Stocks

Hedge Fund Closure

  • Interesting article about Michael Platt.
  • After shutting BlueCrest he continued to trade his own money.
  • Last year they returned 53% net after costs.
  • Interesting to see a pattern – successful hedge fund gets too big, loses focus and closes down after bad returns.
  • Manager reverts to running own money and focus on one strategy – starts to perform strongly again.
Macroeconomics

UK

  • Fund flows look to have bottomed.
  • Not everyone is positive.
  • “The U.K. remains – the cork is still in the bottle. It didn’t go off last Friday [Election day]. Money is still sitting on the sidelines. I think it may start to come, but I don’t think we’d be calling that as like the last Friday doesn’t – is only the beginning, not the end. And there are other challenges in the U.K. market, so the U.K. is probably the area across the industry which is the most difficult at the moment.” JanusHenderson CFO
Macroeconomics

London House Prices

  • Rightmove report out for February on UK and London house prices.
  • “London’s recovery continues with new-year momentum pushing up prices and sales numbers, and finally encouraging more sellers to come to market … Better market encourages new sellers, with the 1.6% increase in the number of newly marketed properties being the first rise compared to the prior year for 16 months.”
Stocks

Franchises in the US

  • A great article full of tons of information on franchises.
  • This chart shows the fee for opening a franchise.
  • Notice how stand out Chick-fil-A is. This is because they pay for all the opening costs.
  • In return Chick-fil-A charges 15% royalty (vs. typical 4%-8%) and takes 50% of net profit.
  • Arguably this is a different model.
Macroeconomics

Bond ETF

  • We have previously written about the risks building form the rising popularity of bond ETFs.
  • This article argues the opposite – more ETFs = more trading in bonds = liquidity.
  • We take issue with these arguments. An inspection of two bond etf prices shows you that they have mostly marched upwards (e.g. LQD, VCIT).
  • As ETFs go up they create more units and are willing buyers in bond markets. This of course creates liquidity.
  • The main issue will be on the downside – if something goes wrong, ETFs, en masse as they follow pre-set rules, will sell and there won’t be anyone on the other side.
Snippet Recommends Tools

The Browser

  • As an investor one needs to read broadly.
  • One of the best resources out there is The Browser.
  • They curate all the interesting articles on the internet on a huge range of topics and send it in a daily email.
  • They would know – their editor reads 1,000 per day!
  • It isn’t free but the best money you will spend.
  • Use Pocket to save them to read later.
Stocks

Disney

  • This is a chart of the top app downloads in US. Check out Disney.
  • “The launch of Disney+ in mid-November was unprecedented in the U.S. Its 31 million downloads in Q4 2019 was more than double the total for the next closest app, TikTok.” 
  • It was still top despite launching Nov 12 – some way into the quarter.
  • Source: Sensor Tower (lots of good app stats inside report).
  • h/t The Big Picture.

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