Stocks

Interesting, and often contrarian, Snippets on individual companies and the stock market.

Stocks

Automotive Semis

  • Informative post on what is going on in automotive semiconductor markets.
  • Shortages in the short term – mainly because the pandemic wrong-footed car makers.
  • Growth in the long term – driven by the amount of semi-content in a car (an electric vehicle has 110% more content than a conventional vehicle, autonomous driving doubles that).
Stocks

John Lewis Results

  • Results from John Lewis are out.
  • This is a great post from Stephen Clapham pulling out the key insights.
  • Interestingly – “Given the pronounced shift to digital, we reassessed how much shops contribute to whether our customers buy online with us or not. Before the pandemic we believed that shops contributed around £6 of every £10 spent online but we now think that figure is £3. John Lewis shops are now held on our balance sheet at almost half the value they were before the write downs recognised in 2019/20 and 2020/21“.
Stocks

Repairability Index

  • France has introduced something very interesting.
  • From this month on, makers of certain electronic devices, like phones and laptops, will be required to give them a score on how repairable they are.
  • This will allow consumers to chose devices that are easier to repair and incentivise durability.
  • Other countries (including the EU) are looking to follow.
Stocks

Dealer Gamma

  • This chart shows the S&P 500 (green line) vs. dealer gamma exposure (yellow/purple line).
  • “The read is simple: positive dealer gamma means that dealer flow attenuates market flow (i.e. the brakes are on); negative dealer gamma means that dealer flow amplifies market flow (i.e. pedal to the metal).”
  • The level on the 4th of March is 30% more than this time last year – which ever direction the market moves it will be get an extra boost.
  • h/t Squeezemetrics and Threebodycapital.
Stocks

Andrew Lo

  • Andrew Lo is an outstanding academic who’s work uses financial engineering to solve big problems in society.
  • We previously covered one brilliant tool to emerge from his lab – Project Alpha – which tracks in real time probability of success for clinical trials.
  • This is a good article about him and how his ideas about pooling biotech research into a mega-fund has come to life with BridgeBio (IPOed in 2019).
  • He has previously proposed this same idea for Alzheimer’s research, which we critiqued.
Stocks

Pershing Square

  • Pershing Square’s Holdings annual presentation for 2020 is out.
  • 2020 really stood out:
  • +70.2% annual return (the highest annual tally since inception).
  • 36.6%pts of gross return coming from their big CDS bet.
  • 13.1%pts from the IPO and appreciation of the world’s largest SPAC (slide 32).
  • PSH was also added to FTSE 100.
  • Slides cover latest views on their biggest holdings.
Stocks

Twitter

  • There is a lot going on at Twitter.
  • They acquired social podcast tool Breaker, Substack competitor Revue (and cut take rates to 5%), and are developing Clubhouse competitor Twitter Spaces.
  • Financial twitter is alight with commentary on the change going on. This was a brilliant thread (liked by @Jack himself) sent to us (thanks Tom!) on the cultural change going on.
  • This is a nice (fun) write up on the stock – including the narrative change.
  • “In this market, value is dead (jk sorry value folks!), obvious growth is crowded, but finding that inflection point when the narrative around a company switches from dead to very much alive is like finding a magical money printer in a market fueled by a magical money printer. brrrrrr^2” 
Stocks

Space Launch Costs

  • Thanks to commercial rocket development (SpaceX) space launch costs are falling again.
  • “The cost of space launch dropped from very high levels in the first decade of the space age but then remained high for decades and was especially high for the space shuttle. In the most recent decade, commercial rocket development has reduced the typical space launch cost by a factor of 20 while NASA’s launch cost to ISS has declined by a factor of 4.”
  • h/t The Diff.
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