- A sceptics view on ESG full of interesting ideas.
- Current ESG scores are contradictory as seen in the chart showing correlation across providers.
- This point, rarely raised about ESG, argues that markets adjust to price things in – “If there is an investing lesson embedded here, it is the unsurprising one that investors who hope to benefit from ESG cannot do so by investing mechanically in companies that already identified as good (or bad), but have to adopt a more dynamic strategy built around either aspects of corporate social responsibility that are not easily measured and captured in scores, or from getting ahead of the market in recognizing aspects of corporate behavior that will hurt the company in the long term.”
Stocks
Interesting, and often contrarian, Snippets on individual companies and the stock market.
Global Factor Premia
- A site that estimates local factor returns – underrepresented and useful variables in asset pricing models.
- It features twelve common factors for over 50 international markets.
Then and Now
- Snapshot of US stock market, companies and investors in 1976, 1996 and 2019.
- Source.
Battery Prices
- Battery costs have fallen six fold since 2010.
- Nice article on the economics of cheaper batteries.
Listed Companies in the US
- The number of publicly listed companies in the US has fallen since the mid-1990s.
- This chart captures this decline in the total number of listed stocks, including additions and subtractions each year from 1976 to 2019.
- “There are one-half as many public companies as there were in 1996 and three-quarters as many as there were in 1976. The Wilshire 5000 Total Market Index, launched in 1974 to reflect the complete U.S. equity market, had 3,473 stocks as of December 31, 2019.”
- Source.
Public to Private Equity
- “Over the past quarter century there has been a marked shift in U.S. equities from public markets to private markets controlled by buyout and venture capital firms. This change has had reverberations for asset managers, investors, executives, and policy makers.“
- A phenomenal and must read note from Mauboussin.
Institutions Took Over
- “In 1970, individuals held roughly 75 percent of public equities and the institutional investment management industry was nascent”
- This has moved steadily downwards as institutions took over.
- “We estimate that the number of chartered financial analyst (CFA) charterholders per public company increased from roughly 1 in 1976 to 27 in 2019.“
- Source.
Nintendo
- A really insightful and bearish essay on Nintendo.
- “However, the “Nintendo is Disney” thesis is deeply flawed. It feels more like a desire to apply a pattern than to find a real analogue. Elements of Nintendo certainly represent Disney, but they represent Disney insofar as both companies are best in class creators of four-quadrant, multi-generational content. Otherwise the businesses are fundamentally different, their management styles fundamentally different, and their approaches to content itself are fundamentally different, too.”
Dotdash Pt II
- Snippet has previously written about DotDash, owned by IAC.
- The business is annualising $180m of revenue, made 24% EBITDA margins last year and continues to grow double digits.
- Part of the strategy is to grow the portfolio – organically and inorganically – and this is a nice table capturing it so far.
Tik Tok
- TikTok is a phenomenon.
- Their rise had a lot to do with a huge advertising campaign in the US
- This stat is staggering – for a period in 2018 “nearly 22% of all ads seen by U.S. Apple device users on Facebook ad network came from TikTok and its Chinese counterpart Douyin”
- As the article points out this actually provides more evidence of Facebooks dominance.
Uber
- A fascinating piece tearing apart Uber’s business model.
Equity Home Bias
- For Pensions – “There is a clear sign of a reduced home bias in equities, as the weight of domestic equities has fallen, on average, from 68.6% in 1999 to 39.7% in 2019.”
- Source.
Most Shorted US Stocks
- h/t themarketear.
Gambling
- Remarkable how Sky Bet has gone from 5th in 2015 to 1st today.
EU Banks
- “Some banks trade at valuations equal to (or less than) their surplus capital, implying that the banks themselves—including their interest-rate-resilient wealth management divisions, trading and operations segments, and automobile and mortgage lending businesses—are free.“
- Source.
Reed Hastings Profile
- Interesting NYT profile of the CEO of Netflix.
- On culture – “part of daily life at Netflix with a daily Circle of Feedback and annual written and live 360 Assessments, in which you meet with the team to get ripped apart.“
Equity Valuation
- When compared to fundamentals (GDP) equities look expensive but not if compared to money measures (M2). Interesting contrast.
Exchanges
Hype doesn’t pay
- Chart showing how it doesn’t pay to chase when the biggest stocks roof it.
Airbnb
- Interesting to see Airbnb bounce back like this.
- “Airbnb spending is running a whopping 75% higher than this time last year according to Edison Trends, based on a panel of spending data including more than 65,000 Airbnb transactions.“
