Stocks

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

Stocks

Holding Winners is Hard

  • A nice article showing that holding winners is a trying experience.
  • For example Amazon – “The near-95% crash following the tech bust is the one most people point to. The stock was underwater from 1999 to 2009! But there was a 54% crash from 2005-2006, a 58% dive in 2008 and 5 separate losses of 25% or worse since 2009.“
  • Why is it so hard – “Since 1980, more than 40% of all companies in the U.S. stock market have experienced a decline of 70% or worse without recovering.“
  • This link has a full analysis of the business “failures” 2017-2020 which is worth reading.
Stocks

Growth Premium and Interest Rates

  • Chart from Empirical Research shows price paid for growth (P/E multiple divided by trailing 5 year revenue growth) against the term premium in the bond market.
  • “We’re now exiting a unique period of negative term premiums and growth multiples are still high. As a result, growth stocks are at risk for possibly minor changes in perceptions of future interest rates and inflation, irrespective of what the Fed decides to do and when.“
Stocks

Movies

  • Movies are the second most popular out of home experience in the US.
  • “…the industry sold 1 billion movie theater tickets in the United States, 1 billion. It’s the third most popular out-of-home — sorry, it’s the second most popular out-of-home experience in the United States. Other than going out to eat a meal in a restaurant. If you take the attendance of all 5 major professional sports leagues together, all 150-ish teams, all sports, all games, all season long, movie theaters sold 7x the quantity of every sports event tickets sold in the United States in 2019.” Source.
Stocks

WeWork Resurrection

  • WeWork is trying to go public again, this time via a SPAC.
  • Below is a link to their investment deck. Lots of interesting data.
  • The company lost $1.7bn last year but expects things to improve as normal conditions return.
  • They believe a WeWork solution would save 26% vs. the cost of traditional real-estate.
  • The transaction puts enterprise value at $9bn or 6.6x adjusted 2023E EBITDA.
  • There are a lot of adjustments to EBITDA that need to be looked into and SPAC transactions have issues, but on the surface that looks a lot more reasonable than the peak valuation of $47bn.
WeWork March 2021 PresentationDownload
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.
WordPress Cookie Notice by Real Cookie Banner