Stocks

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

Stocks

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 …
Stocks

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.
Stocks

Biotech

  • Biotech investors take note – Eli Lilly are out for deals.
  • “Eli Lilly and Co aims to announce roughly one $1 billion to $5 billion deal every quarter in 2020, its chief financial officer told Reuters, as the U.S. drugmaker looks to build up its pipeline of future products.“
  • “It will focus largely on earlier stage opportunities across key therapeutic areas including oncology, pain, immunology, and neurology“
Stocks

Drug Pricing

  • Pharma companies are starting to really come into their own with introducing innovative ways of pricing.
  • Alnylam only charges the $575k price for givosiran if the effect seen is on par with clinical trials.
  • Novartis now collects the $2.1m price tag for Zolgensma over 5 years.
  • Sanofi are offering $99/month subscriptions for insulin.
  • Pricing is a big issue for US Pharmaceuticals. There are start-ups looking at this issue as well – Generics 2.0.
Stocks

Stock Market Bulls

  • A few hedge fund managers, worth listening to, continue to be bullish.
  • David Tepper is one. “I love riding a horse that’s running” and continue to do so to a point”
  • Stanley Druckenmiller is another:
  • “I revealed a very bullish posture intermediate-term since October when Powell guaranteed he would not rescind the insurance [rate] cuts unless inflation was persistently above target,” Druckenmiller recalled. “Since then, both have worked out, and the Fed is still whining about inflation being below target.”
  • Trump “election prospects have increased with two trade agreements and big win in Iran, which the Democrats have responded poorly to,” Druckenmiller added. “So I am still ‘riding the horse’ and bullish immediate term,”
  • Disclaimer: Make sure you do your own work and use common sense when investing!
Stocks

Dotdash

  • Dotdash, a business created by IAC from the remnants of About.com, is a very interesting business you probably haven’t heard about.
  • It reaches 100m monthly users, is profitable ($40m of EBITDA) and growing.
  • It is also unique event in digital media – a turnaround.
  • “Our job is to make great content that loads quickly with relevant non-intrusive advertising,” he insists. “If we execute, the search results will be fine.” His critics call this naive, but Vogel is trying to build a billion-dollar publishing business, not a search colossus. He’s betting that Google will drive traffic to the best content.
Stocks

Fintechs Threat to Banks

  • Interesting chart from Alphaville.
  • This is analysis from the behaviour of 688,000 mobile banking users for 3 months of 2019.
  • The x-axis shows the proportion of people who use each of the major banking apps at least once a month.
  • The y-axis shows the proportion of those people that use that banking app exclusively.
  • It suggests that high street banks not only have the highest share of mobile app usage, but also a far more loyal base of users.
  • Lots of further interesting stats inside the article.
Stocks

Value Factor

  • Interesting piece by Cliff Asness of AQR on the value factor.
  • Valuation of value stocks (the cheapest ones) are near historic levels against the most expensive stocks on several measures – suggesting now might be a good time to invest in this factor.
  • This chart shows the price to book ratio of the expensive 30% of stocks divided by this ratio for the cheapest 30%, adjusted for industry.
  • The spread is now in 97th %ile of the ex-tech bubble range.
Stocks

Start-ups & Principal Risk

  • Venture backed businesses are increasingly pivoting towards taking more principal risk and moving away from acting as brokers.
  • Latest example is Leavy, an Airbnb copy-cat, who are guaranteeing payments for your apartment holiday rental upfront.
  • The real estate sector has seen this already – with companies offering to buy your home directly.
  • As is discussed here this type of model leads to better margins in good times, but is a lot riskier.
  • It feels like late cycle behaviour.
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