- Interesting article about Michael Platt.
- After shutting BlueCrest he continued to trade his own money.
- Last year they returned 53% net after costs.
- Interesting to see a pattern – successful hedge fund gets too big, loses focus and closes down after bad returns.
- Manager reverts to running own money and focus on one strategy – starts to perform strongly again.
Stocks
Interesting, and often contrarian, Snippets on individual companies and the stock market.
Franchises in the US
- A great article full of tons of information on franchises.
- This chart shows the fee for opening a franchise.
- Notice how stand out Chick-fil-A is. This is because they pay for all the opening costs.
- In return Chick-fil-A charges 15% royalty (vs. typical 4%-8%) and takes 50% of net profit.
- Arguably this is a different model.
Dividend Yields
- This chart shows that currently 60% of the S&P 500 has a dividend yield greater than the 10-year US Treasury yield.
- This is the highest level since 1992, and since zero interest rate policy/quantitative easing was introduced.
CEO Compensation
- An amazing chart showing what has happened to CEO pay as a multiple of the average worker.
Timing
Stock Markets and Epidemics
- SPX historic chart with all epidemics marked.
Disney
- This is a chart of the top app downloads in US. Check out Disney.
- “The launch of Disney+ in mid-November was unprecedented in the U.S. Its 31 million downloads in Q4 2019 was more than double the total for the next closest app, TikTok.”
- It was still top despite launching Nov 12 – some way into the quarter.
- Source: Sensor Tower (lots of good app stats inside report).
- h/t The Big Picture.
Valuation of Top 5
- Yesterday we showed how the concentration of the top five stocks in the S&P 500 index is back to highs.
- This chart looks at the valuation of the top five today compared to March 2000 (the last record).
- Suggests that the multiples are a lot more acceptable.
Index Concentration
- The top 5 stocks of the S&P 500 make up a record 17.3% of the index.
Spotify
- Great article on Spotify.
- “The rise of AirPods, smart speakers, and other wearable devices may not signal the onset of a true platform shift, but it undoubtedly represents a transformational evolution in the way we will consume media — and this emerging paradigm of distributed, “eyes up” device interaction directly benefits audio more than other content categories.“
- Nice table comparing the music services as well.
Artificial Intelligence (cont)
- This chart shows number of times AI is mentioned on an earnings call for US companies.
- Financial companies are leading the charge.
- Source.
- Table showing Google’s pre-IPO financials h/t themarketear.
- Today Alphabet has a $155bn top line and $36bn of profit.
Airlines
- For those wondering what the impact on airlines is of viral epidemics.
- This is the impact on North American and Asian Airlines of SARS.
- RPK is Revenue Passenger Kilometers.
- Together some $7bn of revenue was lost.
Defensive vs. Cyclical
- This is a chart of defensive sectors (think e.g. utilities) vs. cyclical sectors (think industrials).
- Interesting to see how for the majority of the recovery defensive sectors actually outperformed. This stopped only after 2016.
- The most recent rally has been mostly led by defensives as well.
Artificial Intelligence (cont)
- The level of investment going into AI is ballooning.
- The chart only covers private investment.
- Source.
Tech Performance
- Tech is starting to decouple from earnings.
- This chart shows that the relative share price performance of tech is outpacing the relative EPS performance.
Artificial Intelligence
- Fantastic resource for anyone interested in AI.
- Especially worth checking out AI Index which has an absolute treasure trove of data (and makes it available via Google drive) on all aspects of AI.
- The improvement in capabilities (see analysis and charts in the report) are exponential.
- AI really has exploded on the scene – the chart shows attendance at big AI conferences. Notice the cyclicality though …
Executive Compensation
- Interesting chart showing, over time, what metrics are used for executive compensation – both long term (LTIP) and short term (STIP).
- You can see clearly the rise of TSR (Total Shareholder Return) but also how ESG is starting to be used for short term compensation.
- Data from Goldman Sachs.
Private Equity
- Prevalence of very leveraged private equity deals (those >6 or >7x leverage) are back to pre-crisis levels.
- Multiples paid are also near highs around 11x EV/EBITDA
- Good report from Bain on the state of PE with the latest data.
Electric Cars
- Interesting piece from FTAlphaville on the carbon impact of electric vehicles.
- First a staggering chart from VW – because battery production is so energy intensive it takes their new e-Golf 120,000 km of driving to breakeven in terms of carbon emissions vs. a diesel Golf.
- This does depend on where the electricity used to charge comes from (VW address this) and ignores other gas emissions.
- Some analysts suggest that because battery technology is yet to improve the best impact on CO2 emissions is to drive a hybrid.
- Food for thought.
