Markets

7

Dalio says avoid cash and bonds as autocracy rises

Investment guru Ray Dalio is all in on the Fed/ECB print orgazmo and says to borrow like no tomorrow: “This printing of money and buying of debt assets has driven interest rates so low that cash and bonds are stupid to own,” he wrote in a post on LinkedIn. “I think one should consider minimizing

40

2022 could be the year Tesla goes Teracap

Morgan Stanley with the note: Tesla reported 4Q unit deliveries roughly 15pct ahead of consensus, annualizing to over 1.2mm units BEFORE contribution from Austin and Berlin which we ultimately expect to be far larger plants than Fremont and Shanghai. 3key thoughts: It’s not just the unit beat, but the favorable economics from reducing the proportion

73

FT: Bitcoin is the greatest Ponzi scheme ever

FT has a great article from Robert McCauley, a non-resident senior fellow at Boston University’s Global Development Policy Center and associate member of the Faculty of History at the University of Oxford about how Bitcoin may end up being not just the greatest Ponzi scheme ever, but worse on a social level – an actual

4

Goldman: US yields continue to rise on faster taper

Goldman with the note: The November FOMC minutes provided little new insight into the FOMC’s tapering plans. All participants judged it appropriate to announce the start of tapering at the November meeting and “some” participants favored a faster taper, but the September minutes had already revealed that “several” participants advocated for a more rapid reduction

2

For companies, not all inflation is created equal

TS Lombard with the note: Not all inflation periods are created equal: when inflation is “demand-pull”(pro-cyclical), corporates are able to pass on PPI increases to customers. Historically, margins improve when inflation is pro-cyclical and contract when it is counter-cyclical. The current regime is pro-cyclical; we remain positive on margins and equities. Rising input costs do

7

Send your portfolio to the Moon

I had a fascinating space investment conversation (podcast) yesterday with Dr Andrew Barton, an engineer specialising in space technologies with a long career in both Australia and internationally. For me, what is incredible is the pace of cost reductions being seen in the sector. Elon Musk’s SpaceX has brought the cost of launching equipment into

22

Beware the inflation snap-back: today’s inflation isn’t 1970s (part 1 of 4)

Runaway inflation is the theme du jour. “Protect your portfolio from hyperinflation” scream headlines from investment newsletters. I have an alternative scenario for you. Current inflation is supply-chain and commodity bubble-based, temporary, and the recent price signals will actually create the opposite effect.  It is a detailed argument. So, I’m going to present the alternative

0

Quick Q1 2021 reporting season update

The Q1 2021 reporting season is in full swing in the US, Europe and Japan and profits are booming. Markets are expensive, but if the upgrades keep coming the current prices won’t look so bad… In the US, even the company at the worst 25th percentile has seen upgrades to forecasts: Disclaimer: Q1 2020 to

26

Trump takes a dump on relief as markets flump

Quelle surprise. His Royale with Cheetos has decided at the last minute to squash the long awaited yet extremely underwhelming stimulus bill from the US Congress, wanting more money in the stimulus cheques ($2000 vs the paltry “let them eat cake” $600) and removing a lot of riders and other “unnecessary” spending. From MSN: The

15

Your diversification free lunch is not “all you can eat”

Nobel prize winner Harry Markowitz gets the credit for coining the phrase that “diversification is the only free lunch in finance”. Add the insight that stock markets are at least semi-efficient, and a multi-trillion dollar exchange-traded fund (ETF) industry was born.  And indeed, many exchange-traded funds are worthwhile investments, providing low-cost diversification. But some take

8

RBA Deputy Governor Debelle lists ‘other’ policy options.

From CBA’s head of Australian economics, Gareth Aird: RBA Deputy Governor Guy Debelle listed four ‘other’ options to ease monetary policy further: (i) purchase bonds further out on the curve (supplementing the three year yield target); (ii) foreign exchange intervention; (iii) cut the current structure of interest rates in the economy without going negative; and (iv) negative rates. Purchasing

40

eSports are sexy, but expensive

The digital games and interactive media sector is probably much larger than you think and still growing. To put it into perspective, one of the highest rating movies ever, Avengers: Endgame, grossed US$858m during its opening weekend. Grand Theft Auto V’s release, earned US$1b in just over three days.  Originally just a PC/console experience, ubiquitous

25

Ray Dalio: markets are no longer free

by Chris Becker Ray Dalio, the masterful manager at Bridgewater Associates had a long and wide ranging interview on Bloomberg over the weekend, nailing how the markets are no longer free allocaters of capital, but completely propped up and fed by the Fed and other central banks. Take aside a half hour of your time

3

Fed confusion throws spanner into bond rally

By Damien Boey at Credit Suisse: Over the past few days, we have witnessed some very confusing signals from Fed officials: Vice Chair Clarida suggested that the Fed should not wait until things get so bad to have a dramatic series of rate cuts. These comments followed and potentially reinforced dovish comments from the New

39

Warnings mount over poor US earnings

  by Chris Becker Stock markets are renowned for pricing in promises but failing to deliver on accuracy. With US markets now at record highs, with the Dow Jones breaking through the 27000 point barrier last night as the S&P500 hovers at a near doubling of its GFC low, and a Federal Reserve hell bent

10

ECB smackdown on Bitcoin

by Chris Becker While Bitcoin launches back over the $13000USD level in the Asian session today, a quick reply on the currency question from the ECB Twitter account smacked down the crypto bulls: Lane: No. Bitcoin is not a currency, it rather is an asset and it is very volatile #AskECB https://t.co/XQ9Mqdm5rU — European Central

4

PBOC rejoins the easing game

by Chris Becker Following the jump in USD on the Friday night unemployment print, the PBOC has re-entered the easing game, resetting the Yuan fix to a much lower 6.8881 from Friday’s 6.8697. Offshore trading in Yuan (USDCNH) is already moving back above 6.89: This is part of Beijing’s ongoing manipulation of its currency as

9

Bitcoin bazooka to fizzle

by Chris Becker The undollar crypto currency the mainstream economists love to hate – Bitcoin – has seen a meteoric rebirth since the start of March this year, tripling in “value”: Having reached nearly $USD14000 mid way through last week, Bitcoin also showed why for most investors/speculators, its something to avoid traversing in the short term,

9

Bitcoin bubble to the dark side of the moon

by Chris Becker The Bitcoin boosters are back! HODL! Russia is still going to save the day and Bitcoin is going to $2 million! From Mickey: The economic analyst who claims Russia is about to buy more than $10 Billion worth of Bitcoin has responded to doubts about his credibility. Speaking exclusively to Micky News, Vladislav

11

Will Russia save Bitcoin?

by Chris Becker In short, not yet. The crypto lovers are going ga-ga over “news” that Russia, under “enormous pressure” by US sanctions after liquidating its very modest US Treasuries portfolio, will now diversify into Bitcoin. From ZH, where the cycle has hit the apex: According to Vladislav Ginko, an economist at the state-funded Russian