As GMO points out – clean energy has gone through a classic hype cycle.
All the relative outperformance blow out has come off.
Yet, change could be afoot – especially as firms focus on profitability – as described in this excellent analysis from AlphaSense (need to sign up).
Government policy is helping – here is what GE said about the big incentives offered by the Inflation Reduction Act (IRA).
“I know the IRA has created an eight year incentive, an incentive through 2030. That was enough of a long-term incentive for a few of the manufacturers that I know of that were making big decisions on supply chain changes, onshoring things, changing from China sources. In the absence of IRA incentives they would not happen. They would be small changes.“
“In this paper, we study the relationship between stock fund managers’ facial attractiveness and fund outcomes. Utilizing the state-of-art deep learning technique to quantify facial attractiveness, we find that funds with facial unattractive managers outperform funds with attractive managers by over 2% per annum. We next show that good-looking managers attract significant higher fund flow especially if the funds are available on Fintech platforms where their photos are accessible to investors. Good-looking managers also have greater chance of promotion and tend to move to small firms. The potential explanations for their underperformance include inadequate ability, insufficient effort, overconfidence and inefficient site visits.”
It is business lore now that Gillette originated the business strategy of selling cheap razor handles to lock in customers to relatively more expensive razor blades, or so the story goes, recreated in board rooms and strategy meetings around the world today.
However, as this paper shows, Gillette never actually pursued this strategy – even when patent protection meant their handles couldn’t be used with any other blade.
Fascinating history of how we all ended up doing PowerPoint slides all the time.
The creator of PowerPoint also has a colourful story – “It’s hard now to imagine deafening applause for a PowerPoint—almost as hard as it is to imagine anyone but Bob Gaskins standing at this particular lectern, ushering in the PowerPoint age. Presentations are in his blood. His father ran an A/V company, and family vacations usually included a trip to the Eastman Kodak factory. During his graduate studies at Berkeley, he tinkered with machine translation and coded computer-generated haiku. He ran away to Silicon Valley to find his fortune before he could finalize his triple PhDs in English, linguistics, and computer science, but he brought with him a deep appreciation for the humanities, staffing his team with like-minded polyglots, including a disproportionately large number of women in technical roles. Because Gaskins ensured that his offices—the only Microsoft division, at the time, in Silicon Valley—housed a museum-worthy art collection, PowerPoint’s architects spent their days among works by Frank Stella, Richard Diebenkorn, and Robert Motherwell.”
“Recently, the IRS has accelerated payouts from a pandemic-era tax benefit known as the Employee Retention Credit (ERC). We estimate over $220 billion has been disbursed so far ($130 billion this fiscal year) and data on outstanding claims suggests there’s at least another $120 billion yet to be distributed. The use (and in some cases abuse) of this benefit should provide a meaningful tailwind for small business balance sheets and consumption through the end of the year and into 2024.“
More and more anecdotal evidence suggests that GLP-1 agonists (like semaglutide, the active ingredient in popular weight loss drugs Wegovy and Ozempic (off label)) could dampen cravings for alcohol.
A survey of individuals taking these drugs by Morgan Stanley has confirmed this phenomenon.
Up to six clinical trials are testing semaglutide in alcohol use disorder – which could provide conclusive proof.
Investors are generally trying to determine the implications of the weight-loss revolution. As this chart shows the number of expert calls done by investors on AlphaSense on the topic has risen rapidly.
Alpha Sense also has a handy guide to the Obesity space here (need to sign up).
It is a bit technical but left me with a feeling that though LLMs are a big breakthrough, they have big limitations.
Models beyond the autoregressive LLM that start to mimic some of the planning and reasoning required to rival human intelligence are a lot more complicated with not-so-neat solutions.
A very handy tool that tracks strikes in China – both statistics and as a map.
Latest monthly numbers have seen a spike.
“Worker strikes have reached a new height after the pandemic,” Aidan Chau, a researcher at CLB, told Nikkei Asia. “Many protests are related to slowing demand in international trade.” (Nikkei Asia).
The rise of the AfD (the right-wing populist party) in German polls has been remarkable.
With elections looming in October 2025, this political risk will soon be on investor’s horizons.
In this context, this interview with Wolfgang Munchau, former co-editor of FT Deutschland, is a must-read to understand the woes of Europe’s largest economy and how these reflect in politics.
Interestingly he highlights another possible surprise on the left political spectrum – “there may soon be a party on the Left led by Sahra Wagenknecht, a very sort of maverick politician, who has left or who is on the verge of leaving the Left Party, who may be forming a new party of the Left. And that party was also on opinion polls at potentially 20% of the electorate.”
