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GPU, or graphics cards, have been very hard to get in the past two years. Largely because of their use to mine crypto currencies. Yet the deflating market has found its way here as well, with prices now sliding .
OECD countries by five gauges of property market risk. Source .
Defensive stocks have strongly outperformed cyclicals this year. Partly this is driven by extreme flows . Chart is from the excellent Weekly Chart Storm by Callum Thomas, absolutely recommend subscribing.
People use words to describe probabilities all the time. Yet this leads to a huge amount of confusion, especially in financial press. In this great article , Mauboussin (two of them) lay out learnings from a survey they did on this topic. Take this chart – the term “real possibility” was taken to mean anything from 20%-80% by 1,700 people surveyed – a huge range. Lots of interesting ideas inside on how to “combat” this bias.
The leading actors in movies are getting older. Source .
The correlation among S&P 500 stocks has been rising in 2022, towards extreme levels.
Useful chart showing the P/E ratio at bear market bottoms for the S&P 500.
China has lost almost all of its wage advantage vs. the US. Source .
Energy vs. Tech looks extended, both in terms of price performance and earnings revisions. Chart from JPM Quant team via themarketear.com .
Another in a series of charts showing a reversal of pandemic trends. This one shows that the demand for vacation homes in the US is back below pre-pandemic levels. NB the chart uses mortgage-rate lock data (which requires disclosure of purposes of home purchase). Source .
A new paper examines the question of why CEO’s allocate precious time to appearing on podcasts. Between 2016 – 2020 over a quarter of all S&P 1500 CEOs appeared on at least one podcast. This has grown from 6% in 2016 to 22% in 2020. They find it tends to be CEO’s of firms more focussed on consumers and ESG. It also tends to be CEOs who have strong reputation incentives (looking for a new job, have own twitter account, founders).
Interesting article arguing that state capacity is the real constraint for delivering infrastructure projects, not interest rates. “The new tunnels for New York’s East Side Access project cost about $4 billion per kilometer , while Paris built a similar project (infill development, went under the Seine, had problems with catacombs) for $230 million per kilometer . Copenhagen, Barcelona, Naples, and Milan were all cheaper still, while South Korea was generally the cheapest , with a tunneling cost around $100 million per kilometer , or perhaps less. That’s quite a difference in state capacity. It’s not just tunnelling – NYC spent $39m per station to add elevators, Boston $25m while in Berlin it cost just $2.6m.
Interesting chart via The Browser (a must subscribe) plotting each issue of the New York Review of Books (NYRB) by the gender mix of authors. “What you are seeing is that there are only twelve issues out of 1228 (1%) to which women have contributed half or more of the articles. Nine of them have appeared within the past three years. Meanwhile there are about 196 issues (16%) to which not a single woman contributed an article. ” Source (more stats inside).
There has been a profound change in the relationship between women’s labour force participation and fertility in the OECD. It has reversed. “Today, countries where more women work, more babies are born. ” Source (h/t ).
ESG ratings from various providers just don’t agree and this is a nice chart to demonstrate this point. The horizontal axis takes Sustainalytics ratings for 924 firms as a benchmark. Ratings by other providers are then plotted on the vertical axis using different colours (see key). For each rater the ratings are normalised to a Z score (zero mean, unit variance). The results = for any level of benchmark rating there is a big range of values given by other ratings. The divergence is so bad between firms “it is difficult to tell a [ESG] leader from an average performer”. The paper then goes on to try to understand why this is.
This is a useful collection of thinking tools and models – presented in a well designed way. Several of these are useful to investors – for example the second order thinking advocated by Howard Marks.
Bain report on private equity industry is always worth a flick. This was an interesting chart on valuations – showing that multiples started to drift up from 2015 onwards reaching highs last year. Part of this was a mix shift towards growth and technology, where 2020/2021 saw ballooning multiples paid for software businesses (here , page 49).
HY issuance has collapsed to levels seen in historic crises. Source: themarketear.com
Amazing rise in the % of pre-clinical biotechs IPOing. Source .
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