“…we still see consumer spending really strong ….the consumer continues to be strong so the caution that we see is really on the commercial side…So the consumer, despite the headlines we all get up and read every day, looks pretty good.” American Express CFO.
“…you are starting to see some places where the slowing is beginning to hit and I mentioned Germany as an example for Europe. But the channel slowness that we have seen in a few places does definitely continue… I think, as we look out, I think there’s going to be continued cloud for some time.” Honeywell CFO.
Interesting contrast between these two companies, suggesting consumers are doing well while there is clearly slowing in the industrial economy.
Turns out Iger considered buying Twitter but decided against it.
“The troubles were greater than I wanted to take on, greater than I thought it was responsible for us to take on. There were Disney brand issues, the whole impact of technology on society. The nastiness is extraordinary.”
Full Interview in the NYT coinciding with the release of his memoire.
They have a big store of the latest investment letters from all the hedge funds.
Naturally stay tuned for interesting snippets as we trawl through these.
However, if you can’t wait we thought we would share it for our readers to dig themselves.
Common sense disclaimer. Just because a big hedge fund is buying a stock doesn’t mean you should. One never knows what offsetting hedges or positions they hold. Be smart, do your own work, use common sense and invest responsibly.
Something to think about in relation to investing. Original ideas.
“Coming up with a genuinely original idea is a rare skill, much harder than judging ideas is. Somebody who comes up with one good original idea (plus ninety-nine really stupid cringeworthy takes) is a better use of your reading time than somebody who reliably never gets anything too wrong, but never says anything you find new or surprising.”
A long but fascinating read about the interplay of technology and oil.
Exemplified by the Kern River oil field story – how technology renders even the best estimates wildly wrong.
“From the beginning, it was evident that the Kern River field was rich with oil, millions upon millions of barrels. Wildcatters poured into the area, throwing up derricks, boring wells, and pulling out what they could. In 1949, after 50 years of drilling, analysts estimated that just 47 million barrels remained in reserves—a rounding error in the oil business. Kern River, it seemed, was nearly played out. Instead, oil companies removed 945 million barrels in the next 40 years. In 1989, analysts again estimated Kern reserves: 697 million barrels. By 2009, Kern had produced more than 1.3 billion additional barrels, and reserves were estimated to be almost 600 million barrels.“
It tries to explain a conundrum – why the UK, almost uniquely among developed countries, does not fit the pattern that larger cities are more productive.
“Elliott made the investment in AT&T – among its largest ever – because it exhibits a unique combination of historical underperformance, a depressed valuation, well-positioned assets and a clear path forward to generate extraordinary value for shareholders and other stakeholders.”
Malcom Gladwell gives a new perspective on history – especially how things have come to be the way they are and why more efficient approaches have been left by the wayside.
Even though the subject matter isn’t finance, ranging from country music to basketball, these stories are valuable …
In investing a sense of scepticism and perspective are paramount.
Lots of journalists have now poured over the S-1 of WeWork.
In the meantime investors have continued to push down the valuation of the upcoming IPO.
Reuters latest suggests just $10bn down from $47bn (when Softbank invested).
Of the gems discovered in the S-1 (h/t FT, FTAlphaville), such as the fact that related party transactions are rife, the founder’s shares carry 20x the votes and his wife would have been involved in the succession planning, one particularly stood out:
FT pointed out that the company paid $5.9m in stock to founder Adam Neumann in return for using the “we” trademark!
(This has since been returned according to the updated filing today).
A very well researched article from the Guardian on Aldi in the UK.
Aldi and Lidl competition, along with a dose of hubris, over-spacing, and using back margin (profits from suppliers) was the downfall of the UK domestic supermarket share prices.
They have since learned and adapted. Every crisis is an opportunity.
In the last two years the US has started on a path to legalising online gambling.
As is usual in the stock market there was initial euphoria, talk of a $300bn market, and bidding up of European gambling shares.
The reality of course is more nuanced – yes the opportunity is big but there are substantial hurdles to overcome and strong competition from well funded US Casinos and Media companies.
There is a good recent Freakonomics episode on US sports gambling.
With European gambling company shares since languishing (partly due to other reasons like increased regulation in the UK) and US legalisation progressing – perhaps it is time to take another look?
Hype cycles do eventually come good. A classic chart.
