Stocks

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

Stocks

Travel Green Shoots?

  • “I am pleased to say, but I would not get overly excited about it, that we have seen nice growth coming into May. And essentially, what we have seen is both growing out green shoots in the areas you would expect, places where movement has become possible, where people can now start to think about their summer holidays, et cetera. We see that very quickly when that happens and cancellations have settled down. They are still at elevated levels, but they have stabilized.” Expedia Q1 2020.
  • “what we are seeing clearly is what you have been hearing that local, regional, domestic is certainly coming back stronger sooner.” Expedia Q1 2020.
  • “we are seeing a significant number of hits in searches over the weekend, particularly I think from families looking at going on the two weeks summer holiday from Northern Europe to places in Italy, Spain, Portugal, et cetera.” Ryanair Q4 2020 Results.
Stocks

Sony

  • Really great article on Sony and their current CEO – Kenichiro Yoshida.
  • This was a nice quote about the CEO – Yoshida’s humility is expressed through curiosity. “He came to me and said, ‘Let’s talk about medical things,’ and we met for dinner,” said Toru Katsumoto, who heads Sony’s medical business and research and development, of their first meeting. “I spoke about medical imaging and tried to explain the technology as simply as possible, but he had read a lot before we met. I was surprised and impressed. Once or twice a month, we have a face-to-face meeting and we exchange ideas freely.”
  • The big thing about Sony today is the analogy with Microsoft – “A lot of what Nadella did was capitulate and say, ‘This is where we are now and this is what we are going to do,’ rather than chasing the glories of the past.”
Stocks

Behind the Scenes

  • In investing one mostly hears from the CEO, CFO, and investor relations. It is important to dig deeper.
  • One vital function is the Chief Technology Office (CTO).
  • Here for example is an excellent post from the outgoing CTO of New York Times.
  • The legal department is also interesting. Here is a fascinating podcast featuring the general counsel of Netflix.
  • Incidentally also the first lawyer hired by the company when they were still sending DVDs and who now heads up a team of 650 people.
Stocks

Value Investing

  • Interesting chart that suggests that the underperformance of value investing since 2006 is down to valuation.
  • The reason is that the valuation metric to look at is free cash flow yield to enterprise yield and not P/B or P/E.
  • On this metric the Russel Value Index has been expensive since 2007.
  • This is partly because in 1985 68% of the market value of the S&P 500 was tangible assets, today that number is 16%.
Stocks

Retail Trading

  • A record number of people have started investing/trading financial markets.
  • TD Ameritrade saw a record 608,000 new funded accounts in Q1, E-trade saw 363,000 and Charles Schwab 609,000.
  • There is some speculation this is due to a lack of other outlets to gamble, and these traders are gravitating to more volatile stocks.
  • It isn’t just the US – Japan saw 250,000 new investors join the market (source).
  • Technology and cost are often seen as a key impediment to speculation as described really nicely here.
  • This is captured in the pictured chart which shows what happened to the number of trades when commissions were cut to zero.
  • This is a good tool to track this influx of new investors.
Stocks

Apple and Intel

  • It has long been rumoured that Apple is going to boot Intel out of the next generation of Mac computers.
  • These rumours are now suggesting this will be next year.
  • In 2006 Apple sold 5.5m Macs against 226m PCs.
  • In 2019 Apple sold 275m iOS devices of which 20m are Macs against a 250m PC market.
  • Apple, and ARM, on which its CPU designs are based, has scale now.
Stocks

Google Shopping

  • This is a really interesting post.
  • It is from Stratechary – a must read for anyone interested in tech.
  • Google is now making Google Shopping free.
  • This is a move aimed squarely at Amazon.
  • A survey in 2019 of nearly 5000 people showed that 49% of product searches start on Amazon. For Prime members who are frequent users this figure is closer to 80%.
  • Google is notching up the competition.
  • Shopify, which Ben points out is a key member of this anti-amazon alliance, is also launching an app of their own to showcase the nearly 1m merchants using the platform.

Stocks

Online dating during lockdown

  • Interesting chart from Match Group, the online dating powerhouse.
  • It shows change in daily average messages sent across their dating platforms (left hand side) and Tinder swipes (right hand side).
  • You can see after an initial dip there was a spike during the lockdown, especially among those under 30 and female.
Stocks

Valuation Chart

  • Interesting chart from SG via Einhorn’s Q1 Letter.
  • It shows the median forward P/E ratio of MSCI World Stocks split into two groups.
  • The first (dotted line) are stocks with the highest positive correlation to bonds. These trade on 24x.
  • The second (green line) are stocks with the highest negative correlation to bonds. These trade at 10x.
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