- Positioning, especially among discretionary investors, is down sharply.
Stocks
Interesting, and often contrarian, Snippets on individual companies and the stock market.
Video Streaming Penetration
- Data for the UK suggests we have hit saturation point.
- “The growth of SVoD household penetration slowed in 2022, and this continued into early 2023 as the rising cost of living, combined with SVoD service price rises, put greater strain on household budgets.“
- Source.
Unprofitable Firms
- The staggering rise over the decades in the proportion of firms that are unprofitable.
ESG Bear Market
- Perhaps it is more of a correction in a bull market?
- Chart showing the number of companies mentioning ESG on earnings calls – lowest number since Q2 2020 levels.
- The drop in peak has been seen in all sectors.
- Part of what is driving this is a record 165 pieces of anti-ESG legislation in the US.
- Source.
AI Semis
- Three excellent questions about the future of semiconductors and AI.
- “First, is AI additive to the semis market? Will purchases of AI chips increase overall demand for semis, or will they merely replace purchases of other chips?
- How will the market for AI Inference semis play out? How big will it be and who will win share?
- Can Nvidia be displaced from the market dominance it currently enjoys?“
- Some view on answers here.
Superfans
- “Averaged across all artist sizes, super listeners make up 2% of an artist’s monthly listeners, but account for over 18% of monthly streams.“
- However, as seen in this chart, this varies widely when compared by artist popularity (measured by number of fans).
- Source: Spotify Fan Study.
Cloud Bottom
- Has cloud growth bottomed?
- After falling for seven quarters – these growth rates have stabilized.
Dividend Payouts
- Interestingly dividend payout ratios have not recovered post covid.
- Source.
Cyclicals vs Defensives and PMI
- PMI has been falling for well over a year now.
- In the first stage, this took down cyclical stocks (measured by the GS cyclical/defensive ratio).
- However, the latter has recently bounced and is near a 12m relative high.
- This is an interesting setup.
- Source: Redburn.
SEO
- Google’s search robots shape and dominate everything online.
- AI is now making it easier to hit everything required to lure these algorithms but at a cost.
FTSE 250 vs. FTSE 100
- FTSE 250 is seen as a gauge of domestic UK stocks while the FTSE 100 is full of international exposure (e.g. oil, mining etc).
- The relative looks like it is bouncing off the Brexit lows.
- Source: Redburn.
Trading Below Book
- U.K. is not far behind Japan in the percentage of companies trading below book value.
- Will the London Stock Exchange be writing letters soon?
Podcast Business and Spotify
- Podcast advertising leads to pretty good returns for brands.
- “After conducting a study with 250 advertisers and marketers, it says two-thirds (67%) of podcast ad buyers say that every $1 spent on podcasts returns between $4 and $6 for their brands.“
- Yet SPOT is struggling to capture this – why?
- This blog post covers a lot of reasons. For example:
- “[What’s] most misunderstood about Spotify is Spotify doesn’t get to monetize all the podcast content that they have. So in the most recent quarterly earnings report, they say that they had 5 million podcasts on their platform, but 99.9% of those podcasts, Spotify does not get to monetize.“
Mining Capex and Energy Transition
- Mining companies across metals aren’t spending nearly enough to get us where we need to go on the energy transition.
- Source.
Chinese Boycott Foreign Brands
- Since the reopening earlier this year the willingness of Chinese consumers, according to this survey, to boycott foreign brands has risen.
- Source.
The Capex Shift
- A remarkable change in who the giants of capex spending are.
Tesla Production System
- “Engineers at Tesla Inc. have developed a new process that they claim will reduce EV production costs by 50 percent, while reducing factory space by 40 percent.“
- The so-called “unboxed” system – “focuses on eliminating linear assembly lines and producing more subassemblies out of large castings“.
- That is a remarkable goal, and huge if achieved.
Stock Return Dispersion
- Looks like a step change – should be positive for active management.
- Source: Blackrock.
Concentration Risks
- This chart “shows the average annualized outperformance of stocks after they’ve become one of the largest top 10 in the S&P 500.”
- “As you can see, the top 10 largest companies underperform by an average of -1.5% over the subsequent 10 years.”
- Source.
