Food for Thought #24 // Links🔗

This time the most interesting content I stumbled over includes: reviews, TMUS, SESG, BBBY,

Must read: Jeremy Grantham is calling a bubble and I am afraid he is exactly right in his viewpoint waiting for the last dance – this one I read to the end! He seems very happy to be free to communicate his true opinion without considering his personal career risk – which might result in a huge and rare advatage for clients willing to listen …

  • The markets temperature in Dec 2020 seemed very hot (IMHO)
  • Long-time readers will know that I love Horad Marks’ books and that I read them both several times. Believe me or not, but I just re-read some sections, again!
    • It helps me to read his timeless insights, believing that it all happend before.
    • Contrarianism at the market or cycle extremes can add much value.
  • The hardest part with (potential) bubbles is the timing question
    • Usually investors give up and want the pain (underperformance) to stop
    • it needs discipline to stay the course

One more review: By now, you all probably read enough reviews of 2020, but here is one more to go. A review how it should be written: Performance Review 2011-2020 – Lessons learned, Outlook 2030 from value and opportunity. One point to read (several times) for novice investors: The concept of a base rate: If you look back the last x years (or months) and conclude future returns from your equity investments will be the same, then, think agian:

  • there are good (academic /theoretical) reasons to expect longer-term equity returns of
    • risk-free rate + equity-risk-premium
    • the former (for treasuries or bunds) is much lower nowadays and often negative!

Portfolio construction (technical): Ensemble Capital on the very important topic of Position Sizing: qualitative analysis and a quantitative sizing approach described in their pdf report (blog post)

Bill Miller on inflation and Bitcoin, the new digital gold or poison (4Q 2020)

Collaborative with Two Worlds: So Much Prosperity, So Much Skepticism.

adventuresincapitalism about his event-driven trades.

Chris Mayer with some useful insights about (useless) questions and his observation Art Imitates the Stock Market: for really high returns one has to hold assets for a long time even with compelling selling prices available (daily).

Swen Lorenz about junior gold miners in his newest weekly dispatch. (if you want to become a paying member to his world-class content please use my affiliate link)

Thomas Russo does not hold many US companies since the high managment compansation via employee options, which results in managers being focused on certain points in time and leads to depressed re-investments (11:18). His google talk was in 2018 before todays valuations of story stocks 😉

John Huber (Saber) observes changing company dynamics generating profits on the back of other firms’ investments and wonders if we see the End of Mean Reversion?

The Economist about very expensive 5G spectrum auctions taking place in the US (link). Incumbents are splurging, and might have to because T-Mobile (TMUS US) got useful spectrum via its Sprint acquisition. Should be a slight positive for satellite firms (SESG LX).

Marc Rubinstein from netinterest about how Dee Hock, the Father of Fintech got the creditcard flywheel spinning.

NYSE will not delist Chinese telcos following executive order (but that can be changed a few more times^^): China Mobile Ltd. (941 HK), China Telecom Corp Ltd., China Unicom Hong Kong Ltd. According to SCMP, the ADRs will cease to trade somewhere between 7th and 11th January, potentially resultung in yet more selling pressure.

  • after delisting, the Chinese telco shares will be excluded from FTSE, MSCI benchmarks
    • more (pure technical) selling ?

Company news

  • T-Mobile (TMUS US) continues to add subscribers
    • and becomes ever more profitable for its parten Deutsche Telekom (DTE GR) whic howns a big part of TMUS, and
      • could buy more using its structured itm call options for Softbank’s (9984 JP) stake
  • Nvidia’s Arm takeover from Softbank (9984 JP) is reviewed by UK’s competition and markets authority (CMA)
  • After

Best and happy investing, s4v

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