Snippet Finance - Part 76

24th Jun '20

CIO Survey Part 1

Results of a survey by JPM of 130 chief investment officers (CIOs) commanding $88bn of annual IT spend.
This chart shows how CIOs’ foresee categories of IT spend will be affected due to Covid-19 pandemic.

23rd Jun '20

Wikipedia and Zero Clicks

We previously discussed the rise of zero click searches at Google.
This is an article about the direct impact of this on Wikipedia.
“Over the past 24 months Wikipedia has lost billions of organic monthly visitors”

23rd Jun '20

Las Vegas Revenue Mix

Gambling is a much smaller part today than it was in the 1970s.

22nd Jun '20

Marc Andreessen Interview

Brilliant interview with Marc Andreessen.
Full of insights on a multitude of topics.
On investing he says – “It’s really, really, really hard to be a good poker player. And if you’re kicking yourself every time you have a bad hand, the bad habits just simply happen. You just need to be able to have a system that lets you think through the process…“

22nd Jun '20

Working Capital & Covid

This is a chart of the working capital of Electrolux since 2003.
It shows that the total cash collection cycle has fallen from 63 days in 2003 (a peak of 87) to zero today.
This was almost entirely achieved by payable days doubling from 60 to 120.
In short the company is squeezing suppliers.
What happens after Covid? This excellent blog post addresses this and other impacts.

19th Jun '20

Doing Business in Japan

If you have ever invested in Japanese stocks it can feel like learning all over again.
This is a really great article written by a westerner fluent in Japanese who has spent his whole professional career in Japan including starting a business.

18th Jun '20

Football Clubs

Interesting report from KPMG on valuation of football clubs.
There are actually several listed football clubs – Manchester United, AS Roma, Juventus, Borussia Dortmund, Celtic, Lazio to name a few.
Attached is an interesting table showing operating revenue evolution as well as how the revenue split between matchday, broadcasting and commercial has evolved.

18th Jun '20

Zombie companies

Low rates have spawned a growing army of zombie companies.
This chart from DB shows companies where debt service payments exceed profits. These now make up nearly 20% of firms.

17th Jun '20

Netflix Accounting

A good article on accounting at Netflix.
In short, it analyses content amortisation accounting and shows that this line item is being understated, boosting earnings.
A staggering stat is that Netflix content spend went from $2bn in 2011 to nearly $14bn last year.
This might not be relevant for the share price for now but is still worth knowing about.

17th Jun '20

Asset Management Fees

This is an interesting chart showing two decades of falling fees in the US investment management industry.
Fees have fallen across the board, particularly for passive funds.
More data in the Morningstar piece.

16th Jun '20

Option Volume by Expiry

Fascinating chart showing that options volume is being concentrated – at nearly 20% – in options with 24 hour expiry.

16th Jun '20

Ad pricing

Always worth keeping an eye on digital ad prices.
This chart from IAB shows the impact across various online channels.
CPMs have been hit by -16%.
Interesting to see the range – open web display being hit the hardest while video, podcast and search are more resilient.

15th Jun '20

Foursquare Recovery Index

Forsquare (covered here before) continues to be a great source of data to track the recovery.
Recently this has been put together into a handy Recovery Index.
The methodology and premise are described here.

15th Jun '20

Banking 2.0

On average a banking relationship in the UK lasts 17 years, longer than most actual relationships.
This is a great chart comparing how long it takes in days and clicks to open a new account – challenger banks like Revolut win hands down.

12th Jun '20

EU Recovery Fund by Country

Allocation of the EU €750bn recovery fund by country as a % of GDP.
Source.

11th Jun '20

Millennials

Fascinating article on how millennials have suffered economically.
“Chart depicts inflation adjusted GDP growth per person for each generations first 15 years in the work force (from age 18) averaged across birth year for each generation“.
h/t The Big Picture.

11th Jun '20

Sewage Covid Concentrations

This is an interesting paper.
It shows that sewage SARS-COVID-2 RNA concentrations lead new cases by seven days and hospital admissions by three days.
h/t Redburn.

10th Jun '20

George Soros

An old but fantastic article on George Soros.
Interesting lessons here on buying into bubbles, reflexivity (that markets can influence the events they anticipate), instinct (the famous back pain he gets) and mistakes.
“He once asked Byron Wien, an investment strategist and friend, why he went to work every day. Why not work on the days when it makes sense to do so, he asked, when there is something special to be done?
Wien replied: “George, one of the differences between you and me is you know when those days are and I don’t.”

10th Jun '20

Gundlach Latest Slides

Always worth a flick through the latest presentation – titled Superman – from Jeffery Gundlach.
This is an interesting slide showing that twin deficits (current account and budget) lead the US Dollar exchange rate by 2 years – suggesting downward pressure on the latter.

10th Jun '20

Alternative Data

A must read article on the rise of alternative data in the investment management industry from the Man Group Institute.
This chart shows how the supply of this data has exploded.
Demand has also followed.
The article contains plenty of warnings and things to be mindful of including – methodology, data quality, historic length, data lag, various biases, scope, governance and crowding.

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