the next nine car manufacturers combined. Now its market cap is higher than only the next six. Do Fundamentals even matter ?
Saw an IPO filing in an industry where my friends created a fantastic business and sold it to a Japanese conglomerate.
The claims in the filing seemed outlandish so called a few veterans of the market. 1/n
One " Story tellers have taken over fund raising.On the other side, beneficiaries of Note printing are over eager to colour the stories these imaginative,creative artists have spawned.Some will deliver good business performances,most will become giant regrets " 2/n
Second:"Its worse than 2000. In 2000,companies went public early so the retail investors lost a lot,but at initial levels of valuation. Now PE funds are dressing up companies for years & then palming them off at fantastic valuations.The losses will be much larger.Unfortuante."3/n
El Salvador’s new bitcoin wallets could cost Western Union $400 million a year: In 2020, El Salvador received nearly $6 billion in remittances, which accounted for about 23% of its gross domestic product.
President Nayib Bukele estimates that money services providers like Western Union and MoneyGram will lose $400 million a year in commissions for remittances, thanks to the country’s bitcoin adoption.
Some 70% of the Salvadoran population receives remittance payments. 2/n
Remittances are one area where the status quo in the legacy financial system is terrible, with extraordinarily high fees leveled at populations that can ill afford them 3/n
Ukraine is the latest country to legalize bitcoin as the cryptocurrency slowly goes global .Ukraine is the fifth country in as many weeks to lay down some ground rules for the cryptocurrency market 1/n
In a nearly unanimous vote, the Ukrainian Parliament adopted a law that legalizes and regulates cryptocurrency.Until now, crypto in Ukraine has existed in a legal gray area. 2/n
Unlike El Salvador’s move this week to adopt bitcoin as legal tender, Ukraine’s crypto law does not facilitate the rollout of bitcoin as a form of payment, nor does it put it on an equal footing with the hryvnia, the country’s national currency. 3/n
Billionaire John Paulson Who Shorted Subprime, Calls Crypto ‘Worthless’ Bubble :
1.Ever since John Paulson bet against the U.S. housing market more than a decade ago, making $20 bn for himself and investors,people keep asking him about his next big trade. 1/n
2. Paulson is again seeing signs of excessive speculation and is increasingly concerned about rising prices.Rapidly expanding money supply could push inflation rates well above current expectations,he said, and gold, which he’s backed for years, is primed for its moment. 2/n
3.His harshest words are for the hottest investments of this era.SPACs, on average, will be a losing proposition,while cryptocurrencies are a bubble that will “eventually prove to be worthless.”
“I wouldn’t recommend anyone invest in cryptocurrencies” 3/n
Impact of Powells Jackson Hole Speech on the markets: 1. Still in consideration on Taper of USD 120 bn of monthly purchases by the Fed.
2.Many Wall Street strategists have December as their baseline Taper start-date, so that is the neutral scenario going ahead. 1/n
3. Powells speech was seen as Dovish by the markets, in that there was no nasty surprise as given in the prior Fed meeting .Sep Fed meeting may lay down a time table.. 4. The three main scenarios then are: December lift off (neutral), earlier (hawkish) and later (dovish).
5. Gold bounced over 1% on Friday after Federal Reserve Chair Jerome Powell stopped short of signaling when the U.S. central bank would start withdrawing its economic support and reiterated his view that current price spikes are transitory. 3/n
Stripe’s John Collison: The Best Of The Connected Future Is Still To Come. After 16 months of hyperactive change and adaptation, Collison points to the big picture that will emerge as a result of jamming 10 years of progress into a year and a half. 1/n
“We saw two million new businesses created on Stripe since the start of 2020.That's more than the number created in Stripe’s lifetime up to this point. I think what those two million businesses do will surprise us.” 2/n
Many of the businesses are from verticals that were slow to digitize. Healthcare is one striking example, as necessity pushed the long-reluctant segment to embrace technology that it has spent the better part of the last decades avoiding. 3/n
Banks Should Fear Walmart: Citigroup
“While much has been made about the competitive threat of challenger banks/neobanks to the traditional bank business model, it’s our view that a competitive threat such as WMT is likely a more potent one,” Citigroup 1/n
Banks have to get ready for a new—and almost unimaginable—opponent.
They’ve always competed with each other. Then, fintech firms such as PayPal and Square came nipping at their market share. And now the largest U.S. retailer, Walmart is lurking. 2/n
Walmart wouldn’t need to have a bank charter,or be a fully fledged bank,to enter the fray.Just by offering a few financial services and tapping into its vast store-and-customer base,it can be a “potent” threat. The company already offers 2 credit cards and debit/prepaid cards.3/n
Accenture Reports Very Strong Third-Quarter Results and Raises Business Outlook for Fiscal 2021
-- Revenues are $13.3 billion, an increase of 21% in U.S. dollars and 16% in local currency --
-- EPS $2.40, a 26% increase --
-- Operating income increases 24% to $2.1 bn, operating margin of 16 %,up 40 basis points
-- New bookings are $15.4 bn, a 39% YoY increase in U.S. dollars from the third quarter last year,with consulting bookings of $8.0 bn and outsourcing bookings of $7.4 bn 2/n
-- raises its business outlook for fiscal 2021; now expects full-year revenue growth of 10% to 11% in local currency; operating margin of 15.1%; GAAP EPS of $9.07 to $9.16; andfree cash flow of $8.0 bn to $8.5 bn 3/n
China Orders State Firms to Curb Overseas Commodities Exposure and announces it will release base metals from its emergency reserves 1/n
Chinese authorities have stepped up their efforts curb commodity prices after ordering state enterprises to control risks and limit their exposure to overseas commodity markets. 2/n
In addition, the China National Food and Strategic Reserves Administration will soon start to release national reserves of copper, aluminum and zinc which will be sold in batches to fabricators and manufacturers. 3/n
Ferrari Hires IPhone Innovator as CEO to Hasten Tilt to Tech : highlighting the growing dominance of technology in the auto industry that’s witnessing its most profound transformation in more than a century.
Benedetto Vigna, 52, from chipmaker STMicroelectronics NV will become Ferrari CEO starting Sept. 1. The appointment is a watershed moment for incumbent carmakers that have rarely looked outside the sector and haven’t named tech leaders to their top job. 2/n
“Appointing someone relatively young,from the technology field sets the tone for where Ferrari is headed,” Tom Narayan,RBC Capital Markets.“The biggest issues Ferrari will face over the next decade will be adapting to the changing auto technology landscape as a luxury brand.” 3/n
Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping. 1/n
With upwards of 80% of all goods trade transported by sea,freight-cost surges are threatening to boost the price of everything from toys, furniture and car parts to coffee, sugar and anchovies, compounding concerns in global markets already bracing for accelerating inflation. 2/n
A confluence of factors-soaring demand,a shortage of containers,saturated ports and too few ships and dock workers-have contributed to the squeeze on transportation capacity on every freight path. Recent Covid outbreaks in Asian export hubs like China have made matters worse 4/n
How will the Electric Vehicle transition impact legacy minerals / metals production?
This is the reason I am firmly voting for a Commodity Supercycle continuing .
Read on... 1/n
To switch UK’s fleet of 31.5 mln Internal Combustion Engine Vehicles(ICEVs)to battery-electric vehicles (BEVs),it wud take an estimated
207,900 tonnes cobalt,
264,600 tonnes lithium carbonate,
7,200 tonnes neodymium
and 2,362,500 tonnes copper. Read on ...2/n
This amount is:
twice the current annual world production of cobalt
an entire year’s world production of neodymium
and three quarters of the world production of lithium.
Just for the UK
Zoom Video Communications was trading slightly higher in late trading Tuesday, on better-than-expected results for its fiscal first quarter ended April 30. 1/n
Shares of Zoom gained 1.5%, to $332.52. The stock is down about 43% from its pandemic era peak at nearly $589 hit in October. 2/n
For the quarter, Zoom posted revenue of $956.2 million, up 191% from a year ago, growth in each of the last three quarters was above 355%; for this company, growth of nearly 200% represents a considerable slowdown. 3/n
China’s runaway economic recovery has been so successful that it has caused power shortages across dozens of its manufacturing and industrial hubs in the south of the country. 1/n
Factories across cities such as Guangzhou, Foshan and Dongguan, known for producing global consumer and high-tech products, have been ordered to use less power and even close for between one to three days a week to mitigate the shortfall.
Klaus Zenkel, chair of the EU Chamber of Commerce in South China, said that about 100 of the organisation’s companies were affected and further shortages risked having an adverse impact on foreign investment in the region. 3/n
Remembering the great Credit maestros /specialists who taught us basic banking that was forgotten in the period leading upto 2008 and caused the Global Financial Crisis and markets meltdown . 1/n
We were taught that Five Cs are critical in banking when you extend Credit to anyone : 1. Character : this reflects the track record, willingness to repay, all the qualitative aspects of the management and the borrower . This assessment comes with experience of credit cycles 2/n
The Next C is : 2. Capacity : This includes all the financial metrics from various ratios like debt/income to cash flows . Its basically the Capacity to service the loan from cash flows and not from hope 3/n
What we know of the Archegos Capital affair so far.
Global traders are bracing for what’s shaping up to be one of the most anticipated opens for U.S. equities in months following an extraordinary $20 billion wave of block trades Friday that rattled investors worldwide. 1/n
Archegos Capital is the family office of Sun Kook “Bill” Hwang who worked for Julian Robertson at Tiger Management and set up Tiger Asia Management with seed funding from Julian Robertson 2/n
In December 2012, Bill Hwang admitted to illegally using inside information to trade Chinese bank stocks and agreed to criminal and civil settlements of more than $60 million. 3/n
Archegos Capital Management LLC controlled by former Julian Robertson protege and Tiger Management analyst Bill Hwang is rumoured to have faced margin calls on Friday leading to billions of dollars of stock sales by investment banks 1/n
Goldman Sachs Group Inc. liquidated $10.5 billion worth of stocks in block trades on Friday, part of an extraordinary spree of selling that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates. 2/n
Goldman sold $6.6 billion worth of shares of Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. It also sold $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc. 3/n
How much is the epic traffic jam in the Suez Canal costing the world? The short answer: a lot.
The Ever Given ran aground Tuesday, blocking $10 billion of oil and goods that sail through the passage on a typical day. 1/n
The charterer of a very-large crude carrier is racking up charges of between $30,000 to $80,000 a day to park the tanker off Suez waiting for the canal to open 2/n
The cost to ship a 40-foot container from China to Europe has climbed to about $8,000, almost quadruple the figure a year ago. 3/n